A fleet of "hydro ships" anchored around Fiordland could generate more than 100 megawatts (MW) of electricity, enough to power a city the size of Timaru.

The idea from across the Tasman is one Australian's view of how New Zealand could resolve the lack of new South Island generation scheduled to come on stream in the next five or so years.

Sydney IT analyst Dean Detheridge, who studied electrical engineering for five years and admits to being "infatuated" with hydro power, drew up the plan in response to Transpower's recent call for alternatives that may delay or replace the need for its planned $400 million upgrade of transmission lines into Christchurch and the upper South Island.

The national grid company says the revamp is crucial to ensure supply can meet growing demand by about 2012. But others, including generator and retailer Meridian Energy, believe there could be blackouts before then.

Detheridge told BusinessDay he had travelled around Fiordland, the wettest part of New Zealand, and thought it would be the ideal location for what he calls his "hydro-generation ships".

The ships, about 70m long -- "the size of the Manly ferries" -- would be anchored in inlets and fiords close to natural or built dams high up the mountainsides.

Water would be fed from the dam down to turbines on the ship. The electricity generated would then be sent from the ship by underwater cables to a connection point onshore and into the existing transmission grid.

Each ship would probably be capable of generating tens of megawatts of electricity and could be built and fitted out for less than $10 million, Detheridge estimated.

"The cost of producing such a ship would be significantly less than a conventional power station in such a remote location.

"If the time frame of the overall project was not critical, the ship could be built as the first phase of the project and serve as a supply ship while the pipeline and dam were being built."

He had read about power station ships that generated electricity by burning diesel but thought that would not be appropriate somewhere like Fiordland. Then he thought about the feasibility of hydro ships.

"I love hydro. It was a slow time at work and I was just reading about hydro and I stumbled on that request for information (RFI) from Transpower. I thought, `Gee, they're actually asking people for information, that's brilliant'."

Detheridge said he had not heard back from Transpower yet.

Transpower received 27 submissions to its RFI, which spokesman Chris Roberts said were now being reviewed.

A shortlist of options would be drawn up by August.

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