Part 5: Network adaptability

Managing the assets that distribute electricity.

In this Part, we discuss what plans are in place to accommodate changing technologies.

Planning to accommodate technology changes

Examples of emerging technologies in the energy sector include:

  • solar power and batteries;
  • infrastructure for electric cars; and
  • standby generators.

Emerging technologies could have two main effects on how the electricity industry operates in the future. First, new technologies could be disruptive to an established network because they would make managing a network from a centrally managed unified model to a distributed model more complicated.23 For example, even if there is high solar power uptake by consumers, companies must still provide for peak load demand in their networks. The second effect is on the wider business. If consumers have more choices, then companies will have to consider what non-network tools and services they will provide. We expected the three companies to:

  • have adopted strategies to accommodate, manage, or encourage the uptake of emerging technologies; and
  • put in place any infrastructure or trial projects to assist in the uptake of emerging technologies.

The three companies are in locations where consumers are used to a traditional power supply. However, the three companies are aware of the types and nature of emerging technologies that could affect their businesses. The main elements of emerging technologies are the increasing use of solar power and batteries. There is a steady increase in the number of consumers using solar power, although this is from a low base. The companies are predicting that solar power use will not increase greatly in the next 10 years.

Electricity distribution businesses have been working together to respond to the emergence of new technologies. For example, they sponsor the Smart Grid Forum,24 which has examined the effect of emerging technologies. The Electricity Networks Association has carried out modelling to examine how electricity networks would be affected by new technologies.

The three companies are monitoring emerging technologies and acknowledge that, at some point, solar power and other technologies will be used more widely. However, they do not believe that solar power is economically viable at present.

Each company has been trialling emerging technologies. Alpine and Unison have installed solar panels and charging stations for electric vehicles. Waipa is planning a pilot project on solar and battery technology for a typical home. Alpine is also considering emerging technologies for a proposed high-power-demand dairy farm at the end of a lesser-strength distribution line. This could avoid or defer a costly investment in a new distribution line.

There are risks with emerging technologies. If the adoption of emerging technologies is faster than expected, the three companies may not have made the changes needed to their networks in time. This could lead to unexpected costs to quickly upgrade their networks. Scenario modelling done previously might need to be regularly reviewed as the pace of technological change continues to increase.

To address this risk, we encourage the three companies to continue working with others in the industry to prepare long-term technology scenarios and prepare responses to each scenario.

23: In a distributed model, each consumer with solar power could potentially supply electricity to the network. With many more points of supply, the networks become more complex because the electricity distribution businesses cannot easily control all of these points.

24: The Smart Grid Forum is made up of industry representatives, consumers, and other interested stakeholders.