Updating regulatory settings for electricity distribution networks to support the transition to a low-emissions economy

The Electricity Authority is looking to update the regulatory settings for distribution networks to better support the electricity sector’s transition to a low-emissions economy, while continuing to provide long-term benefits to consumers.

Distribution networks have an important role to play in supporting New Zealand’s transition to a low-emissions economy by providing the infrastructure that connects electricity users with electricity producers. As the country transitions, electrification of transport and process heat will create a substantial increase in electricity demand going through distribution networks.

Consumers will use more distributed energy resources (DER) such as solar panels, electric vehicles and batteries and there will be more connections to the grid. A cost benefit analysis conducted by Sapere estimated the potential benefits for DER to be around $7 billion over the next 30 years.

“We want to see empowered consumers taking control of their energy and participating in the electricity system in new ways. For a successful transition to a low-emissions economy it is critical that services evolve to meet changing consumer needs. The system settings need to be right to allow innovation to occur and promote strong competition, so consumers get the services they want and need, at an affordable price.” says Andrew Doube, General Manager, Market Policy at the Electricity Authority.

Distribution networks connect and integrate DER to the network and maintain the reliability of electricity supply. Using DER, households, businesses and industrial consumers will have more control of their energy use than ever before. Mass participation in the industry means there will be more buyers and more sellers of electricity and related services. New and existing suppliers will need to compete to win customers by offering innovative products and services that reflect consumer preferences.

“Together with industry, we need to look at the regulatory settings governing distribution networks, to make sure there are no barriers to maximising the benefits that DER can bring consumers and fully enable the sector’s transition to a low-emissions future,” says Mr Doube.

In addition to the innovation and competition issues around DER, the Authority will also look at other issues  that have previously been raised by participants such as access to information, more efficient price signals, and reliability challenges arising from managing two-way power flows on distribution networks.

A discussion paper, Updating the Regulatory Settings for Distribution Networks is available. The Authority wants to talk with as many participants as possible to gain better clarity around the issues identified and potential regulatory options. To talk directly with the project team, or to register your interest in attending a workshop, email distribution.feedback@ea.govt.nz.

After assessing all stakeholder feedback, preferred options will be identified and released for consultation.

The feedback period for the discussion document closes at 5pm on Tuesday 14 September 2022.