Editorial: Plan opens up options for power

Todd Energy's alternative to Transpower's proposed 400kV Waikato to Otahuhu transmission line will doubtless be ridiculed by many in the electricity industry. Such is the lot of those out of step with mainstream thinking. But that does not mean it should be rejected out of hand. There are simply too many advantages, and too strong a logic in Todd's plan to build a 200MW power station in the heart of Auckland for it to be dismissed lightly.

Small stations close to the area of demand have often been mentioned as an answer to Auckland's growing need for power. If enough electricity could be produced, the need for a more powerful national grid, and the giant pylons that so irk Waikato landowners, could be negated.

Until now, it has been envisaged that such stations would be powered by renewable energy sources. This, even if economically feasible, would take years to implement. Time, however, is in short supply, given that network company Vector anticipates Auckland may be hit by power cuts as soon as the winter of 2007.

An advantage of Todd's proposal is that its station would be fuelled by gas. This is also where it parts company with most in the industry, who see a dwindling Maui field and nothing in New Zealand of great significance to replace it. Contact Energy, for example, says its plans for a new gas-fired station alongside its present plant at Otahuhu are on hold partly because of the uncertainty of gas supply.

Todd perceives no such problem. Its submission to the Electricity Commissioner, Roy Hemmingway, who is investigating Auckland's power supply options, contends there is sufficient gas to supply a 200MW station with the existing reserves. It also appears optimistic that exploration will uncover a future supply. That will only be confirmed by major discoveries. Yet Todd has strong exploration credentials. Indeed, it has been an ever-present name since Shell BP Todd's ground-breaking success at Kapuni in the 1960s.

If Todd's optimism proved unfounded, the alternative would be to import gas. But that is far from ideal for either the company or the wider economy. At a time of straitened supply, a key piece of Auckland's infrastructure would be hostage to fluctuating price and potential stocking difficulties. Supply uncertainty is a scenario unlikely to impress the Electricity Commissioner.

Other aspects of the proposal have considerable appeal, however. None more so than the estimate that it could be generating power within 24 to 30 months. This dovetails encouragingly with Vector's blackout timetable, more so than Transpower's line, which would be built by 2010. Additionally, Todd would build stations in a modular way, adding capacity when needed. There would be little to fear environmentally because such stations occupy only small pockets of land.

The Electricity Commissioner will decide next year whether to approve the Transpower project or an alternative means of guaranteeing Auckland's power supply. Mr Hemmingway has already indicated that alternative proposals must be as far advanced as that of Transpower. This puts pressure on Todd to firm up the details of its proposal, especially those related to funding and gas supply.

Whatever the outcome of the commission process, Todd's input will have been beneficial. At the very least, it promotes debate about alternatives to a transmission line. At best, it could be a superior option. That judgment can be made only when Todd's full proposal is unveiled.