Electricity investment underway for security
Electricity investment underway for long-term security
A period of major investment in new electricity infrastructure - of a scale not seen since the 1970s - is underway to help secure New Zealand’s long-term energy future. Over $7 billion is being spent on generation and transmission in the next few years.
Figures released by the Electricity Commission, indicate that there are now more than 1,300 megawatts (MW) of new generation projects on the drawing board over the next four years, equating to roughly $3.5 - 4 billion of capital investment. This is about 15% of New Zealand’s entire generation capacity today.
Transpower Chief Executive Patrick Strange said that as hydro lake storage levels begin to recover after the long autumn drought, the electricity industry is looking towards the future and evaluating the levels of investment that need to occur in new electricity generation and transmission.
“New generation will come from a diverse range of sources, including geothermal, wind, gas and hydro. Not relying on any one fuel type adds to the strength of the New Zealand electricity system.”
“Transpower is also advancing $3.5 billion of investment in electricity transmission projects and we will be working hard to ensure that any new generation, much of which will be from renewable sources located some distance from major load centres, can reach consumers when it was needed.”
On average, New Zealand currently needs between 150 - 200 MW of new generation capacity every year to meet demand growth. With over 1,300 MW of new generation capacity over the next four years, the industry will be adding significantly to the country’s energy security margins.
Patrick Strange said that he is cautiously confident that the industry will be capable of meeting the winter North Island peaks next year, despite the unexpected shutdowns of the 300 MW generation plant at New Plymouth and half of Pole 1 of Transpower’s HVDC link late last year. “This year was a tough year for the industry and if anything, it has taught us that we have to plan for the unexpected. The level of investment in new generation and transmission reflects that the electricity industry players are responding to the critical need for secure electricity supplies going forward.”
Taking a longer term perspective shows an even greater range on new generation options. Over the next seven to 10 years, the Electricity Commission’s analysis, based on industry disclosures, shows the number of new projects being developed by generators is approximately four times the expected growth in demand over that period.