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State-owned enterprise Transpower is set to release plans for a $600 million line upgrade.
The upgrade is designed to bolster the main transmission line between Benmore and Wellington and meet demands created by new electricity generation in the South Island.
Details of the plan will be released at the end of the month.
At the same time, Transpower is keeping a close watch on the demands, and possible constraints, on local transmission lines within Otago and Southland if the Project Hayes and Mahinerangi wind farms are built.
Transpower's general manager of grid investment Tim George yesterday outlined how it planned to cope with Project Hayes, Mahinerangi and other renewable electricity generation projects being planned in the South Island.
This follows arguments between South Island generators over Transpower's ability to transmit the extra electricity.
There are two issues - Transpower's "local transmission" within Otago and Southland, and the high voltage direct current (HVDC) link which delivers electricity from Benmore to Wellington through the Cook Strait cable.
Mr George said once a decision was made to upgrade the link, there would be more certainty for South Island generation companies and they were "more likely" to invest in new generation. At the end of the month, the options for upgrading the link and a preferred choice would be released for public comment by February 1.
Those options ranged from leaving the HVDC link as it was through to upgrading it to 1700MW.
At this stage, the preferred option - costing between $500 million and $600 million - is upgrading the lines' capacity to 1400MW. Only 1200MW would be delivered to Wellington without a new Cook Strait cable.
Mr George said there were options to obtain "a bit more capacity" on local transmission lines.
Those options were "not on the books at the moment" but, when Project Hayes and the Mahinerangi projects became firmer, Transpower would look seriously at upgrading those lines.
Transpower recovered costs of such upgrades through the Transmission Pricing Methodology, set by the Electricity Commission.
Mr George said the costs associated with the HVDC link were recovered from designated South Island generators who used it. He accepted that cost was eventually passed on to consumers through what they paid for their electricity.
The costs associated with local transmission lines were recovered from the distribution lines companies which passed them on to consumers through lines charges.
Minister of Energy David Parker would not comment on the issues involved which, he said, were up to the industry to resolve.
Appeals to the Environment Court on the Central Otago District Council's granting of resource consent to Meridian's Project Hayes wind farm close with the court on November 20. As of yesterday, no appeals had been received.
