Distributed energy resources (DER) are an exciting development in the New Zealand electricity sector because it enables both residential houses and businesses who generate their own electricity to distribute it back into the network (typically locally), and for consumers to shift their electricity usage to non-peak times.
Common forms of distributed energy resources are small scale generation such as solar, electric vehicles (EVs)/charge point stations, batteries, and heat pumps.
With the right oversight and capability, distributed energy resources can provide several benefits for New Zealanders and the wider electricity market. It is also expected to play an important role in the electrification journey Aotearoa has embarked on.
In our 2020 Whakamana i te Mauri Hiko paper, one of our projections estimated that by 2035 there will be 3.9 million distributed energy resources deployed across Aotearoa, with major contributions from smart appliances and smart EV charging. DERs deployed on this scale opens huge opportunities for ‘demand-side management’ whereby electricity demand can be temporarily reduced to manage morning and evening peaks - a unique challenge in New Zealand because of our high renewable generation base.
To facilitate meaningful peak reduction from DERs, some infrastructure will be needed. However, the modest cost of establishing DER markets for Aotearoa are likely to realise disproportionate benefits by:
- Avoiding unnecessary investment in peaking generation (typically gas-fired)
- Deferral of transmission and distribution investments
- Enabling congestion management on electricity networks
- Encouraging renewable generation through providing the demand-side flexibility required to firm intermittent energy (wind and solar)
- Encouraging consumer investment in renewable solar and battery systems
- Encouraging electrification through enabling the full demand-side value of assets such as process heaters and batteries (including those in EVs) to be realised
- Enabling efficient integration of DER into the electricity system
Transpower has developed the FlexPointTM system to help manage Distributed Energy Resources.
Find out more:
- Distributed Energy Resources (DER) Report – Understanding the potential (PDF)
- Transpower's approach to seeking alternative solutions for transmission investments
- Innovation and Participation Advisory Group (IPAG) presentation (ZIP)
- Transpower's Electrification Roadmap
- Electricity Networks Association's Network Transformation Roadmap.