By Stephen Wright

WELLINGTON, New Zealand--The operator of New Zealand's electricity grid said an upgrade of the South Island networks could be completed by May 2022, allowing surplus power to be moved north.

State-owned Transpower New Zealand Ltd. had previously delayed completion of the work by a year until mid-2023. It is now accelerating the upgrade after a South Island aluminum smelter, which consumes about 13% of New Zealand's electricity, said it would cease operating in the second half of next year.

The feasibility of further speeding up the network upgrade will be assessed as work progresses, Transpower said Thursday. That could lead to a "slightly earlier" completion date, it said.

News last month that the smelter, which is supplied by Meridian Energy Ltd., would close sent a shockwave through New Zealand's electricity industry.

Analysts said the surplus electricity could speed up electrification of transport and industrial processes. It may also force power generators such as Contact Energy Ltd. and Genesis Energy Ltd. to shelve plans for new generating capacity. 



  Write to Stephen Wright at stephen.wright@wsj.com