Prysmian Signs Agreement to Replace New Zealand's Inter-Island HVDC Cables
Prysmian, a global leader in cable solutions, has secured a contract from Transpower to replace the Inter-Island HVDC submarine cables linking New Zealand's North and South Islands.
The agreement, announced in December 2024, involves a capacity reservation of approximately €250 million (about $450 million NZD). The project will see the replacement of the existing cables that are nearing the end of their 40-year lifespan, with the new infrastructure expected to safeguard inter-island power transfer for another four decades.
The new 350kV cables will cross the Cook Strait and allow a higher power transfer, increasing the capacity of the HVDC link from the existing 1200 MW to 1400 MW. The upgrade will align the cables' capacity with that of the Pole 2 and Pole 3 converters at Haywards and Benmore substations.
The replacement project is scheduled for installation in 2031 and commissioning in 2032. Prysmian will manufacture the cables at its facility in Arco Felice, Italy before transporting them to New Zealand using one of their specialized cable-laying vessels.
This capacity reservation agreement can be considered a key milestone for Transpower; the global demand for submarine HVDC cables has surged dramatically. This has led to significant supply constraints in the industry, and with major HVDC projects often securing years of production capacity in advance, the market is tightening further.
For instance, cable manufacturers are reporting backlogs of over 12 years, with most production capacity fully booked until the late 2020s. With just three European companies - [NKT (Denmark), Prysmian (Italy), and Nexans (France)] serving 75% of the HVDC cable market, the rapid ramp-up of manufacturing capacity to meet demand is proving challenging.
Adding to those challenges is the limited availability of specialized vessels capable of installing these cables in deep waters, such as the 250m deep seafloor of New Zealand's Cook Strait.
Nevertheless, this capacity reservation agreement and resulting final contract - expected 2026 - will not only enhance New Zealand's energy security but also contribute to the country's renewable energy goals by providing the flexibility needed to integrate more intermittent power sources like wind and solar into the grid. The Inter-Island HVDC link is a key asset for Transpower, playing a vital role in managing power distribution during peak demand periods and in dry years when hydro resources are limited.
Transpower plans to conduct further consultations with the electricity industry in the first half of 2025, followed by seeking regulatory approval from the Commerce Commission. This process aims to ensure that the investment meets the country's needs and provides value for New Zealanders.
