Transpower issue paper on energy storage adoption in New Zealand


The whitepaper, Battery Energy Storage in New Zealand, comprises investigations which Transpower conducted on the benefits of battery energy storage systems for the country’s grid system and utility operations.

Transpower says the paper is a compilation of results achieved in pilots conducted to understand the cost, benefits, regulatory, technical and commercial implications of battery energy storage systems before mass adoption at both grid-scale and distributed models.

According to the Transpower findings:

  • Batteries offer greater value when they are located closer to the end consumer, where there is the potential to provide a range of services both for the owner directly and upstream to the whole network.
  • The value of these services is unlikely to be realised by the consumer until the appropriate market pricing and payment structures, systems and tools are available.
  • The value of each service at different places in the electricity supply chain varies widely across the country and within individual networks.
  • Grid-connected batteries are not presently economic and the company considers these are unlikely to be so before 2022.
  • Distribution-connected or community-scale batteries are expected to be economic from 2020.
  • Some specific commercial or industrial end-consumer battery applications are economic now. The case for these would be further strengthened if Time-of-Use lines charging, combined with full open access to all market energy services, were available.

Following the pilots, Transpower concludes that there is a need for market and policy reforms to unlock the full value of battery energy storage systems.

The energy transmission system operator says energy storage would enable energy generation infrastructure to be located close to energy consumers, a development which would help reduce utilities’ operational expenses and ensure consumer energy bills remain affordable.

At the same time, the development would help New Zealand to expand its clean energy portfolio and reduce carbon emissions.

To date, the island produces 58% of its energy from hydro, 11% from geothermal and 8% from wind sources which are located far away from end-users.

In addition, increased adoption of battery energy storage would enable frequency regulation, voltage support, transmission congestion relief, transmission and distribution deferral, time of use energy bill management, demand charge reduction, increased PV self-consumption and backup power during outages. [New Zealand multi-utility partners with Landis+Gyr for AMI rollout].

The energy transmission system operator says it will continue to partner with early adopters of energy storage systems to implement demand response programmes to stabilise grid network during peak demands and accelerate the adoption of distributed energy storage systems.


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