New Zealand's Transpower plans to upgrade the North-South Islands Power Link with $653 million.

Transpower announced on Tuesday that it has applied to the New Zealand Commerce Commission to approve its NZ$1.1bn (US$653,40m) plan to upgrade high voltage direct current (HVDC), the electricity link between New Zealand's North Island and South Islands.

The project consists of replacing three old submarine cables, adding a new cable to increase transfer capacity, and building new cable terminations on both sides Cook Strait.

Surveys have shown that the cables will deteriorate as expected by early 2030s and need to be replaced.

James Kilty, CEO of the company, said that by moving forward with this project Kiwis will continue to have access to the lowest-cost electricity produced across both islands.

He said that the initiative will support competition between electricity generators, and put downward pressure on energy prices.

Since 1965, the HVDC connection has been a cornerstone in New Zealand's electrical system. It ensures dependable and stable power supplies throughout the country.

The state-owned company expects that the upgraded link will have a greater impact on balancing the variable output of solar and wind farms. It will also enable the transfer of electricity generated by hydrostations, thermal backup plants, and batteries to local communities and businesses.

The Commerce Commission will review the proposal that involves stakeholders like major industrial users of electricity, local line companies, electric generation firms, and retailers.

Transpower also plans to apply for approval in 2026 to replace the electricity control system.

(source: Reuters)