The AC systems on the South and North Islands of New Zealand were interconnected in 1965 by a 600 MW ±250 kV HVDC Inter-island Link. In 1992 the grid owner Transpower upgraded the HVDC link to 1,240 MW.
The existing link, with its mercury arc valves, was modified to operate in a bipolar "hybrid" scheme together with a new thyristor converter. The first stage of the upgrade was to add the 700 MW thyristor converter, and the second step was to operate the old and new equipment as a hybrid bipole rated 1,240 MW. The two mercury arc valve poles were connected in parallel to form an upgraded pole 1.
The 610-km long inter-island HVDC transmission system, between Benmore substation on the South Island and Haywards substation north of Wellington, balances energy distribution between the islands.
On average 80 per cent of New Zealand's electric energy production is from hydroelectric sources, mostly from the South Island, while the North Island accounts for almost two thirds of total electricity demand, with a peak load nearly double that of the South Island. After the HVDC transmission upgrade, up to 25 per cent of the North Island's electricity demand is met by South Island hydro capacity.
The line encourages further development of renewable generation like wind and hydro, often located far from load centers. It gives the South Island access to the North Island’s gas and coal generation, which is important for the South Island during dry winter and summer periods. It provides the North Island with access to the South Island’s plentifull hydro generation, important for the North Island during peak winter periods.