Project information
Project overview
This is a programme to support Powerco's transformation from a distribution network operator (DNO) to a distribution system operator (DSO). It consists of multiple workstreams, all targeted at building the capacity required to operate as a DSO. The three main focus areas are:
- developing a deeper network and customer understanding to enable optimal customer-focused decision-making
- enabling and supporting products and markets that allow customers to define their relationship with energy
- achieving a dynamically operated, stable and reliable network.
Innovation challenge or opportunity
Transforming a traditional electricity lines business from a DNO to a DSO requires capabilities and ways of working that have not yet been implemented in New Zealand. The major learnings from the proposed programme will be around how a DSO model can be established in New Zealand, what associated business change is required for success, and what DSO shape works best in the New Zealand context. At the same time, Powerco is developing capabilities to support flexibility services and flexible connections to become an integral part of a dynamically operated network.
Desired outcomes and customer benefits
Anticipated business outcomes include:
- a range of flexibility service products, to supplement traditional network solutions
- a suite of flexible connection options that will help speed up and minimise connection cost to customers
- enhancing the data and digital platform and tools required for a functioning DSO
- increasing visibility of network constraints and capacity to a granular, near real-time basis
- deep understanding of the value customers place on reliability, energy flexibility, and participation in energy markets
- substantially improved network utilisation
Customer benefits will include:
- lowest realistic network cost while maintaining required reliability levels
- supporting the integration of distributed energy resources and through that, supporting decarbonisation
- seeking optimal customer connection options, considering available network capacity, customer demand flexibility and optimal energy solutions
- enhanced network resilience by accessing distributed energy resources to complement grid-supplied services.
Upcoming milestones
The DSO programme is made up from multiple initiatives, as described in the INTSA application. Powerco will regularly report progress updates not only against the overall DSO programme, but also against these individual initiatives. This will be shared with the regulators, flex service providers, ENA and other interested parties. Overall implementation is planned to be complete by the third quarter of 2028, although further enhancements and new developments will be anticipated and ongoing.
Progress made
The overall programme has been running since mid 2024 and several discrete work-packages have already been completed, for example, the development of a LV visibility platform, issuing a first tranche of flexibility services options and collaborating with other EDBs on a flexibility market platform. A lot of research and internal development work have also been completed.
The current programme is a continuation of that work and is foreseen to run over two years (with more details in the INTSA application).
Key insights and lessons learned
There is substantial opportunity and enthusiasm for incorporating flexibility services into lines companies suite of network solutions, both internally and from external flex service providers. However, introducing flexibility as a standard way of working, either through pricing or contracts, is not straightforward and requires considerable process and system change, as well as internal change management.
