18 Dec 2025
The Commerce Commission has given Transpower draft approval to invest $193 million in its upper South Island electricity transmission network to ensure it can continue to meet rapidly growing demand throughout large areas of the South Island.
This critical infrastructure allows areas north of Twizel to access lower cost and reliable electricity produced by the major hydro generation schemes to the southwest of the island.
Transpower Executive General Manager Grid Development Matt Webb said the investment will future proof electricity supply for this extensive area of the South Island into the 2030s, enabling communities to grow and people and businesses to thrive.
“Electricity demand in the South Island has been rising consistently in recent years, especially in summer when irrigation significantly increases power usage,” he said.
“This is only going to accelerate with more homes and businesses switching to electricity for more of their energy demand, for instance through adoption of electric vehicles and with the replacement of coal for a lot of industrial processes.
“As an example of demand growth, we are already seeing significant electrification of South Canterbury’s farms and primary processing sectors. We want to ensure we continue to be an enabler of this growth by linking communities with the most reliable and low-cost electricity.”
Transpower’s grid plays a critical role putting downward pressure on electricity prices because it allows consumers to access the cheapest generation available as this changes across the day, which increases competition among generators.
Transpower’s plans include upgrading existing transmission lines in the Canterbury Plains so they can carry more electricity. It will also install voltage management equipment and build two new switching stations near Orari and Rangitata to better connect existing lines and improve reliability of supply.
While this is a critical investment in South Island communities, Mr Webb said that Transpower is also considering what ‘non-transmission solutions’ could support its investment or even allow some of it to be delayed with savings passed on to consumers.
“Our proposal includes $7 million to identify and implement transmission alternatives such as demand response strategies, where industrial customers or electricity retailers work with their customers to shift demand away from peak demand periods,” Mr Webb said.
“These non-transmission solutions can help reduce how much electricity we need to carry, especially at heavy use peak times, improving the performance of existing transmission infrastructure and reducing or delaying the need to upgrade or build new lines.”
The Commerce Commission will now consult on the proposal as part of its process to rigorously test Transpower’s investment plans to make sure the national grid operator continues to deliver Kiwis a reliable electricity supply at the best value for money. Transpower’s share of most people’s retail bill is less than 8%.
More information about our upper South Island upgrade project can be found here.
For more information:
Please contact Transpower’s Communications team at [email protected] or 021 195 8613.