Taslink thinks a Trans-Tasman power cable could be running by 2032. Photo / 123rf
A company wants to build a cable between Australia and New Zealand allowing the two countries to trade electricity.
Taslink estimates the project could increase New Zealand’s grid capacity by about 40% of current daytime demand, reducing prices for consumers.
If successful, the cable would begin construction in 2028 and enter operation in 2032. It would likely make landfall in New Zealand somewhere south of Auckland and connect to Newcastle, New South Wales.
The cable would be about 2600 km long, High Voltage Direct Current cable with capacity for 2 gigawatt to 3GW of electricity, allowing Australia to sell surplus electricity to New Zealand during our peak periods and New Zealand to sell surplus electricity in the other direction during Australian peaks.
Taslink believes the cable will cost $12 billion. It is the deepest HVDC in development anywhere in the world, the company says.
Taslink has been exploring the idea for two years. It successfully completed one private funding round and is beginning a second, which the company co-director Richard Homewood said would be in the “millions rather than billions”. A third capital raise is planned, focused on capital investment.
The company describes itself as a transtasman collaboration, with Homewood the Kiwi co-director, and John Telfer the Australian co-director.
Although the company is not seeking public investment, Homewood said “the option for Governments to have future involvement is always there”.
Homewood used last winter’s electricity crisis as an example of what the new cable could offer.
“Had the cable been in operation last year, New Zealand would have experienced a very different winter. Independent analysis indicates that, even conservatively, Taslink would have reduced $400m in power costs for New Zealanders — or a 23% reduction — in August alone.”
Homewood told the Herald there were several peaks throughout the day in both countries, when one country would sell its surplus electricity to the other. The company would be treated like both load and generation. While exporting power, the generating country would treat the cable as load and the consuming country would treat the cable as generation.
“When one market has surplus electricity at a lower price, we’ll purchase that and then sell it into the other market at a discount to whatever the electricity rate is that’s being offered in that market in real time.
“You’d be able to look at what’s happening. the New Zealand price goes up and then someone would be able to sell electricity from Australia to New Zealand and reduce the electricity price in whichever market we’re selling to at that moment in time.”
Both countries had a morning and evening peak, meaning four peaks on the cable a day when there would be a strong incentive to sell power from one side of the Tasman to the other.
Homewood told the Herald the company’s analysis had not indicated “any sort of regulatory or legislative showstoppers that would prevent it from being a smooth process to connect the two markets”.
Long transmission connections have been criticised in the past for losing power in transit, meaning they struggle to remain economical.
Homewood said this project, when operating at peak, would have losses of less than 15% and potentially less than 10%. This was mainly because the whole cable was HVDC, unlike other long transmission connections, which sometimes run through low-voltage areas, leading to losses.
Long HVDCs are in vogue. The longest such cable in the world is in China and runs for 3284 km. Other long cables are in development, including one that will run between Morocco and the UK. It will be 3800 kms.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.