Alpine eyes big power investment

GROWING demand for electricity in South Canterbury will likely see more than $12 million invested in Alpine Energy's network over the next few years.

Investment in farming, especially irrigation and dairying, is a major factor and the maximum demand of 120 megawatts is now happening in summer. In winter peak the demand is around 90 megawatts.

Alpine chief executive Greg Skelton said there had been eight years of growing demand, well above the national annual GDP-driven increase of 1-2 per cent.

Alpine is in negotiations to build a new substation in the Waimate area to provide improved security of supply, especially in the Studholme, Waihaorunga and Glenavy areas.

Mr Skelton said the network continued to be stretched. This only became an issue when a component in the system was not working and there was not the excess capacity in the other components to carry the load.

He said network investments could last 50 years and the issue was to predict future demand and put in enough capacity to cope.

However, over capitalising added unnecessary costs onto lines charges.

It was hard to estimate the seasonal increase in demand because it was never a gradual increase and often it came in blocks (dairy factories, pumped irrigation schemes, etc), he said.

The commissioning of a new irrigation scheme could create a 30-40 megawatt increase in demand.

In the next two years the Timaru substation will need more transformer capacity to allow more power from the national grid to be transformed for domestic and commercial use.

Although there are two transformers, if both were operating above 50 per cent and one became unavailable, there would be less security of supply.

The Timaru substation upgrade is being discussed with Transpower, the substation owner, and is expected to cost between $10 million and $15 million.

Mr Skelton said it was too early to predict how the capital development may affect homeowners' line charges.

He said those who benefited most from the investment should carry more of the cost. The other aspect was that the assets had a long lifespan, so the cost recovery could be spread over a number of years .

"We also have to balance the costs over successive generations to make sure both present and future generations are paying their fair share.

The work was at the planning stage and it was too early to estimate line charge increases.

The next stage of network planning was looking further out. Like South Canterbury, North Otago's demand was also growing.

There was the possibility of a cement plant and further expansion at the Studholme dairy plant.

To ensure long term security of supply Alpine, Network Waitaki and Transpower were looking at future transmission capacity in the Waitaki Valley to meet the demand from industrial expansion.

He said at this level the transmission capacity requirements in the valley would need to be assessed by the Electricity Commission.

"We are about to put a case before the commission that this is the level of investment we believe needs to be made with the planned load coming on stream."

The process may require community input and support to ensure the commission understood the impact providing a safe, efficient and secure supply of electricity had on the region.

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