Richard Homewood: Taslink Co-Director on the potential link easing New Zealand and Australia's power issues

There's a vision Australia and New Zealand can help ease each other's seasonal electricity woes. 

Company Taslink is proposing a massive underground trans-Tasman cable, allowing surplus power to be transferred between the two countries. 

It estimates the link would increase our power grid's capacity by about 40%. 

Co-Director Richard Homewood told Mike Hosking it would have meant 20% lower power prices last winter.  

He says Australia has the opposite problem, with power outages during the hot summer days, when we have a surplus. 

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
So says we head into another winter with a mild

(00:01):
panic over power supply. What about a cable that links Australia.
It plans a green construction would take four years apparently
and be completed by twenty thirty two. Tes Link co
director Richard homewoods with us on this Richard morning to you.

Speaker 2 (00:14):
Good morning, Mike.

Speaker 1 (00:15):
Is it real?

Speaker 2 (00:16):
It's real? Mate? Absolutely?

Speaker 1 (00:18):
Okay, So you just plug it and here plug it
in there, and.

Speaker 2 (00:20):
Bob's your uncle that's slowly more involved, but you're getting
the idea.

Speaker 1 (00:25):
So what do you need? Green light wise? And who
says go for it?

Speaker 2 (00:29):
Yes? So for us, the green light we're announcing today
is that we've been doing R and D for the
last two and a half years with a team of
global HBDC experts and one of the biggest manufacturers in
the world, primarily to ensure that we can lay the
cable at the required depth and distance, and we've kind
of now reached that point that we're confident it can
go ahead. So that's a big green light we're announcing today.

Speaker 1 (00:52):
Who would own it?

Speaker 2 (00:55):
Fundamentally from an ownership perspective, our focus has always been
on making sure the cable can work its own face.
We're not going out and asking for government funding, but
we are aware of the fact that it will become
a very integral and important part of both electricity markets,
and there may be some desire for government ownership potentially
on one side or the other. But again we're not

(01:15):
going out and asking for that. We're making sure it
just stands on the zone two feet.

Speaker 1 (01:18):
And you would expect the power industry to buy into
that and make themselves available or the cable would become
available to them.

Speaker 2 (01:26):
Yeah. So the way from a power industry perspective, we've
obviously engaged substantially with AMO on the Australian side and
Transpower on the New Zealand side, and as well as
the Electricity Authority over here too, and by all accounts,
they simply will see us as a generator and also
a load and so there's nothing in terms of market
integration that's the show stopper. But of course they would

(01:48):
start to need to consider one another in their day
to day operations and really start off running as one
transasman market.

Speaker 1 (01:56):
How would any of them individually take what they had
by way of power and stick it in that cable.

Speaker 2 (02:03):
So the way the electricity market works in New Zealand
is all generators sell on to a sort of open
spot market and so regardless whether they have or a
gentilea or if they have other trading arrangements, everything in
New Zealand clears through a central market. So fundamentally, all
we're doing is buying in one market and selling another

(02:24):
or vice versa, depending on which way the electricity is flowing.

Speaker 1 (02:27):
Okay, and in that given our current situation in New Zealand,
we don't have any spare capacity, so it wouldn't be
flowing into Australia. Would a lot flow from Australia to
New Zealand, And if that was the way it happened,
is that a problem.

Speaker 2 (02:40):
So it's definitely going to be flowing both ways. We've
obviously done substantial modeling on this. There has the time
in terms from a day to day perspective, New Zealand
has a morning peak followed by Australia, followed by New
Zealand's evening peak and followed by Australia. So what we've
modeled is there will be sort of day to day
trade between the two markets between the peaks. But also

(03:01):
separately to that you mentioned earlier about the winter problem,
and you're totally right. New Zealand also has a seasonal
peak issue with winter, particularly cold mornings and evenings. On
the other hand, Australia has the opposite problem. They actually
have a hot summer day peak issue. All their adages
happen when they get those stinking hot foy degree days
and that's typically when we have surplus power. And whilst

(03:22):
you wouldn't believe it, there are periods in time where
New Zealand actually gets very low power prices, close to zero,
and so those periods do occur. But on the other hand,
Australia has a massive surplus of daytime renewables and has
a big problem with negative daytime power prices, which is
obviously an opportunity for New Zealand to benefit from.

Speaker 1 (03:44):
Wrap a word around this, is this a game changer?
Quite interesting, a moderate improvement what.

Speaker 2 (03:50):
It will be the largest single game changer to the
New Zealand market and also a very meaningful positive change
on the Australian side, less so the New Zealand but
nonetheless still very significant.

Speaker 1 (04:02):
Fantastic, Go well with it, and we'll stay in touch
with Richard Homewood who's with tes link

Speaker 2 (04:06):
For more from the mic Asking Breakfast Listen live to
News Talks it' B from six am weekdays, or follow
the podcast on iHeartRadio