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Speaker 1: So says we head into another winter with a mild

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Speaker 1: panic over power supply. What about a cable that links Australia.

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Speaker 1: It plans a green construction would take four years apparently

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Speaker 1: and be completed by twenty thirty two. Tes Link co

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Speaker 1: director Richard homewoods with us on this Richard morning to you.

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Speaker 2: Good morning, Mike.

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Speaker 1: Is it real?

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Speaker 2: It's real? Mate? Absolutely?

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Speaker 1: Okay, So you just plug it and here plug it

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Speaker 1: in there, and.

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Speaker 2: Bob's your uncle that's slowly more involved, but you're getting

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Speaker 2: the idea.

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Speaker 1: So what do you need? Green light wise? And who

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Speaker 1: says go for it?

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Speaker 2: Yes? So for us, the green light we're announcing today

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Speaker 2: is that we've been doing R and D for the

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Speaker 2: last two and a half years with a team of

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Speaker 2: global HBDC experts and one of the biggest manufacturers in

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Speaker 2: the world, primarily to ensure that we can lay the

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Speaker 2: cable at the required depth and distance, and we've kind

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Speaker 2: of now reached that point that we're confident it can

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Speaker 2: go ahead. So that's a big green light we're announcing today.

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Speaker 1: Who would own it?

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Speaker 2: Fundamentally from an ownership perspective, our focus has always been

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Speaker 2: on making sure the cable can work its own face.

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Speaker 2: We're not going out and asking for government funding, but

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Speaker 2: we are aware of the fact that it will become

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Speaker 2: a very integral and important part of both electricity markets,

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Speaker 2: and there may be some desire for government ownership potentially

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Speaker 2: on one side or the other. But again we're not

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Speaker 2: going out and asking for that. We're making sure it

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Speaker 2: just stands on the zone two feet.

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Speaker 1: And you would expect the power industry to buy into

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Speaker 1: that and make themselves available or the cable would become

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Speaker 1: available to them.

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Speaker 2: Yeah. So the way from a power industry perspective, we've

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Speaker 2: obviously engaged substantially with AMO on the Australian side and

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Speaker 2: Transpower on the New Zealand side, and as well as

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Speaker 2: the Electricity Authority over here too, and by all accounts,

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Speaker 2: they simply will see us as a generator and also

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Speaker 2: a load and so there's nothing in terms of market

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Speaker 2: integration that's the show stopper. But of course they would

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Speaker 2: start to need to consider one another in their day

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Speaker 2: to day operations and really start off running as one

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Speaker 2: transasman market.

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Speaker 1: How would any of them individually take what they had

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Speaker 1: by way of power and stick it in that cable.

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Speaker 2: So the way the electricity market works in New Zealand

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Speaker 2: is all generators sell on to a sort of open

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Speaker 2: spot market and so regardless whether they have or a

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Speaker 2: gentilea or if they have other trading arrangements, everything in

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Speaker 2: New Zealand clears through a central market. So fundamentally, all

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Speaker 2: we're doing is buying in one market and selling another

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Speaker 2: or vice versa, depending on which way the electricity is flowing.

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Speaker 1: Okay, and in that given our current situation in New Zealand,

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Speaker 1: we don't have any spare capacity, so it wouldn't be

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Speaker 1: flowing into Australia. Would a lot flow from Australia to

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Speaker 1: New Zealand, And if that was the way it happened,

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Speaker 1: is that a problem.

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Speaker 2: So it's definitely going to be flowing both ways. We've

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Speaker 2: obviously done substantial modeling on this. There has the time

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Speaker 2: in terms from a day to day perspective, New Zealand

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Speaker 2: has a morning peak followed by Australia, followed by New

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Speaker 2: Zealand's evening peak and followed by Australia. So what we've

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Speaker 2: modeled is there will be sort of day to day

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Speaker 2: trade between the two markets between the peaks. But also

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Speaker 2: separately to that you mentioned earlier about the winter problem,

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Speaker 2: and you're totally right. New Zealand also has a seasonal

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Speaker 2: peak issue with winter, particularly cold mornings and evenings. On

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Speaker 2: the other hand, Australia has the opposite problem. They actually

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Speaker 2: have a hot summer day peak issue. All their adages

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Speaker 2: happen when they get those stinking hot foy degree days

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Speaker 2: and that's typically when we have surplus power. And whilst

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Speaker 2: you wouldn't believe it, there are periods in time where

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Speaker 2: New Zealand actually gets very low power prices, close to zero,

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Speaker 2: and so those periods do occur. But on the other hand,

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Speaker 2: Australia has a massive surplus of daytime renewables and has

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Speaker 2: a big problem with negative daytime power prices, which is

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Speaker 2: obviously an opportunity for New Zealand to benefit from.

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Speaker 1: Wrap a word around this, is this a game changer?

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Speaker 1: Quite interesting, a moderate improvement what.

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Speaker 2: It will be the largest single game changer to the

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Speaker 2: New Zealand market and also a very meaningful positive change

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Speaker 2: on the Australian side, less so the New Zealand but

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Speaker 2: nonetheless still very significant.

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Speaker 1: Fantastic, Go well with it, and we'll stay in touch

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Speaker 1: with Richard Homewood who's with tes link

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