8. Transmission Impacts
8.1 Introduction
Project Aqua is a relatively large-scale project. It will add significant capacity to the South Island and reinforce the typical pattern of power flow from the South Island to the North Island. This raises questions about possible ramifications of the project on transmission grid investment and transmission losses.
8.2 Transmission Investment
There are three key interest areas in establishing whether there are any likely transmission impacts from Project Aqua. These are local connections costs, regional AC network reinforcement, and the interisland HVDC transmission.
Local Connection
A range of options for connecting Aqua into the Waitaki area transmission network have been considered. The favoured options involve connecting the various Aqua stations into the existing Livingstone-Waitaki and Livingston-Islington 200KV circuits. Meridian Energy has advised that an estimate of these costs is included in the overall project cost.
AC Network Reinforcement
Connecting the Aqua stations into the existing South Island AC grid infrastructure will require a number of consequential enhancements in the network itself. These are likely to involve retensioning and replacing the conductors on existing circuits in the wider Waitaki region. We have not been able to establish whether an estimate of these costs has been included in the overall project cost, but we would assess these are likely to be small relative to the overall cost in any event.
Transpower has recently been considering options for overall grid development and has presented a Grid Development Proposal to a series of regional forums in November 2003. This indicates the likely development of a 330kV or 400kV grid "backbone" for the South Island with the first stage to be completed within the Project Aqua timeframe. If a higher voltage grid is developed in the South Island, Project Aqua is more likely to be readily accommodated within the AC network infrastructure.
HVDC Interisland Transmission
Project Aqua will increase the average level of transfer from South to North across the HVDC interisland transmission. This has implications that are potentially important for Project Aqua economics and are addressed further in the next section.
8.3 HVDC Interisland Transmission
The HVDC transmission link to the North Island is typically operated as two bi-poles as follows:
Table 10: HVDC Transmission Link Configuration| Pole | Capacity | Voltage | Comment |
| Pole 1 | 540MW | 270kV | Original mercury arc converters are operated in parallel as half-poles using Cables 5 and 6 to cope with up to 2000 amps current |
| Pole 2 | 500MW | 350kV | 700MW thyristor converts installed in 1993 are operated at reduced capacity through Cable 4 |
| Total | 1040MW | | |
The original submarine cables (1, 2 and 3) have failed, leaving the scheme reliant on the cables (4, 5 and 6) laid as part of the DC Hybrid Link Project in 1993.
The Pole 1 converters and transformers are now approaching 40 years life and reliability is expected to decline through the next five years. It is unlikely to be possible to maintain both half-poles in service through the next ten years. Transpower has therefore been investigating options for refurbishing Pole 1 within the timeframe for Project Aqua. The main options have been identified as:27
- Replacing the Pole 1 converters with 700MW thyristor converters to mirror the capacity available on Pole 2;
- Replacing Pole 1 converters as above and adding one or more new cables.
The first option would allow the HVDC transmission to operate at 700MW on Pole 1 (through two cables) and 500MW on Pole 2 (through one cable) providing an increase in total capacity to 1200MW.
The second option would allow both poles to operate at 700MW by removing the cable restriction, and providing an increase in total capacity to 1400MW.
Transpower has estimated the costs of replacing the pole 1 converters at $290m and adding an additional cable at $80m.28
The alternative investments to Aqua that we have identified represent a range of small cogeneration, hydro and geothermal projects supplemented by a wind farm and coal-fired thermal stations. Some of these developments would be South Island based, with similar transmission impacts, albeit on a smaller scale, to Aqua.
For several reasons it is therefore arguable that Project Aqua will not have a significant impact on HVDC costs and development. We prefer the view that the project does have an impact, but that impact is limited to the provision of an extra submarine cable in 2011 to increase the capacity of the refurbished transmission link from 1200MW to 1400MW. In any event, we consider it likely that additional cables would be installed by 2016 even without Aqua. Our analysis tests the sensitivity of the overall evaluation to this assumption.
8.4 Transmission Losses
South Island generation additions tend to increase HVDC transfers to the North Island as well as meet South Island load growth. These increased transfers also lead to increased flows through the North Island AC network. We have taken these increased flows into account by calculating the increase in transmission losses that would result from the increased flows. This reduces the contribution that South Island generation is able to make to meeting North Island demand and increases the contribution required from North Island thermal power stations.
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