Source: Radio New Zealand
One of the most significant options was shifting electricity use away from peak times, the agencies wrote. File photo. RNZ / Russell Palmer
The agencies governing energy use in New Zealand are urging lines companies are being urged to consider flexible pricing and other ‘non-network’ solutions instead of building more powerlines and poles.
In an open letter published today, the Commerce Commission, the Electricity Authority and the Energy Efficiency and Conservation Authority (EECA) said doing so could reduce the cost for consumers and improve the performance of the electricity system.
The letter, sent to electricity distributors across the country, warned the country’s electricity system was “changing rapidly”.
“Renewable generation is growing, bringing greater variability and intermittency,” the agencies wrote.
“At the same time, overall demand is projected to rise as gas supply declines, transport electrifies, and more industrial and commercial processes transition to electric technologies.”
New Zealand’s electricity demands will grow by 35-82 percent by 2050, the Ministry of Business, Innovation and Employment estimated last year.
Investment in distribution infrastructure needed long lead times and was “slow and costly to change once initiated”, the letter said.
“Non‑network solutions offer significant, quantifiable potential to reduce costs and defer network upgrades.”
They could also buy more time before distributors committed to major upgrades, and allow network owners to improve their forecasting of demand and usage.
One of the most significant options was shifting electricity use away from peak times, the agencies wrote.
At the moment, New Zealand’s electricity network is built to handle peak demand, which only occurs a few times a day for short intervals.
A recent report published by EECA found that nearly 2 gigawatts of power being used at peak hours could be shifted off-peak, saving the country up to $3 billion in infrastructure costs.
The technology to do was was increasingly available, the letter said.
“New distributed energy resources (DER), including solar, batteries and smart, controllable devices, are becoming more affordable and more widely deployed.”
Some progress, but not enough
Electricity Authority networks general manager Tim Sparks said the three regulators wanted to give lines companies “a nudge” to think beyond more poles and wires.
“We’re concerned that the distributors are not consistently considering non-network solutions, even though we all know these options can improve efficiency and reduce long-term costs for consumers.”
There was “real untapped potential” but limited progress to date, Spark said.
“Some distributors have begun to move into this area, and they have experimented with trying non-network solutions, but they’re not doing it consistently, and not all of them are doing it.”
Non-network solutions included anything that took pressure off the network by either using less electricity, or shifting use to different times to spread the load more evenly, he said.
“It could include things like smart devices in homes and businesses, like EV chargers, rooftop solar and batteries, controlled hot water cylinders.”
Price flexibility was a “critical” part of the solution, the letter said.
Sparks said some distributors already offered lower off-peak pricing, or an ‘hour of power’-style deal, but that could go even further.
“You can also get controlled load pricing, for example, where consumers can sign up to get a lower price for allowing some of their key demand to be controlled remotely.
“The consumer may not even notice it, but the hot water cylinder can be used to shift demand and reduce pressure on the system.”
Ripple control, which was already used in some locations for electric hot water cylinders, was one type of controlled load shifting, he said.
EECA chief executive Marcos Pelenur said there was other technology available that was “not even new” and went a step further.
“There are a number of technologies like home energy management systems that are two-way, they’re a bit more dynamic, and they can help manage not just a hot water cylinder.”
Pelenur said there were “some great examples” of work happening already, but it was patchy.
“There’s lots of interesting, good work to point to, but we would like to see it at-scale across the whole country,” he said.
“I would like to see all the distributors start their planning meetings by looking at these non-network solutions as the first thing they do for their plans around managing the networks.”
The letter also mentioned rooftop solar installations as a form of distributed energy that could reduce peak demand, and feed back into electricity networks.
Widespread subsidies have seen rooftop solar and battery installations skyrocket in Australia over the last 20 years.
No subsidies are available in New Zealand. Labour and the Greens campaigned on generous subsidies at the last election but the current government has not moved to implement anything similar.
Neither Sparks nor Pelenur would be drawn on whether a subsidy programme would help to drive uptake in New Zealand, saying it was outside their agencies’ scope.
However, Sparks said the Authority had made recent changes to reward rooftop solar owners who fed energy back into the network at peak times with negative charges or rebates.
“We’re [also] proposing to increase the amount they’re allowed to export. And that will allow the people with rooftop solar and batteries to contribute to the system, and also, of course, sell more electricity into the system and be rewarded for that.”
The Authority was still consulting on that proposal, he said.
Pelenur said the open letter invited feedback from distributors, which the agencies would consider and also present to the Ministry for Business, Information and Employment.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
