KEY POINTS:
Major investment in the South Island's transmission grid is needed within the next five years to avert blackouts in Christchurch and to enable renewable energy generation projects to meet growth in demand, Meridian chief executive Keith Turner says.
Speaking to Parliament's commerce select committee yesterday, Turner said the state-owned generator and retailer was concerned about the security of supply in the South Island.
"We are seeing really growing pressure on South Island AC lines. The main transmission grid in the South Island is constrained into Christchurch at certain times."
Turner later told NZPA that unless new or upgraded lines were in place by 2010-2012, Christchurch and northern parts of the South Island would suffer blackouts.
He believed national grid operator Transpower and the Electricity Commission had not sufficiently addressed the problem as yet and time was running short.
Renewable energy such as wind power and hydro could supply sufficient power to meet the growth in demand over the medium to long term, but only if the grid was sufficiently robust to allow South Island generation projects to supply North Island consumers, said Turner.
"It would be very difficult to meet future growth from North Island resources alone," said Turner.
Meridian was also concerned about the effect of an Electricity Commission ruling that will see South Island generators meet operating costs for the high voltage direct current (HVDC) link from the South Island to the North.
While the link had been used to run power from the North Island to the South for 10 months of last year due to unusually low hydro lake inflows, Meridian was facing a 45 per cent increase in HVDC charges from $54 million to $78 million.
"We think that's a particularly discriminatory charge and we don't see any reason why the DC link should be treated any differently from AC lines," said Turner.
Electricity Commission deputy chairman Peter Harris said the commission was increasingly looking at the issues associated with wind generation.
They included the need to for wind generation to be distributed throughout the system in order to maximise security of supply. As energy output from wind generation projects could "ramp up very quickly" they required technology to prevent "sudden bursts" of power burning out the system. The commission had a project underway to examine the issues.
The commission is still looking for a replacement for chairman Roy Hemmingway, who was sacked last year.
