Huge grid upgrade opportunity
What has been described as the probably the biggest infrastructure project undertaken in New Zealand was announced recently from a suitably lofty height – the 28th floor of the Lumley Centre in Auckland’s inner city. BY GAVIN RILEY
Major contractors joined bankers, investors, consultants and representatives of power companies and local authorities to hear Transpower chairman Wayne Brown unveil details of the state-owned organisation’s plan to spend $5 billion on upgrading the national electricity grid over the next five or six years.
The grid, as with roading, is a vital part of New Zealand’s infrastructure, yet has been badly neglected over recent decades. Built more than a century ago, it received significant investment in the 1950s and 1960s, but this input began to decline in the 1970s just when demand for electricity started to rise steeply and unceasingly.
Alarm bells sounded in 1998 when aged cables burned out and Auckland’s central business district suffered a crippling six-week power blackout – an event Wayne Brown said was reported on the front pages of newspapers in countries around the globe, which could not believe that a small, modern nation had allowed such a crisis to happen in its largest city.
In announcing the grid’s intended massive upgrade, Brown chose his Auckland audience carefully. Strong opposition to Transpower’s plan to put massive pylons through the Waikato as part of reinforcing Auckland’s power supply has taught him he needs the backing of influential industry groups if he is to win over decision-makers, particularly politicians. So he is taking his support-seeking message round the country.
With work opportunities a possibility, contractors should rally round – the more so because Brown is someone just like them. Though best known for his chairing of Transpower and the Far North District Council, and for his previous leading role in implementing health-sector reforms, he is a registered engineer who in earlier years worked on road, power, tunnel and dam projects.
And he has a reputation for getting things done. NZ Council for Infrastructure Development chief executive Stephen Selwood referred to him at the Auckland meeting as a “Mr Fixit”.
So he can be expected to push through the grid upgrade, described by Selwood as “very much catch-up investment” – an assessment with which Brown agrees.
“The network is generally quite old yet it’s working harder than it has ever done,” he said.
“We have some transformers that are 70 years old and they’ve got more load on them than ever before. It’s becoming harder and harder to get planned outage time. If you’re going to fix parts you must switch other parts off. It’s getting harder and harder to do that.”
Replacing old transformers is not a simple matter. “A big transformer weighs 160 tonnes, costs $10 million and you wait 20 months for it because New Zealand is only a small player [in global terms],” Brown said.
Transpower’s planned $5 billion spending consists of three major projects:
Other projects are the $99 million Otahubu substation diversity (2010) and the $141 million Wairakei ring reinforcement (2013).
There are also many smaller upgrades across the country, costing a total of $330 million and either recently completed, underway or planned.
Transpower’s reinforcement programme includes spending between $1.5 and $2 billion on the wider reinforcing of the power supply to and through Auckland, $52 million in the lower North Island, $54 million currently underway in the upper South Island on top of $130 million already spent, the previously mentioned HVDC strengthening, and a cost to be calculated in the lower South Island where 1000MW of wind power will eventually come on stream.
The last-named presents a difficulty. “If a generator wants a wind farm it can get it up and going in 18 months, but it takes Transpower seven years to extend the grid to meet that new investment. So it’s not a good mix,” Brown said.
The Otahuhu substation diversity project is part of reinforcing power supply to Auckland. When Otahuhu is commissioned in mid-2010, power to Auckland will go through two substations, the other being Pakuranga, thus providing security against an unlikely but catastrophic event such as the 1998 blackout.
Improvements are to be carried out at both ends of the HVDC line, the only high-voltage transmission link between the South and North Islands. At Benmore substation the switchyards will be greatly enlarged. At Haywards, stage-one construction of the state-of-the-art pole 3, which will have a nominal 700MW rating, will begin early next year. The remaining stages will be spread over a number of years.
The Wairakei ring reinforcement will facilitate the connection of up to 1000MW of new thermal generation, which Brown described as a billion-dollar industry in Taupo.
He urged his Auckland audience to support Transpower’s planned national-grid upgrade, especially as some of them would earn money from it. “It’s a very, very important series of investments. We must develop product to the market,” he said.
Contractor Vol.33 No.10 November 2009
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