Rescuing the grid

Patrick Strange, the man in charge of running Transpower, is concerned with the company’s aging assets and the national grid’s ability to cope with dry winters, closures and other unplanned scenarios.   By Alan Titchall.

As Transpower’s chief executive officer, Patrick Strange is responsible for distributing our electricity generation through $4 billion worth of assets, including 11,8000 kilometres of high voltage lines, 178 substations, and more than 40,000 towers and poles. A lot of it was built in the middle of the last century and needs replacing.

Strange holds a PhD in engineering and has held a number of senior executive roles in the energy sector in the United States and New Zealand, including directorships of Contact Energy and Mighty River Power.

He didn’t rush into the job of leading Transpower through its proposed, and much needed, transmission investment programme over the next 10 years.

 There’s been no significant investment in grid infrastructure since the 1970s, he says, while demand and loading has climbed steadily, placing further stress on these assets and making the network less tolerant of faults.

“Many of our towers, transformers, circuit breakers are over 40 years old, and some are older than 70 years old,” he says, and many assets are rapidly approaching end of life and need to be replaced if a satisfactory level of performance and reliability is to be maintained.

Meanwhile, constraints are frequent and it is getting more and more difficult to take assets out of service for planned outages. “The South Island grid has a maintenance window of just five weeks (80 percent load), compared with 10 weeks grace in 1997. Getting lines out for upgrading is becoming a real issue.”

There’s no way current grid assets will meet tomorrow’s needs, iterates Strange. The country needs at least 150MW of new generation each year and under the country’s renewables target, put in place by the Labour Government and endorsed by National, much of the new generation will be remote from the load centres.

The aging asset problem has been made more pressing by very low rates of reinvestment from 1990 until recent years.

“The expectation in the late 1990s was that there would be widespread uptake of emerging small scale generation technologies sited close to load. Transpower’s management envisaged that the development of this technology would, over time, mean that the national grid would become increasingly under-utilised. 

“As a consequence, it was perceived that minimal reinvestment should be undertaken in long life assets, like towers or transformers, as they would only be needed for a finite period.”

This scenario did not develop, he says. “Instead, the need for a more reliable and robust national grid has become apparent. This would be true even with current levels of renewables, but is especially so with the increasing focus on the development of renewable energy such as wind – which is often in remote areas, a long way from where it is needed.”

The good news is that Transpower has already launched an assertive replacement programme to address its aging asset base, and there are more than 50 projects worth over $2 billion in progress, including major grid and substation upgrades (see story on page 42) already approved by the Electricity Commission.

Two of the largest projects are the HVDC grid upgrade costing more than $600 million and due for completion by 2013 (see story on page 22), and the North Island grid upgrade worth another $6.8 million.

Between 1995 and 2005, capital expenditure on new grid build and asset renewal averaged around $100 million per year. Over the next decade, Transpower expects to spend $3 to $5 billion on a progressive asset management programme and spares policy.

To make sure it was on the right course, Transpower commissioned international engineers DuPont to review its procedures and assets.

The finished review contains no surprises, says Strange, including a major constraint on Transpower’s ability to maintain a healthy grid with such a vast diversity in asset types, manufacturers and system voltages – making it difficult to have common maintenance practices and a level of strategic spares.

New Zealand’s isolation with respect to manufacturers of major assets, leads to long lead times on procurement.

Strange says Transpower has its spares problem already in train. “The new ‘grid performance division’, separated out in our recent reorganisation to give focus to this area, has already sought and gained approval for the procurement of strategic transformer spares.”

Another weak area indicated by DuPont’s report involves industry skill history. Considerable intellectual knowledge has been lost or divested with the contractor since the current business arrangement was set up back in 1990, says the report.

“It was originally expected that the contractor would become the custodian of the assets and would provide all that is necessary to keep the asset healthy. This has not been the case, as such drivers do not exist within the contracting base,” says Strange.

“Transpower needs to regain the knowledge lost and become a truly informed buyer with respect to knowing and understanding the assets and with respect to both the procuring of services and of new assets.”