Example Of Report On Transpower Transmission Grid Expansion

Introduction

Transpower is a state owned enterprise responsible for power transmission and distribution in New Zealand. It is a wholly owned subsidiary of Electricity Corporation of New Zealand (ECNZ). From the 1950s to 2007, New Zealand has seen constant increase in the demand for electricity. However, since 2007, the overall industry as well as residential demand has stagnated. Especially, in the South Island, the overall industrial demands have actually declined in the last 6 years (MFE, 2015). However, Auckland is one exception to the rule. Auckland, where the demand of electricity is still growing at a high rate, is by far the highest consumer of electricity among all New Zealand cities. However, most of the power generation in New Zealand happens in the South Island. National transmission grid system carries that generated electricity through 220 KV overhead transmission lines and a 400 KV HVDC underwater cable to carry power from South Island to North Island (MFE, 2015). With the increasing demand, Transpower needs to invest in additional transmission and distribution lines. However, it is important to understand if apart from investing in new transmission lines, Trasnpower has any other alternative to address the additional power requirements in Auckland. This paper will analyze current demand and supply scenario in New Zealand and look for possible alternatives to address the demand supply gap in Auckland.

New Zealand Electrical Supply Landscape

Transpower is responsible for supplying power from the source of power generation by companies such as Mighty River Power and Meridian Energy to towns, cities and industrial users. Only a few large industrial users are connected directly to the national grid. Most of the time, electricity distribution is carried out by companies such as Vector and Orion with Transpower only supplying power to those companies (MBIE, 2015). Transpower operates 5,719 kilometers of 220 KV lines, 4,719 kilometers of 110 KV lines and 797 KV of 66KV and 50 KV lines (MBIE, 2015). Apart from these lines, Transpower also operates the 611 Kilometer 400KV HVDC inter-island transmission cable. The total capacity of the national grid is 14, 5000 MVA (MBIE, 2015).

Current Process of Addressing the Increasing Power Demand in Auckland

Hydro power is the main mode of energy source for the electrical grid. As most of the rivers capable of generating electricity are located in the South Island, the majority of the energy sources for New Zealand are in the south. The overall generation capacity is almost equal in both islands, but the demand in the North Island is almost three times more than that of South Island. As North Island demand (mostly Auckland and surroundings) goes up, more and more energy will be drawn from the national grid. This means electricity will travel thousands of kilometers after generation to reach the point of consumption. That is why the overall transmission loss in New Zealand national grid is one of the highest (7%) among all the developed countries. Countries like Iceland (3%), UK (2%), the United States (3%) and Germany (2%) have low transmission losses compared to New Zealand mainly due to short average length between demand and supply points (Marshall, 2012).
Also, additional high voltage overhead lines have many impacts. It requires a lot of land to build high voltage overhead lines. HVAC lines close to the city can cause health hazards due to continuous electrical induction. Besides, high voltage lines pose environmental threats and are not good for aesthetics. The cost of additional lines is also not less, so it is often not easy to get approval for new lines.

Problem with HV Transmission Lines

Currently, high voltage transmission lines are used for carrying almost 90%-95% of all the energy used in New Zealand (MBIE, 2015). In many countries, this is a good percentage as HVAC lines minimize losses over long distance better than any other method. HVAC lines have long life and need minimal maintenance under normal weather conditions (Marshall, 2012). However, in the case of New Zealand, because of adverse weather conditions, HVAC transmission lines have effective life, which sometimes is as low as only 15 years. Especially, HVAC lines that are along the sea shore get rusted within a few years after installation or maintenance. HVAC lines in the geothermal areas get corroded within 10 years (Marshall, 2012). Transmission lines, passing through mountain ranges or areas that receive heavy rainfall, also need frequent maintenance.

Alternatives to Transmission Lines

New Zealand has always been a big proponent of clear energy sources. It is among one of the few countries in the world where the share of renewable sources of energy is more than traditional sources. Close to 79.9% of all energy sources are renewable (MBIE, 2015). The major two sources of energy are hydro energy and geothermal energy.

Solar Energy

Solar energy is one form of energy that is totally clean energy and requires no transmission. Solar energy sources (known as solar panels) can be installed on the demand point itself so that no transmission is required. As Auckland does not get too much rainfall and sees many sunny days during the year, solar energy is a viable option that can reduce the requirement for transmission (Vaughan, 2013). Unlike cities like New York, Tokyo and Paris where the main growth of the city is vertical, Auckland is growing horizontally. This means almost each new city suburb and house has enough space to install solar panels. A study conducted by Nirmal Nair, Senior Lecturer at University of Auckland, found that there is great potential to increase solar energy and it can cover up to 15% of total energy demand in low density suburbs of Auckland (Vaughan, 2013).
If energy demand can be met using solar energy, then the overall new transmission requirement will be less. In fact, solar energy, also known as the grid free energy, will reduce the requirement for transmission. However, as the installation of solar energy panels and spreading awareness is not the responsibility of Transpower, it should work with ECNZ to increase the usage of solar energy. Currently, the solar power usage is growing at 0.8% annually, which will be unable to fulfill the increased demand (Batstone and David, 2014). Therefore, it is important that ECNZ creates framework and subsidy for easy installation of solar panels in residential and commercial buildings.

Small Generators

Looking at the energy consumption pattern of Auckland, it can be concluded that the average energy consumption of Auckland is, in fact, not increasing much. Although the number of households has gone up, but due to the usage of energy efficient appliances, the overall demand per household has come down by close to 5% YOY for the last 5 years (Batstone and David, 2014).
This is a trend that is likely to continue for the next few years. Overall, the energy demand will be almost constant. However, the main problem is surge in pick demand. The overall industrial sector demand has reduced post 2007, but the commercial and residential demands have increased. This has caused a huge difference between peak and off peak demand. Demand in the evening is witnessing a huge surge compared to other times of the day. To meet this excess demand, Transpower can work with ECNZ and other energy companies to build small diesel and gas powered generators. Currently, technology is available to build portable gas powered generators that can cater to demand up to 100 MW (Vaughan, 2013). These small power stations close to the demand points will reduce the requirement for creating additional transmission lines. The average cost per unit energy will go up in this case, but this will introduce flexibility and diversity in the overall electricity grid. Also, the initial investment is not significantly high for building small generators for peak demands compared to the installation of transmission lines and building big generators for Auckland and Northland (MFE, 2015).

Problem with Alternative Sources

Although there seems to be some benefit of the alternative sources, it has some disadvantages as well. Solar energy is an alternative that is still not a reliable source. It is more like a source that can supplement the primary source of energy. Also, solar energy is mostly suitable for non-congested suburbs and houses with a lot of roof space. Still it is not suitable for commercial and industrial use (Vaughan, 2013).
Small generators, on the other hand, definitely provide a solution to meet the peak demand, but they increase the average cost of electricity per kWh. Also, small generators are not a long term solution for constant increase in demand. Big generators with HVAC lines are better for achieving economies of scale (MFE, 2015).

Recommendations and Conclusion

As the energy consumption in New Zealand is not increasing rapidly, it is important to address the peak demand issue using small gas powered generators. These small generators can be used intermittently when there is a peak energy requirement. These generators can be installed close to the demand point to nullify the requirement for transmission lines. They will also diversify the risk in the case of a grid failure and provide some sort of backup for critical loads.
Solar energy source will ensure that New Zealand energy landscape moves slowly from a grid oriented structure to a more grid free energy structure. If solar energy can cater to the needs of residential and commercial customers partially in Auckland and in other North cities, then it will give less stress on the already stressed and old national grid system. This will give Transpower time and cushion to upgrade its old transmission grid system.
Finally, transmission grid cannot be totally replaced in the electricity structure of New Zealand as most of the hydro power generation is in the south and geothermal in North Island. It is not possible to shift those natural energy sources. Therefore, the majority of the energy supply will still be dependent on the transmission grid. Because of salt corrosion, geothermal condition, mountain weather and heavy rain, national grid in New Zealand requires regular upgrade and maintenance. Transpower should allocate enough budgets to maintain its current network and should also increase transmission lines if there is a sustained increase in energy requirement. Furthermore, to decrease redundancy in the grid network and to avoid power outages like 1998 in Auckland (5 weeks power outage) or in 2006 (24 hour complete power outage in Auckland and Northside), Transpower should install additional transmission lines.

References

Batstone, S and David, Reeve. (2014). Trends in Residential Electricity Consumption. Sapere Research Group. Retrieved on 14 April, 2015 from <file:///C:/Users/debsankar.das/Downloads/ENA-submission-on-proposed-DPPs-for-EDBs-2015-Sapere-Trends-in-Residential-Demand-15-August-2014.PDF>
Ministry of Business Innovation & Employment (MBIE). (2015). Electricity Data Tables. Retrieved on 14 April, 2015 from < http://www.med.govt.nz/sectors-industries/energy/energy-modelling/data/electricity>
Vaughan, G. (2013). Auckland University research suggests strong potential for the development and use of solar power across the city's low density suburbia. Interest. Retrieved on 14 April, 2015 from <http://www.interest.co.nz/business/65391/auckland-university-research-suggests-strong-potential-development-and-use-solar-powe>
Boyd. P.A., Parker, G.B. and Hatley, D.D. (2008). Load Reduction, Demand Response and Energy Efficient Technologies and Strategies. The U.S. Department of Energy. Retrieved on 14 April, 2015 from <http://www.pnl.gov/main/publications/external/technical_reports/PNNL-18111.pdf>
Ministry for the Environment, New Zealand (MFE). (2015). The Problems with Development near High-voltage Transmission Lines. Retrieved on 14 April, 2015 from <http://www.mfe.govt.nz/publications/rma/national-policy-statement-electricity-transmission-further-guidance-risks>
Marshall, W. (2012). Maintenance Management of Transmission Lines using Condition Assessment and Computer Data Analysis. Line Tech Consulting. Retrieved on 14 April, 2015 from <http://www.linetech.co.nz/documents/Microsoft%20PowerPoint%20-%20Iceland08.pdf>