Rising EVs, batteries and solar require electricity distribution rules update

The Electricity Authority intends updating regulatory settings for distribution networks to better support the electricity sector’s transition to a low-emissions economy.

Distribution networks provide the infrastructure that connects electricity users with electricity producers. with electricity demand expected to increase substantially as New Zealand switches to electrification of transport and other carbon reduction measures.

Consumers will use more distributed energy resources (DER) such as solar panels, EVs and batteries and there will be more connections to the grid, a cost benefit analysis by Sapere estimating the potential benefits for DER to be around $7 billion during the next 30 years.

“We want to see empowered consumers taking control of their energy and participating in the electricity system in new ways,” Electricity Authority market policy general manager Andrew Doube says.

“For a successful transition to a low-emissions economy it is critical that services evolve to meet changing consumer needs.

“The system settings need to be right to allow innovation to occur and promote strong competition, so consumers get the services they want and need, at an affordable price.”

Using DER, households, businesses and industrial consumers will have more control of their energy use, the authority says.

Mass participation in the industry means there will be more buyers and more sellers of electricity and related services. New and existing suppliers will need to compete to win customers by offering innovative products and services that reflect consumer preferences.

“Together with industry, we need to look at the regulatory settings governing distribution networks, to make sure there are no barriers to maximising the benefits that DER can bring consumers and fully enable the sector’s transition to a low-emissions future,” Doube explains.

In addition to the innovation and competition issues around DER, the authority will also look at other issues that have previously been raised by participants such as access to information, more efficient price signals, and reliability challenges arising from managing two-way power flows on distribution networks.

A discussion paper Updating the Regulatory Settings for Distribution Networks is on the authority’s website and it wants to talk with as many participants as possible to gain better clarity around the issues identified and potential regulatory options.

In it, authority chair Dr Nicki Crauford says Government aims to reach net zero emissions by 2050 and 100% renewable electricity generation by 2030 are ambitious with the accelerated pace of change required to meet this target unprecedented and difficult to navigate.

“To support increased electrification of heat and transport we will see a rate of energy infrastructure investment not seen before in this country – including new renewable generation, and transmission and distribution network infrastructure. But we can’t just build our way to 100% renewables. It’s too expensive and will take too long.”

Crauford says the key to a successful and affordable transition is efficient investment in new generation and innovation to drive participation and creative local solutions.

“Distributors are at the centre of this.”

Feedback on the document closes on September 14 at 5pm.

After assessing all stakeholder feedback, preferred options will be identified and released for consultation.

Email distribution.feedback@ea.govt.nz to register interest in a workshop or to talk with the project team.