John Harbord: Major Electricity Users' Group Chairman on Transpower proposes spending $1.4b on Cook Strait power cables

Transpower is looking to make a key investment into the Cook Strait electricity cable. 

It's consulting on a $1.4 billion upgrade to the 610 kilometre link connecting the North and South Island.

The existing cables are likely to reach their end of life in the late 2030s. 

Major Electricity Users' Group Chairman John Harbord told Ryan Bridge the link's important when hydro-lakes in the South are low in water.

He says the North Island's often moving forms of renewable electricity down to the South Island.

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Episode Transcript

Speaker 1 (00:00):
Transpower says they need to replace the electricity cable connecting
North and South. The cost one point four billion dollars.
The question how much will it cost us on our
power bills? John Harvard's Major Electricity us AS Group chairman
with me this morning, John, Good morning.

Speaker 2 (00:13):
Good morning.

Speaker 1 (00:14):
So cables went live first, went to nineteen sixty five,
replaced nineteen ninety one. End of life is twenty thirty.
So we've got to do this, don't we.

Speaker 2 (00:24):
Oh, we absolutely do. The cable that connects the North
and South Island literally just keeps the light on in
both islands, so it's absolutely essential infrastructure.

Speaker 1 (00:32):
What'll it do to prices? Change? Making the making the fix?

Speaker 2 (00:37):
Yeah, So the one point four billion dollars that Transpaer
has quoted, that will all get passed on to consumers.
So the proposal effectively is that consumers will pay one
point four billion dollars more than they're currently paying. And
in the proposal, Transpayer talks about possibly doing an additional
cable for extra sort of backup security that will be
in addition to the one point four billion.

Speaker 1 (00:57):
All right, we'll come to it back up in a second,
but let's stick with one point for for now, that
sounds like a lot of money, but it would be
spread over the life of the asset, wouldn't it, and
transmission only eight percent of our bill as it is,
Do we have any idea what the number might actually
look like?

Speaker 2 (01:12):
Not yet. It's important to note that the transper has
to put a proposal to the Commerce Commission, and the
Commerce Commission will have the final say and how much
transpayer will spend, So until that happens, we don't know
the final number.

Speaker 1 (01:26):
What to happen to manufacturers because they're obviously the big users.

Speaker 2 (01:30):
Yeah, so what typically tends to happen is a greater
proportion of the costs of these projects falls on large
industrial manufacturers, so they will pay sort of more than
a fair share of the burden. That we're not arguing
with that we need the electricity, but as we know,
many of our manufacturing companies are already struggling with very

(01:51):
high electricity prices, and that will just make this situation
even worse.

Speaker 1 (01:55):
We don't have a backup cable as is, right? Is
that done? What do other countries do.

Speaker 2 (02:02):
Well? Most other countries are much more connected with each other.
So if you think if you're in Europe. You know,
if you're France and your Germany, you've got a land border,
you just you know, you've already got pylons and the
rest of it that connect to each other. But there
are countries where they do need cables that cross the sea.
So it's not new technology. It's the best way.

Speaker 1 (02:22):
To do it, and it would be good to have
a backup, wouldn't it, just in case things go tips up.
Who benefits most from the cable? Is it the South?
You know? Do we send because I mean traditionally you
think that the South sends more to us. Is that
still true.

Speaker 2 (02:38):
On average? Yes, but it's sort of a recent historical
trend has certainly been that more electricity is flowing from
the North Island to the South Island. Particularly, think like
last year or this year, which are dry years in
the southern hydro lakes are low and water well. Quite
often the North Island is moving, say geo through more
electricity or other forms of renewable tricity. They are just

(03:00):
more prevalent in the North Island down to the South Island,
and you get different seasonal flows as well, So the
electricity certainly flows both ways now more than it used.

Speaker 1 (03:09):
To interesting, John, appreciate your time this morning, John Harvard,
a major Electricity Users Group chairman.

Speaker 2 (03:15):
For more from Early Edition with Ryan Bridge. Listen live
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Speaker 1 (03:19):
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