Graeme Weston

New Zealand’s electricity system is heavily dependent on hydro lakes, which normally provide close to 60% of total annual generation. However, storage is shallow (typically only 6 to 8 weeks) and this exposes the country to significant risk in a dry hydro year. When inflows are low, gas and coal plants are ramped up to secure supply, leading to higher emissions and volatile wholesale prices.

Meanwhile, Australia’s National Electricity Market (NEM) is experiencing record levels of renewable curtailment. On 15 September 2025, a new record was set as solar and wind output exceeded demand during the day, forcing large volumes of generation offline. Much of this surplus arises around midday when rooftop PV dominates demand and utility-scale solar and wind compete for limited export and storage opportunities.

The proposed Taslink project—an HVDC interconnection between northern New Zealand and eastern Australia—has been floated by Far North Solar founders as a 2–3 GW subsea cable. If such a link were operational, it could transmit otherwise curtailed Australian renewable electricity to New Zealand. Assuming 3 GW of transfer and only partial-day utilisation, the annual import potential ranges between 1.1 and 3.6 terawatt hours (TWh). This compares directly with the estimated 1–5 TWh requirement often cited as necessary to cover New Zealand’s dry-year security gap.

At a purchase price of one cent per kilowatt hour, the imported energy would be significantly cheaper than burning gas or coal. Even after accounting for HVDC transmission losses (5–8%) and tariffs, the delivered cost would remain attractive. The critical system benefit is not only low cost but the ability to conserve hydro storage. By importing during daytime curtailment periods, New Zealand could back off hydro generation, saving water for evening peaks and winter cold snaps. This effectively turns the hydro system into a large-scale seasonal battery.

Taslink therefore presents a credible pathway to reduce fossil fuel reliance, cut emissions, and increase security of supply during dry years. The main challenges lie in financing (private), consenting (government), and ensuring market structures (government) allow imported energy to directly displace hydro dispatch in order to maximise its value.