18 Jun 2026
Transpower welcomes the Commerce Commission’s final decision today to approve its $1.1 billion investment in New Zealand’s High Voltage Direct Current (HVDC) inter-island electricity link.
The HVDC link connects the North and South Islands, ensuring energy security, resilience and the ability to deliver lowest cost electricity to consumers. It includes an overhead line and undersea cables, with the undersea cables nearing the end of their expected 40-year lifespan and needing renewal by the early 2030s.
Transpower Chief Executive James Kilty says the decision from the Commerce Commission today means Aotearoa will be able to rely on the HVDC link into the future as electricity use continues to grow.
“The link is of national importance for three key reasons. Firstly, it allows Kiwis to access the lowest cost electricity around New Zealand each day. Secondly it plays an important role in keeping the power system stable – including helping us manage the more variable power flows from wind and solar, and finally it contributes to energy resilience by linking businesses and communities to many sources of electricity generation,” he said.
The investment includes four new undersea electricity cables – renewing the link and boosting electricity transfer capacity at the same time, as well as replacement cable termination stations on either side of Cook Strait.
“We appreciate the Commission’s timely consideration of this major capex proposal, with undersea electricity cables in high demand globally as many countries electrify,” Mr Kilty said.
“Having this decision now, with a good lead-in time, means we will be able to confirm a contract with the manufacturer of the new cables in time for them to be delivered and installed in the early 2030s when replacement is due. This reduces the risk of unplanned outages as the existing cables age.”
The investment approved today is Stage One of a wider HVDC Link Upgrade Programme. Transpower expects to consult on a separate, Stage Two, proposal to the Commerce Commission for a new IT system that controls the operation of the link at the end of this year.
Separately, following feedback received during consultation earlier this year, Transpower is further considering what happens to the existing cables once the new cables are installed. Further work will be undertaken closer to the time the cables are decommissioned to better understand the potential effects of leaving or removing the cables, and the cost of removal work.
Further information is on Transpower’s website at www.transpower.co.nz/hvdc-upgrade.
ENDS
For further information, please contact:
Transpower’s Communications team on 021 195 8613 or [email protected].
Notes to editors:
The HVDC link moves high voltage electricity between Benmore in the South Island and Haywards in the North Island. It includes an overhead line and, between Ōraumoa / Fighting Bay and Oteranga Bay, undersea electricity cables. The link was first put into service in 1965, with new undersea cables installed once previously, in 1991.
As the sole owner and operator of New Zealand’s electricity transmission network, Transpower must have Commerce Commission approval for the transmission charges it passes on to customers, including those to cover the costs of major investments. The Commerce Commission rigorously tests 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. It considered Transpower’s proposal alongside input from the electricity sector and others representing New Zealand consumers.
The approved investment will be recovered gradually through Transpower transmission charges beginning when the upgrades enter service in the early 2030s, spread over the expected life of the assets. Under the benefits-based pricing method, costs are shared between electricity consumers and generators that benefit from the HVDC link.
HVDC link upgrade programme video, photo and map resources for media are available here: HVDC link upgrade programme - media resources