About transmission
Physical system
New Zealand’s transmission system is made up of over 12,000 km of high-voltage transmission lines and more than 170 substations. Comprised of a long trunk with smaller side branches, it connects power stations owned by generating companies to substations feeding the local networks that distribute electricity to homes and businesses. Some large industrial users of electricity also receive their power directly from the national grid.
Most of the grid operates on alternating current (the HVAC system), but there is also a direct current (HVDC) link for long distance transfer of power between Benmore in the lower South Island and Haywards near Wellington, which includes the ‘Cook Strait cable’.
Transmission arrangements
The key parties involved in the transmission sector are the Minister of Energy and Resources, the Commerce Commission, the Authority, Transpower, and Transpower’s customers.
Transpower owns, operates, maintains and develops the national grid. The grid underpins the New Zealand electricity industry, and Transpower is responsible for working with the Authority to ensure the grid meets the required reliability and service levels, and that there is sufficient grid investment to meet New Zealand’s needs. It has contracts with those parties that connect to the grid (its customers), setting out the terms on which parties can connect to the grid and use the grid services provided. Transpower is responsible for grid planning, including proposing transmission investments to the Commerce Commission, and reporting on asset management plans and forecast grid capabilities over time.
The processes and responsibilities for transmission, which includes comprehensive arrangements for transmission pricing, transmission services, and grid investment, is set out in Part 12 of the Electricity Industry Participation Code 2010 (Code).
As a state owned enterprise, Transpower is required to operate as a successful business, including earning a commercial return on its assets. However, it is also subject to the Commerce Commission administered targeted price control regime, which has the objectives of limiting the ability of lines companies (Transpower and distribution companies) to exercise monopoly power, and increasing incentives on these businesses to improve efficiency and share efficiency gains with consumers.
This page is related to: Transmission.