We commissioned Sapere to model what electricity demand peaks might look like for Aotearoa up to 2050. Using Climate Change Commission forecasts and data from the Electricity Authority and lines companies, the research sets out three scenarios: naïve; energy-optimised; and network-optimised.
Here’s what the report shows:
- Naïve scenario: This is the 'do nothing’ scenario where EVs, hot water heaters, and other discretionary loads operate whenever users turn them on, leading to severe peaks in demand and making network upgrades unavoidable.
- Energy-optimised scenario: In this scenario, energy traders (like retailers, generators and aggregators) manage loads to minimise the cost of purchasing in the wholesale market or to optimise revenue opportunities. This may not align with peak network demand times, leading to local infrastructure strain.
- Network-optimised scenario: In this scenario, EV charging and other flexible loads are managed to avoid peak times on a local network level. This approach distributes demand more evenly, significantly reducing the need for costly upgrades on distribution networks.
The research found that EV charging represents the biggest new challenge for managing demand on the grid — but also the biggest opportunity to make impactful changes through 'smart charging.' Other uses, like water heating and commercial cooling, also contribute to peak demand, but their impact is much smaller compared to EVs.
Read the report here: Modelling peak electricity demand to 2050.
While producing this report, Sapere developed an Excel-based model so that lines companies can generate demand projections in their area. Training on how to use the model was done in 2024. If lines companies need to access the model and training material, please email info@electricity.org.nz.
Why we need change
To help smooth out demand peaks, we need incentives (like time-of-use pricing), better consumer education and stronger trust with customers. But none of this can happen without the right policies and legal frameworks in place.
It’s a complex challenge and finding solutions — with genuine input from the right people — will take time. But, if we don’t start these conversations now, we're going to run out of time and reliable electricity for everyone in Aotearoa will be at risk.
We need the energy industry, government and consumers working together to find the best way to offer flexibility so we can move demand peaks. The outcome needs to make electricity more affordable, more reliable and more sustainable. Balancing these things is crucial.
What ENA is doing to help manage growing demand
Here are a few things we are focussed on right now:
A common load management protocol
We recognise the growing role of electricity retailers in managing consumer loads directly. Through the Future Networks Forum, we’re working with retailers to develop a standard way for them to manage load to avoid and manage network and grid emergencies. It will cover things like hot water and EV chargers. Having different rules around the country would make things complex for retailers and the system operator — and risky for consumers. A consistent approach will help keep the lights on as we collectively deliver new services to New Zealanders.
Lines companies have created a draft and we’re now working with retailers to make sure the solution works for everyone — especially consumers.
Setting up for flexibility
Another project within the Future Networks Forum is working to determine what new capability, roles, functions, and industry architecture we need to enable flexibility here in Aotearoa. If we get this right, it will not only benefit consumers who own the distributed energy resources (like EV charges, solar panels and battery systems) but all electricity consumers as they won’t have to pay for the lines companies to build more capacity into our current network.
We’ve combined international research with insights from local lines companies and are now looking at industry models for distribution system operation (DSO). We’re working closely with Transpower (as the Systems Operator) and expect to publish a public report by April. The timing of this report will provide detailed food-for-thought that can be considered alongside the Electricity Authority’s next consultation on Future System Operation (FSO).
Advocating for ‘smart’ EV charging regulations
ENA will continue to advocate for new regulations to help shift home EV charging away from network peaks when electricity demand is highest. If we don’t regulate now, we will need to spend extraordinary amounts of money to build more capacity in our lines. We were pleased to see Cabinet proposing new flexibility requirements for energy products and services. We'll keep an eye on this and share updates when the Bill is introduced.
Better access to smart meter data
Lines companies urgently need easier and cheaper access to smart meter data. This data is key to lines companies offering flexibility services. It would help lines companies to manage peaks and allow customers to use electricity at off-peak times — like charging EVs or heating water overnight — when power is cheaper.
Right now, accessing that data is extremely expensive. If lines companies pay those high costs, they’ll have to pass them on to consumers. That’s ridiculous. Why should consumers pay extra for lines companies to access consumer data — especially when we’re trying to make electricity more affordable?
We’ll keep advocating for change with regulators and the wider sector.
Want to kōrero?
If you’re interested in talking about any of this mahi, get in touch with us at info@electricity.org.nz