Transpower says it could easily upgrade its lower South Island network to feed the rest of the country should surplus electricity from Meridian's Manapouri power station come on to the market.
The grid operator says there are now some constraints around central Otago but work to improve it has already been approved and could be done within three years.
Manapouri is the country's biggest hydro station and sells most of its power to the Tiwai Pt smelter controlled by Rio Tinto, which has raised concern about its future.
Manapouri generates enough power each year for almost 600,000 homes and if it was sent further north it could shake up the electricity market.
Transpower chief executive Patrick Strange said his company had gained approval to upgrade the lower South Island network around the time that a large Meridian wind project in Otago was on the drawing board.
