Upper South Island upgrade project

Last updated: 19 Feb 2024

About the project

Electricity use across the upper South Island has been rising steadily, particularly during summer, when power is used for irrigation. With the growing shift toward a lower carbon, more electrified way of life and forecast electrification of South Canterbury primary processing, demand for electricity is expected to increase further.

The grid will face voltage stability issues and thermal constraints in the future, and the investment options we are proposing will address both problems.

In the upper South Island, there is not enough electricity generation to meet demand. Electricity is supplied into the upper South Island through high-voltage transmission lines coming north from the Waitaki Valley.

Long distance transmission like this requires additional voltage support to help maintain a reliable supply of electricity. Voltage support tools and equipment include bus couplers, switching stations and dynamic reactive support.

Voltage support for long-distance electricity supply to Christchurch has been an issue for a long time. Synchronous condensers were installed at Islington Substation (on the western edge of Christchurch City) for voltage support in 1955. In 1996 a further voltage support device, a static VAr compensator (SVC), called SVC3, was installed at Islington. A second, larger unit, SVC9, was installed in 2010.

In 2012 we began investigating long-term development plans to ensure voltage stability is maintained in the upper South Island. As the immediate need was relatively urgent, but the longer-term outlook was uncertain, we decided to split the investment into stages:

  • Stage 1, a low-cost investment for a new bus coupler at Islington Substation – a short-term deferral
  • Stage 2, a second (and potentially much larger) investment.

What we've done so far - Stage 1

The Stage 1 project sought funds to install a sixth 220 kV bus coupler at Islington Substation. This was a low-cost measure which allowed end-of-life voltage stability equipment at Islington to be decommissioned and at the same time ensured no voltage instability issues in the short term. The project also sought funds to investigate future switching station options further. We submitted our Stage 1 proposal in June 2012 and it was approved by the Commerce Commission in February 2013. The project was delivered and the bus coupler commissioned in 2014.

Following the switching station investigation that was part of Stage 1, in 2015 we sought and received an approved Output Amendment to our Stage 1 proposal from the Commerce Commission to add the ability to secure designations and property rights for potential switching stations in the future at two locations, Orari and Rangitata. This was to ensure that switching stations could be commissioned in time, if switching stations proved to be the preferred option to meet the voltage management needs for Stage 2. We actioned this as part of Stage 1. This Output Amendment has allowed this option to remain possible, but does not preclude the Stage 2 investigation process, which will involve long-listing and short-listing processes and consultations, and which may result in a different preferred solution.
 

What we're doing now - Stage 2

We are now in Stage 2 of this project, and we held a long-list consultation in August-October 2023. This was the first consultation to seek feedback about our thinking, assumptions, and possible early options for upgrades on the high-voltage electricity transmission network for the Upper South Island region.

Hearing from those interested in potential new generation, planned commercial or residential developments, and industrial conversions from fossil fuels to electricity helps us better understand what is happening, and what the future need for electricity will be.

The information received will help us refine our thinking and planning about the options we are looking into to provide for future growth.

This will provide further details about the project and an opportunity for industry and stakeholders to input into our thinking. This contribution is essential to help us refine our thinking and progress to a short-list consultation.

View the consultation documents and submissions

What happens next?

In 2024, we will consult again on a short-list of options following feedback from the first consultation, and further technical investigations and analysis. It will give a clear picture of the benefits and costs involved with each option. We’ll be continuing to talk with organisations and groups in the region throughout this year and next to keep our insights and forecasts up to date.

Keep an eye out for our consultation updates, or email us at [email protected] to receive an email at project milestones.

 

Correspondence between Transpower and the Commerce Commission regarding this project

Transpower's Notice of Intention to the Commerce Commission
This letter outlines our planned Major Capex Proposal project for the upper South Island upgrade project to the Commerce Commission, identifying the envisaged approach to staging investments and suggesting a timeline.

Letter from the Commerce Commission agreeing preliminary matters and timeframes
The Commerce Commission responds formally to our Notice of Intention, expressing comfort with proposed approach and agreeing a timeline for the process, as is required under cl 3.3.1(3) of the Capex IM.