Niue's public works minister, Fisa Pihigia, disputes that the island's entire power system needs replacing, but he says the main cable around the island has to be upgraded.
The Niue Power Corporation's general manager, Speedo Hetutu, had said earlier that the system needed replacing as soon as possible after a recent power outage which lasted four days and affected half the island.
But Mr Pihigia says the diesel power station is now operating successfully following a fire last June.
He says the problem last week was with the island's main cable which needs to be replaced because it is over 30 years old.
Mr Pihigia says that will be a big challenge.
"It's a major one because, I don't know what the cost will be but there will be many kilometres of cables. It is going around the island, which is about 40 miles. So you see the huge problem replacing all those cables."
Mr Pihigia says the Niue Government has been in discussions with New Zealand Government officials about replacing the cable.