Smart New Zealand Energy Futures Summary Presentation

Transcription

1 Smart New Zealand Energy Futures Summary Presentatin MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 1

2 Disclaimer This presentatin may cntain prjectins r frward-lking statements regarding a variety f items. Such frwardlking statements are based upn current expectatins and invlve risks and uncertainties. Actual results may differ materially frm thse stated in any frward-lking statement based n a number f imprtant factrs and risks. Althugh Management may indicate and believe that the assumptins underlying the frward-lking statements are reasnable, any f the assumptins culd prve inaccurate r incrrect and, therefre, there can be n assurance that the results cntemplated in the frward-lking statements will be realised. Furthermre, while all reasnable care has been taken in cmpiling this presentatin, Meridian cannt guarantee it is free frm errrs. MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 2

3 Intrductin Meridian Energy cmmissined a study by Prfessr Gran Strbac f Imperial Cllege, Lndn in rder t better assess the implicatins f smart grid technlgies fr New Zealand Prfessr Strbac has previusly cmpleted wrk fr Meridian t quantify the wider system implicatins and csts f integrating significant amunts f wind int the New Zealand pwer system The aim f the study was t understand smart grid technlgy implicatins and pprtunities frm a New Zealand electricity system perspective Prfessr Strbac visited New Zealand in August 2011 t discuss his study with Meridian and electricity industry stakehlders. Meridian is releasing Prfessr Strbac s reprt* publicly, alng with Meridian s views n the key messages frm it *G. Strbac et al. Smart New Zealand Energy Futures: A Feasibility Study. Summary Reprt, January 2012 MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 3

4 Executive summary The study quantifies the ptential benefits f emerging new surces f electricity demand and cntrl ( smart grid ) The benefits fr New Zealand are quantified in terms f the pprtunity fr the smart grid t defer investment in electricity infrastructure The study cncludes that future changes in electricity demand may create a substantial ecnmic case fr a smart grid in New Zealand. If electrificatin f the transprt sectr and increased electrificatin f heating demand ccurs then: Distributin netwrk benefits may be seen frm arund 2020 Generatin benefits may appear frm 2030 Transmissin benefits are marginal in 2030 but may becme significant by 2050 System balancing* benefits are expected t be limited due t the flexibility f New Zealand s hydr-dminated pwer system *System balancing r ancillary services are generatin (r lad) that is held n stand-by by the system peratr t ensure transmissin system reliability in real time. Ancillary services include frequency keeping, instantaneus reserves, vltage supprt and black start. MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 4

5 High level results Breakdwn f estimated benefits f flexible demand in 2030 and 2050 ($bn) Cst savings in respnse prvisin Cst savings in distributin capacity Cst savings in transmissin capacity Cst savings in generatin capacity $10.65bn The 2030 prjectins have medium levels f EVs and heat pump uptake with use f flexible demand deferring ver $3 billin infrastructure investment $3.58bn Uncntrlled Smart Uncntrlled Smart The 2050 prjectins have high levels f EVs and heat pump uptake with use f flexible demand deferring ver $10 billin in investment * All $ csts quted in this study are in tday s $ and are a cumulative calculatin f the level f additinal capacity required fr any given scenari and its assciated capital cst (these are nt NPV csts and d nt take int accunt the cst f implementing the technlgies under examinatin) MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 5

6 What the study findings mean fr New Zealand New Zealand s market design and regulatry framewrk will need t evlve ver time t prvide the right investment signals t unlck flexible demand side participatin Ensure that New Zealand s existing lad cntrl resurce is being fully utilised New Zealand s ht water heating lad cntrl resurce is effectively a sunk cst and can prvide many f the benefits that a smart grid aims t prvide Develp small scale cncentrated trials t learn mre abut the benefits (and ptential risks) befre wide spread rll ut is cnsidered New Zealand faces significant uptake f heat pumps and understanding their imact and pprtunities fr alternative mitigatin measures wuld be very valuable Encurage demand respnse There is a key rle fr the industry t play t raise awareness, put the systems and prcesses in place and t create incentives fr greater demand side participatin in the energy market At the netwrk level New Zealand s regulatry framewrk may need t evlve t recgnise investment in efficiency Netwrk peratrs need the ability t make chices between innvative demand respnse investments against investment in netwrk assets. Incentives t adpt technically effective and cst efficient nn-netwrk slutins need t be cnsidered as part f the regulatry design framewrk MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 6

7 Smart grid cntext MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 7

8 What is a smart grid and why is Meridian interested? Smart meters lay the fundatin fr a smart grid, but d nt cnstitute the smart grid in and f themselves Definitins f what the smart grid is vary*, but tw way infrmatin flw between the electricity system and cnsumers is a key principle. The Smart Grid cncept is dynamic and will evlve ver time Smart grid is in the technlgy hype cycle phase Meridian is investigating smart grid t: maintain a watching brief n new technlgies cntribute t industry debates understand future changes in energy demand understand the smart grid s ptential fr wind integratin * The IEA defines a smart grid as an electricity netwrk that uses digital and ther advance technlgies t mnitr and manage the transprt f electricity frm all generatin surces t meet the varying electricity demands f end users. The smartening f electricity systems is seen as an evlutinary jurney, rather than a ne time event MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 8

9 Envirnmental Cntext Internatinally, climate change challenges are strngly driving investigatins int the benefits f a smarter grid. There are tw main drivers: the need t integrate renewable generatin int existing systems, and the need t meet energy requirements frm electricity in preference t fssil fuels New Zealand s electricity system is hydr dminated and renewables based. This gives New Zealand greater flexibility t respnd t the challenge f integrating intermittent generatin Additinally, New Zealand already has a significant lad cntrl resurce in place thrugh ht water ripple heating cntrl These factrs mean a smart grid implementatin ffers fewer benefits in the near term cmpared t the benefits expected t be available in thermally based pwer systems. One f the bjectives f this wrk is t grund the smart grid pprtunity frm a New Zealand electricity system perspective* New Zealand smetimes faces the mre difficult challenge f being an energy cnstrained market (due t hydr fuel shrtages) where demand needs t be curtailed rather than shifted *In sme Eurpean jurisdictins a strng prprtin f the benefits f the value f a smart grid (ver half the benefits) is attributed t the value that may be available frm system balancing services. Achieving system balancing benefits, in rder t integrate renewable energy, is strngly driving internatinal smart grid research. Whereas, in the case f New Zealand, this value is fund t be relatively mdest and less than 10 percent f the ttal benefits available by 2030 MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 9

10 The smart grid study builds n previus wrk Meridian, in 2007 and 2008, funded lng term industry analysis n the integratin f wind in the New Zealand pwer system*: Mdelled increased system reserve, generatin capacity and transmissin reinfrcement csts as a result f integrating significant amunts f wind generatin (assumed 3.4GW f installed wind capacity by 2030) Increased csts fund t be lw ($2-3/MWh by 2020 and $9-12/MWh by 2030) due largely t hydr dminatin f New Zealand s pwer system Thrugh this wrk, Imperial Cllege develped a cmprehensive tlset fr analysis f the New Zealand pwer system under a variety f scenaris * MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 10

11 The current study cnsiders the changing nature f electricity demand and supply in New Zealand: Tw main drivers f change in demand (beynd business as usual grwth) used t test the bundaries f smart grid benefits: Electrificatin f transprtatin (electric vehicles - EVs) Increased electrificatin f residential heating (heat pumps*) The study als takes accunt f the impact f increasing use f renewables in New Zealand, in particular wind is intended t answer sme key strategic questins: Hw might residential electricity demand change in New Zealand, and what impacts culd this have n lng term industry investment? Given the cmmnly referred t smart grid technlgies, which f these ffer benefit in the unique New Zealand cntext? Where d these benefits fall, and what changes (e.g. transmissin, generatin investment)? *BRANZ surveys have fund a rapid grwth in heat pump uptake; apprximately 21% f huses in New Zealand had a heat pump in 2009 (cmpared with 4% f huses in BRANZ s Husehld Energy End-use Prject (HEEP) cmpleted in 2005) MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 11

12 A simple explanatin f the issue High uptake f Heat pumps (HPs) and Electric Vehicles (EVs) culd significantly increase peak demands n New Zealand s electricity system if nt used in a smart fashin A significant increase in peak demand wuld require investment in new generatin, and reinfrcement f transmissin and distributin netwrks (n tp f business as usual investment) The graph belw shws a cld winter day in 2050, with high uptake f HPs and EVs. As a result f nnsmart HP and EV use, peak demand increases frm arund 9 GW t ver 15 GW MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 12

13 and hw a smart grid can help A smart grid can be used t shift demand, reducing the peak The study mdels this in a way that desn t cmprmise quality f service fr custmers, e.g.: pre-heating f hmes befre peple return frm wrk EVs charge vernight and during the day*, rather than immediately when plugged in This can significantly reduce the level f investment required as a result f uptake f EVs and heat pumps Smart charging EV HP preheating Smart Uncntrlled * The study assumes a smart re-charging infrastructure is available MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 13

14 Characteristics f flexible demand Flexible demand redistributes lad but may nt lessen the ttal energy used (it can increase verall energy cnsumptin if there are lsses in the strage r energy cnversin prcess) Lad reductin perids are fllwed r preceded by lad recvery A key technical challenge is t design ways t maximise bth the efficiency and use f cntrlled lads, while at the same time nt cmprising cnsumer cmfrt levels Pwer system design seeks t gain scale efficiency frm demand diversity. The New Zealand pwer system is designed t meet arund 40 percent f aggregated ttal husehld electricity demand*. This wrks because nt all husehlds are cnsuming electricity at the same time. The flexible use f demand can reduce this diversity effect and ptentially increase peak demand if nt well managed Smart sftware and centralised cntrl appraches will be critical t ptimise and maximise the smart use f flexible demand * If all husehlds in New Zealand were simultaneusly cnsuming at their maximum level f demand. If this were the case, then cnsiderably mre generatin wuld need t be installed. The diversity effect is ne f the reasns that distributed generatin is ecnmically less cmpetitive than large scale generatin MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 14

15 Methdlgy and scenaris MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 15

16 Mdelling f New Zealand s electricity system The study is based n an integrated mdel f generatin and transmissin investment in New Zealand The mdel quantifies the investment required t prvide new generatin and transmissin t meet demand grwth, under each f the scenaris cnsidered The mdel assumes wind generatin increases frm 500MW in 2010 t apprximately 3,500MW* in 2030, and then slves fr the amunt f additinal thermal generatin required t meet peak demand This thermal generatin is assumed t be built in the Nrth Island, where gas infrastructure is already available Given these assumptins, the mdel seeks t minimise ttal generatin and transmissin investment, and prductin csts f electricity, while still meeting demand, system reliability targets and managing perating cnstraints Distributin systems are mdelled based n fur representative netwrks (urban, semi-urban, semi-rural and rural) which are then aggregated t match actual New Zealand data The mdel then estimates the csts f reinfrcing the mdelled New Zealand distributin systems t allw fr future demand under each f the scenaris * An alternative scenari with 7,100 MW f wind is als mdelled MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 16

17 Mdelling f electric vehicles and heat pumps Transprtatin flws are mdelled using Eurpean and UK data, calibrated t New Zealand driving patterns: 40,000 different types f EV jurney mdelled The mdel simulates energy use fr each jurney The mdel simulates when the EV is statinary and available fr charging, and when it will be next required (and therefre when charging must be cmpleted) Heat pumps mdelled based n: Detailed mdels f residential space heating lads fr existing and new built huses Individual regins within NZ are mdelled separately, but using Nrth Island and Suth Island temperature data (fr simplicity) Huses are assumed t be well insulated (by 2030) which means there is an pprtunity t manage heat pump demand (pre-heating) withut cmprmising quality f service fr the hmewner Other ptential surces f smart demand als mdelled: ht water heating and smart appliances (dishwashers, refrigeratrs) MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 17

18 Methdlgy Future Supply and Demand Develpment Scenari Water heaters Smart appliances Electric vehicles Heat pumps System peratin paradigm Scenari 1:Uncntrlled demand Scenari 2: Smart demand Distributin netwrk investment cst Impact assessment Generatin and transmissin investment cst Real-time balancing cst Value f flexible demand services The study uses a scenari apprach t explre the value f flexible demand services, fcusing n system wide integratin issues fr alternative ptential New Zealand system develpment futures between 2030 and 2050 MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 18

19 Scenaris cnsidered Scenari full name Business as usual 2030 Uncntrlled high demand scenari with integrated EV & heat pumps, 2030 and 2050 Smart high demand scenari with integrated EV & heat pump cntrl, 2030 and 2050 Descriptin Business as usual demand grwth frecast based n Electricity Authrity frecasts Business as usual demand grwth, plus 50 % electrificatin f heating and transprt by 2030, and 100% by 2050 with uncntrlled demand Business as usual demand grwth, plus 50 % electrificatin f heating and transprt by 2030, 100% by with smart use f flexible demand Referred t in charts as Business as usual Uncntrlled Smart These scenaris are pssible, but nt frecasted, futures. Making a frecast is nt the purpse f the scenaris They are high demand scenaris which are used t test the bunds f ttal cst savings available thrugh the applicatin f smart grid technlgies The scenaris help understand the drivers f future system csts and t assess the rder f magnitude f pssible savings that may be made by integrating flexible demand in New Zealand system peratin and develpment MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 19

20 HP and EV uptake assumptins Percentage f huses (%) 1. Heat pump uptake (based n prjecting BRANZ data) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Time (year) Number f EVs (%) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2. Electric vehicle uptake Eurpean data Time (year) Living Area Heating Whle Huse Heating Penetratin levels f heat pumps in New Zealand in 2030 reaches 50%, with sme whle huse heating Penetratin level f heat pumps in 2050 reaches 100%, with full whle huse heating High Eurpean electric vehicle data used as a prxy fr New Zealand uptake High and lw uptake scenaris mdelled: 100% electrificatin f transprtatin by 2050 and just under 40% electrificatin f transprtatin by 2050 Lw A mid pint estimate is used t calculate pint cst savings presented later in the study MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 20

21 Study scpe In scpe: Quantify the rder f magnitude cst savings available frm deferring the need fr electricity system investment, thrugh using cnsumer surces f flexible demand enabled by smart grid technlgy Out f scpe: An NPV business case fr a New Zealand smart grid deplyment The study lks nly at ptential benefits (cst savings) frm a smart grid, nt the csts f implementing it Other benefits f smart grid, such as cnsumer utility f smart grid technlgies Cmmercial and industrial electricity demand, which already respnd t price signals Regulatry and market arrangements that will be required t unlck a smart grid future Savings in the study are generated by nt building assets; current regulatry settings may nt incentivise this Overall gal is t prvide infrmed quantificatin f ptential benefits, under certain future scenaris, in rder t evaluate the ptential pprtunity, and where / when it may impact given New Zealand s unique system characteristics MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 21

22 Results distributin, generatin and transmissin benefits MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 22

23 Savings cme frm reducing peak demand Annual peak demand increases frm arund 7 GW nw t arund 11 GW in 2030 and arund 15 GW in 2050, in the high demand scenaris Smart grid applicatins can reduce these peaks and therefre reduce the level f investment required Scenari Peak demand (MW) Annual electricity cnsumptin (TWh) Lad factr (%) , % , % , % MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 23

24 Distributin netwrk deferred investment benefits New Zealand distributin reinfrcement csts fr uncntrlled scenari and savings achieved frm cntrlling flexible demand (Smart) in 2030 and 2050 $5.0bn $2.0bn $3.3bn $1.6bn Uncntrlled Smart Uncntrlled Smart Uncntrlled assumes high demand (EVs and heat pumps) and n smart grid Smart assumes flexible* demand frm a smart grid, and ffers significant benefits fr reducing the need fr distributin netwrk infrastructure investment. It can largely ffset the need fr additinal netwrk investment in the uncntrlled scenari by 2030, and mre than halve the investment required by 2050 * Flexible demand surces include: smart electric vehicle charging, smart heat pumps, smart appliances, water heating cntrl & vltage cntrl MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 24

25 Value f different frms f flexible demand at distributin netwrk level New Zealand distributin reinfrcement csts fr uncntrlled scenari and cumulative savings frm cntrlling varius flexible demand technlgies fr 2030 and 2050 $5.0bn $2.0bn Water heating + smart appliances heat + EV pump charging cntrl + vltage cntrl LV netwrks Uncntr. Smart 1 Smart 2 Smart 3 Smart 4 Smart 5 Uncntr. Smart 1 Smart 2 Smart 3 Smart 4 Smart The biggest impact by far is assciated with cntrlling charging f EVs. The additinal cntributin f cntrlling heat pumps and cntrlling vltage in lw vltage (LV) netwrks is lwer, but still imprtant, particularly when penetratin f EVs and heat pumps is high The value f cntrlling smart appliances (e.g. smart fridges and dishwashers) is marginal, as water heating cntrl can already d mst f it The rder that technlgies are applied affects the results; if EVs are applied first, the additinal cntributin frm ther technlgies is small. But ther technlgies will be r are already deplyed: heat pumps already have significant uptake, and water heating cntrl already exists in NZ MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 25

26 Generatin deferred investment benefits Additinal generating investment needed t accmmdate electrificatin f transprt and heat sectrs in Uncntrlled and Smart futures $9.0bn $2.5bn $1.4bn $4.5bn Uncntrlled Smart Uncntrlled Smart Generatin capacity investment can be reduced thrugh the use f smart electric vehicle charging and heat pump cntrl Medium benefits seen by 2030, and significant benefits seen by 2050 MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 26

27 Assumptins arund new generatin The study assumes that t ensure system reliability, additinal thermal generatin wuld be required t: supprt the level f wind generatin capacity assumed; and supprt the additinal heat pump and EV lad. The study assumes this is built in regins with develped gas infrastructure: Auckland, Huntly, Hamiltn, and Stratfrd Quantifying the extent t which this investment in thermal generatin can be deferred is ne f the key surces f value f a smart grid The generatin assumptins are nt a frecast f New Zealand s future generatin build mix The purpse is t develp and test the bunds f the ptential New Zealand smart grid pprtunity The study des nt rule ut ther pssible future generatin scenaris, such as a future with a greater uptake f distributed generatin MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 27

28 Transmissin deferred investment benefits Savings in transmissin investment cntributed by smart demand $3.6bn $2.6bn $0.3bn $0.28 Uncntrlled Smart Uncntrlled Smart Transmissin capacity investment can be reduced thrugh the use f smart electric vehicle charging and heat pump cntrl Benefits are limited in 2030 but are significant by 2050 The HVDC and its utilisatin is a significant factr in these results MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 28

29 HVDC flws under different scenaris HVDC flw is mstly suth t nrth at present, but with significant flws the ther way By 2030 under the uncntrlled scenari the predminant flws begin t reverse, but the present HVDC link is adequate; therefre n additinal csts, and n savings frm smart grid By 2050 under the uncntrlled scenari, HVDC flw is always nrth t suth, and a larger HVDC is required t cpe with shrt perids f peak Suth Island demand Under the smart grid scenari, the peak HVDC nrth t suth flw is smaller, which generates cst savings The future HVDC flws are driven by the assumptin that new thermal generatin is built in the Nrth Island 2050 Uncntrlled 2010 Nrth-Suth HVDC link Flw duratin curves SMART: Smaller capacity, higher utilisatin factr 2050 Smart 1 MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 29

30 System Balancing deferred investment 2030 Capitalised value f cst and savings in prviding frequency respnse services System balancing (i.e. ancillary/reserve services) csts can be reduced significantly by using smart appliances and electric vehicles as surces f strage ( vehicle t grid ). This value is lw cmpared t ther Smart Grid applicatins, because system balancing is nt cstly in New Zealand s hydr dminated system MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 30

31 High level findings N particular urgency fr smart grid technlgies t manage intermittency f generatin r supply peak demand (due t high prprtin f hydr) Additinal electricity system investment will be required t accmmdate the electrificatin f the heat and transprt sectrs in New Zealand; these new surces f demand will cause significant peak issues The deplyment f smart grid technlgies t manage this demand can significantly mitigate the additinal amunt f investment required The mst valuable surces f this flexible demand are smart EV charging and smart heat pump cntrl, as penetratin increases. When there is high uptake f EVs and heat pumps, smart charging f EVs and cntrl f heat pump demand will be f critical imprtance t smth and manage peak demand perids Water heater cntrl will cntinue t be imprtant in deferring the need fr lcal netwrk reinfrcement, especially when penetratin f EVs and heat pumps is lw Cntrl f smart appliances makes nly a mdest cntributin t smthing peak demand Deplyment f smart EV charging and smart heat pump cntrl technlgies culd bring significant benefits at a distributin netwrk level frm 2020 nwards; similar benefits may be available at a generatin level arund 2030 MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 31

32 What the study findings mean fr New Zealand New Zealand s market design and regulatry framewrk will need t evlve ver time t prvide the right investment signals t unlck flexible demand side participatin Ensure that New Zealand s existing lad cntrl resurce is being fully utilised New Zealand s ht water heating lad cntrl resurce is effectively a sunk cst and can prvide many f the benefits that a smart grid aims t prvide Develp small scale cncentrated trials t learn mre abut the benefits (and ptential risks) befre wide spread rll ut is cnsidered New Zealand faces significant uptake f heat pumps and understanding their impact and pprtunities fr alternative mitigatin measures wuld be very valuable Encurage demand respnse There is a key rle fr the industry t play t raise awareness, put the systems and prcesses in place and t create incentives fr greater demand side participatin in the energy market At the netwrk level New Zealand s regulatry framewrk may need t evlve t recgnise investment in efficiency Netwrk peratrs need the ability t make chices between innvative demand respnse investments against investment in netwrk assets. Incentives t adpt technically effective and cst efficient nn-netwrk slutins need cnsidered as part f the regulatry design framewrk MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 32

33 Trials Trials with tw way infrmatin flws t test custmer engagement and tailr prducts t suit custmer needs will be an imprtant step t learn abut the value a smarter grid can bring t bth cnsumers and the electricity industry. New Zealand retailers have begun experimenting in this space Specific areas f investigatin in the nearer term culd als include: trialling ht water heating cntrl appraches augmented with smart metering infrmatin mnitring f heat pump peratin and investigating pprtunities fr cntrl using smart metering data t deepen understanding f electricity cnsumptin patterns acrss varius cnsumer segments, ptentially augmented with appliance mnitring and cnsumer behaviural research Smart appliances will be f limited benefit frm a electricity system perspective s trials in this area are likely ffer less natinal benefit There will be future pprtunities fr technlgy transfer arund EV charging infrastructure and smart cmmunicatin MERIDIAN ENERGY LIMITED Analyst Presentatin: Smart New Zealand Energy Futures PAGE 33