Sept 9 (Reuters) - Transpower said on Tuesday it had applied to New Zealand's Commerce Commission for approval of its NZ$1.1 billion (US$653.40 million) plan to upgrade the high voltage direct current (HVDC) electricity link between the country's North and South Islands.

The project involves replacing three aging submarine electricity cables, adding a fourth cable to boost transfer capacity and constructing new cable termination stations on both sides of Cook Strait.

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The decision follows surveys indicating the cables are deteriorating as expected and will need replacement by the early 2030s.

"Moving ahead with this critical infrastructure project means Kiwis can continue to access the lowest cost electricity generated across both islands," CEO James Kilty said.

He added that the initiative would support competition among electricity generators and exert downward pressure on power prices.

The HVDC link , opens new tab, operational since 1965, is a cornerstone of New Zealand's electricity system, ensuring reliable and stable power supply across the country.

The state-owned entity expects the upgraded link will play a greater role in balancing the variable electricity output from solar and wind farms, enabling the transfer of power generated by hydro stations, thermal backup plants and batteries to communities and businesses.

The proposal, involving stakeholders such as major industrial power users, local lines companies, electricity generation firms and retailers, will be reviewed by the Commerce Commission, the company said.

Additionally, Transpower plans to seek approval in 2026 for a related project to replace the system controlling electricity flow.

($1 = 1.6835 New Zealand dollars)

https://www.reuters.com/business/energy/new-zealands-transpower-plans-653-million-upgrade-key-north-south-islands-power-2025-09-09/