Latest / Early Edition with Ryan Bridge / John Harbord: Major Electricity Users' Group Chairman on Transpower proposes spending $1.4b on Cook Strait power cables

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John Harbord: Major Electricity Users' Group Chairman on Transpower proposes spending $1.4b on Cook Strait power cables · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Transpower says they need to replace the electricity cable connecting
• 0:03
  Speaker 1: North and South. The cost one point four billion dollars.
• 0:05
  Speaker 1: The question how much will it cost us on our
• 0:07
  Speaker 1: power bills? John Harvard's Major Electricity us AS Group chairman
• 0:11
  Speaker 1: with me this morning, John, Good morning.
• 0:13
  Speaker 2: Good morning.
• 0:14
  Speaker 1: So cables went live first, went to nineteen sixty five,
• 0:18
  Speaker 1: replaced nineteen ninety one. End of life is twenty thirty.
• 0:21
  Speaker 1: So we've got to do this, don't we.
• 0:24
  Speaker 2: Oh, we absolutely do. The cable that connects the North
• 0:27
  Speaker 2: and South Island literally just keeps the light on in
• 0:29
  Speaker 2: both islands, so it's absolutely essential infrastructure.
• 0:32
  Speaker 1: What'll it do to prices? Change? Making the making the fix?
• 0:37
  Speaker 2: Yeah, So the one point four billion dollars that Transpaer
• 0:39
  Speaker 2: has quoted, that will all get passed on to consumers.
• 0:42
  Speaker 2: So the proposal effectively is that consumers will pay one
• 0:46
  Speaker 2: point four billion dollars more than they're currently paying. And
• 0:49
  Speaker 2: in the proposal, Transpayer talks about possibly doing an additional
• 0:52
  Speaker 2: cable for extra sort of backup security that will be
• 0:55
  Speaker 2: in addition to the one point four billion.
• 0:57
  Speaker 1: All right, we'll come to it back up in a second,
• 0:58
  Speaker 1: but let's stick with one point for for now, that
• 1:01
  Speaker 1: sounds like a lot of money, but it would be
• 1:03
  Speaker 1: spread over the life of the asset, wouldn't it, and
• 1:06
  Speaker 1: transmission only eight percent of our bill as it is,
• 1:08
  Speaker 1: Do we have any idea what the number might actually
• 1:10
  Speaker 1: look like?
• 1:12
  Speaker 2: Not yet. It's important to note that the transper has
• 1:15
  Speaker 2: to put a proposal to the Commerce Commission, and the
• 1:18
  Speaker 2: Commerce Commission will have the final say and how much
• 1:20
  Speaker 2: transpayer will spend, So until that happens, we don't know
• 1:23
  Speaker 2: the final number.
• 1:26
  Speaker 1: What to happen to manufacturers because they're obviously the big users.
• 1:30
  Speaker 2: Yeah, so what typically tends to happen is a greater
• 1:34
  Speaker 2: proportion of the costs of these projects falls on large
• 1:37
  Speaker 2: industrial manufacturers, so they will pay sort of more than
• 1:41
  Speaker 2: a fair share of the burden. That we're not arguing
• 1:43
  Speaker 2: with that we need the electricity, but as we know,
• 1:46
  Speaker 2: many of our manufacturing companies are already struggling with very
• 1:51
  Speaker 2: high electricity prices, and that will just make this situation
• 1:54
  Speaker 2: even worse.
• 1:55
  Speaker 1: We don't have a backup cable as is, right? Is
• 1:58
  Speaker 1: that done? What do other countries do.
• 2:02
  Speaker 2: Well? Most other countries are much more connected with each other.
• 2:06
  Speaker 2: So if you think if you're in Europe. You know,
• 2:08
  Speaker 2: if you're France and your Germany, you've got a land border,
• 2:10
  Speaker 2: you just you know, you've already got pylons and the
• 2:13
  Speaker 2: rest of it that connect to each other. But there
• 2:15
  Speaker 2: are countries where they do need cables that cross the sea.
• 2:18
  Speaker 2: So it's not new technology. It's the best way.
• 2:22
  Speaker 1: To do it, and it would be good to have
• 2:24
  Speaker 1: a backup, wouldn't it, just in case things go tips up.
• 2:27
  Speaker 1: Who benefits most from the cable? Is it the South?
• 2:30
  Speaker 1: You know? Do we send because I mean traditionally you
• 2:33
  Speaker 1: think that the South sends more to us. Is that
• 2:35
  Speaker 1: still true.
• 2:38
  Speaker 2: On average? Yes, but it's sort of a recent historical
• 2:42
  Speaker 2: trend has certainly been that more electricity is flowing from
• 2:46
  Speaker 2: the North Island to the South Island. Particularly, think like
• 2:49
  Speaker 2: last year or this year, which are dry years in
• 2:51
  Speaker 2: the southern hydro lakes are low and water well. Quite
• 2:54
  Speaker 2: often the North Island is moving, say geo through more
• 2:57
  Speaker 2: electricity or other forms of renewable tricity. They are just
• 3:00
  Speaker 2: more prevalent in the North Island down to the South Island,
• 3:04
  Speaker 2: and you get different seasonal flows as well, So the
• 3:06
  Speaker 2: electricity certainly flows both ways now more than it used.
• 3:09
  Speaker 1: To interesting, John, appreciate your time this morning, John Harvard,
• 3:12
  Speaker 1: a major Electricity Users Group chairman.
• 3:15
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• 3:18
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• 3:19
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• 3:22
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