Plugged In

Kiwi considerations:

Technologies such as artificial intelligence could play a key role in the optimisation of the grid, load shifting, and the delivery of affordable, reliable, and sustainable energy can be achieved through the use of technologies such as artificial intelligence. The issue of load shifting in New Zealand has been in the spotlight lately, especially with recent reports of peak time shortfalls as the country experiences the first cold snaps of winter.

Increasing automation in New Zealand's energy system can reduce the need for manual intervention and help address workforce gaps, leading to lower operating costs and more affordable power.

KPMG Australia's research suggests that many utilities have a "hidden debt" of low productivity among their workforce, which technology can improve by transforming processes and service delivery models. This recognition is also starting to emerge in New Zealand, with utilities companies seeking to future-proof their operating models and reduce inefficiencies (as evidenced by Genesis's new operating model which may cut 200 jobs¹).

Although AI will play a crucial role, the sector will also face the challenge of dealing with technology debt caused by legacy systems, and ensuring they can keep pace with the advancements in technologies.

Kiwi considerations:

Smart grids will play a crucial role in New Zealand's efforts to tackle the challenges posed by peak energy demand, which are expected to intensify with the increasing adoption of electric vehicles and electrification in general. It is recognised that addressing these challenges cannot solely rely on the supply side, and the ability to shift demand will be essential.

While major electricity consumers like the Tiwai aluminium smelter and NZ Steel already engage in demand side shifting, the implementation of smart grids will enable retail consumers to actively participate in the energy ecosystem as well.

The Energy Efficiency & Conservation Authority (EECA)’s recent Electrifying Aotearoa report² found that nearly 8 in 10 people on off-peak energy plans change their power use to reap the benefit of lower costs, but only 30% of all participants were aware of off-peak plans and were enjoying the benefits of lower costs at different times of the day.

EECA’s research finds that awareness is high, but there are still barriers to wider adoption of smart grid technology. As appliances are replaced with smarter alternatives, regular consumers will have greater opportunities to shift electricity usage to periods when electricity is more readily available, cheaper, and environmentally sustainable.

Kiwi considerations:

New Zealand’s distribution and transmission networks are signalling high investment needs to serve an increasingly renewable energy sector. Balancing the trilemma to a more sustainable system requires careful management of these costs against the challenges that intermittent renewable generation creates for energy security.

Bringing down investment costs will be key, and the Fast-Track Amendment Bill may help to cut consenting red tape. There are however many procedural considerations to define the eligible projects and ensure selected projects are not subject to the risk of judicial review. Through the submissions process, industry has called for greater clarity around whether reconsenting projects will be included and concerns around the ministerial decisions differing from the expert panel recommendation being open to appeal.

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Our country's isolation makes it necessary for us to find solutions on our own, as we cannot rely on other nations who have more options available to them. One such challenge is the lack of connectivity for importing electricity and transition fuels like gas. In fact, New Zealand, along with Iceland, is the only OECD country without a gas import or export connection. This lack of connectivity means we have a smaller safety net, which emphasises the importance of leading in the adoption of these technologies, we may not be able to afford to be a late adopter.