A Hawke’s Bay farm is taking part in a world-first pilot which allows customers to contract with more than one electricity supplier at a single location.
The pilot of an innovation called multiple trading relationships (MTR), has been enabled by New Zealand’s future energy centre, Ara Ake.
It aims to introduce more competition into the electricity sector, making electricity cheaper for customers, helping reduce energy hardship and allowing for a greater uptake of low emission technologies, such as solar.
“We set up Ara Ake to drive innovation and a different way of doing things in our energy sector. This Multiple Trading Relationships scheme is a great example of this. By bringing in more competition into the energy sector, distributed energy resources can be shared more widely, which will ultimately help bring down costs,” says Dr Megan Woods, Minister of Energy and Resources.
“Cheaper electricity, fairly priced power bills, more choice for consumers, lower emissions, and radically reduced energy hardship are exactly the outcomes we as a Government are trying to achieve, so it’s great to see this world-first pilot taking aim at these objectives,” said Megan Woods.
Hawke’s Bay farmer Greg Wilson has five electricity connection points across his farm as well as two solar installations, an 8 kW array on his home and a large 50 kW array on his farm. Greg would like to share surplus electricity from his solar installations with others in the community who are using different energy retailers, including connection points on his own farm.
MTR will allow him to do just that.
“I’ve always been interested in solar power, and I’m looking forward to being able to use the excess electricity to power different areas of my farm, including my family home, my mother-in-law’s home, and the irrigation pump,” Mr Wilson says.
Ara Ake Chief Executive, Dr Cristiano Marantes, says New Zealand has started its journey to decarbonisation and Ara Ake’s role is to accelerate innovation in the energy sector.
“Achieving our goals for a low emissions future won’t be possible unless customers are put at the centre of this transition. MTR is the type of energy innovation which does exactly that – it’s the Uber or Netflix of the electricity world.”
“As well as adopting innovation that helps us decarbonise, the MTR scheme also has the potential to alleviate energy hardship for those most in need – an outcome that would be invaluable to our nation,” says Dr Marantes.
With the support of the Electricity Authority, Ara Ake is coordinating an off-market pilot to demonstrate the benefits of MTR, which is currently not allowed for under the Electricity Participation Code (the Code). The pilot will evaluate if MTR is sufficiently valuable (i.e., demonstrates long term benefit for electricity customers, and commercial prospects of new business models) to justify a change of the Code. Additionally, this pilot will provide insights as to any risks and constraints that may impact negatively on the electricity market if MTR was allowed for under the Code.
Electricity Retailers, Our Energy and Flick Electric, are providing the services to progress the off-market demonstration.
John Campbell, founder of Our Energy, says “It’s great to get a real-world demonstration underway and we hope this is the beginning of a more accessible model for local and community energy trading.”
“There are many opportunities to explore this innovative concept further, and we look forward to working with Ara Ake on these so we can enable our communities to have a sustainable future,” Mr Campbell says.
Flick Electric’s Head of Customer Service, Craig Ironside, hopes the MTR pilot will demonstrate benefits, not only for their customers but, all New Zealanders.
“The desired outcome of this pilot is to gain a better understanding of the benefits for our customers and having a farm with five different connection points will provide us with this insight, as well as commercial prospects for new business models,” says Mr Ironside.
Ara Ake has received many enquiries about the project – from New Zealand electricity retailers through to UK regulators wanting to know more about the pilot
“We’re proud that Ara Ake has been able to test this exciting world-first pilot in Aotearoa,” Dr Marantes says.
Other case studies within the MTR pilot include a company who is planning to provide its excess solar with its employees to help reduce their household power bills, a marae wanting to share excess solar energy with local houses in the papakāinga, and Kāinga Ora exploring ways to share energy between their customers helping to reduce energy hardship and emissions.
First published by Ara Ake 10 May 2022