Transpower’s updated electricity scenarios will guide future investment

21 December 2021

Transpower today published its view of future electricity supply and demand scenarios that will drive upcoming investment on the National Grid. 

John Clarke, Transpower’s General Manager Grid Development, said the Net Zero Grid Pathways Scenarios Update 2021 outlines five possible scenarios and will be critical to determining the grid investments needed to 2035, to enable renewables and electrification. 

“These investments include Transpower’s Net Zero Grid Pathways 1 (NZGP1) major capital project proposal to the Commerce Commission, which is currently being developed for submission in late 2022. The scenario work will also help inform further investments beyond 2035 and out to 2050. 

John Clarke, General Manager Grid Development, said Transpower had compiled the scenario updates with input from a range of submitters and thanked those who have shared information through the consultation process. 

“In the next five to 15 years, the electricity sector is anticipating high levels of growth in both electricity supply and demand. Given the significant grid developments these scenarios could drive, Transpower sought the views of existing generators, future investors, others in the electricity sector, and electricity users. We are very appreciative of these inputs,” Mr Clarke said. 

Mr Clarke said the five scenarios are reasonable modifications of the Ministry of Business, Innovation and Employment’s 2019 Electricity Demand and Generation Scenarios (EDGS) in the context of feedback from Transpower consultations, advice from an expert panel convened in late 2020, the government direction toward 100% renewables and anticipated electrification of transport and process heat. They also align well with earlier scenario work by Transpower and the Climate Change Commission. 

“Early analysis of the scenarios supports investment in the locations we had previously identified as likely places where grid capacity needed to be increased first, for Phase 1 of Transpower’s Net Zero Grid Pathway (NZGP) programme. These locations are on the High-Voltage, Direct Current (HVDC) link between the North and South Island, in the Central North Island and the area around Wairakei,” Mr Clarke said. 

“There is still a lot of uncertainty in terms of what new generation will emerge, precisely how electricity demand will increase and change over time, and the timing and decisions around variables such as New Zealand Aluminium Smelter’s exit, the outcomes of the New Zealand Battery Project, and closure of the Huntly Rankines. Transpower will take a base position on these issues in applying the scenarios to identify our NZGP1 short list of grid investment options in the first half of 2022. 

“In doing that, we will use sensitivities to determine what impact changes in our assumptions will make and to help identify least regrets options, where we can plan for investments that offer the maximum benefit, despite the known uncertainties." 

Mr Clarke said transmission alternatives also have a role to play and Transpower recognises this. 

“We are bringing forward our Request for Proposal for upper North Island voltage support, and also expect other transmission alternatives to emerge and support capacity on the grid over time.” 

NZGP1, as the first major capital project proposal these scenarios will be used to provide input to, will move to the shortlisting stage in the new year. Transpower plans to consult on the short list of potential investments in April/May 2022. Following shortlisting, Transpower anticipates submitting a proposal to the Commerce Commission in October/November 2022. Construction of any approved projects or upgrades out of NZGP1 MCP could potentially start in late 2023.  

View the NZGP1 Scenario Update, December 2021.

 

For further information, please contact: 

Rachael Drummond, Senior Corporate Communications Advisor, 021 394 803.