Working together to meet the needs of New Zealanders

“To me, decentralisation is radical localisation of the generation capacity, which taken to its conclusion is self-determination - mana motuhake.

Resilience is key, given earthquakes and increasing climate-driven events, typhoons, etc. These fractures will leave communities hostage with a centralised system; or we could create a system where life can continue with essential services. One step up from a house is a community - my house and the other five on the driveway supporting each other as part of a living system, including double loops, so if one fails, the others pick up.

How might we build localised energy? Inertia is a big challenge, including the human brain: people, organisations and governments trapped in our own experiences and mindsets. Capital is conservative; as are governments and the big players. This is not a time for conservatism. We can be accelerating these transitions at a time of least cost of distributed energy resources (DERs). Accelerate across a gap that we're going to have to cross. Or we can talk each other into corners and deny ourselves.

If you get the right minds in a room to drive this, you can do anything. Change makers are always at the edge so typically get less attention. Break the thing open to get the conversation going. Support people out there that are making the case; sponsor those that are doing the bits that contribute to the overall programme. Connect in early stage investors looking for outcomes and a return - how would they resolve this? Then once it's de-risked and gets going, how do we keep fuelling it?

It feels to me that experimentation is important. We need socialisation of the possibilities, incentives and exemplars - something people can point to and take learnings from. Normalising the potential. Let's lean into it: commit 1% of portfolios, regulatory experiments, 1-offs…It's really good to see the community focus in the Authority's mandate.”

“Resilience is a big focus for our community, especially to AF8. Local solutions which people develop themselves can create better outcomes, and good regulations can help. Energy's not something people want to be without for a long time, so new solutions need to be reliable - what’s the backup to the backup? If we move to solutions with more local buy-in and resilience, and lower costs, we'll need good governance, including to know that the people responsible for the background maintenance are doing their job over the life of the asset.

Ideally our future system would enable free-flowing sharing of energy, with energy abundant and available to those who need it, at affordable prices. The system also needs to be profitable, to enable reinvestment. There seem to be a few barriers. For example, when I had pV installed on my own roof, I'd investigated installing more than we personally needed and sell the excess to my neighbours. But apparently that's a big no-no, which is just crazy. If we can't share with our neighbour then we definitely can't with a neighbourhood!”

“Sustainability is the thing for the community here, but it's not driving this project. What we pay for power in winter is the driver. Retailers have quoted us prices which are 25-90% higher than last year and given us 3-days to sign up!

Decentralisation doesn't happen top-down: what the Authority needs to do is enable the bottom-up solutions. Communities are motivated and ready to take action to solve electricity problems. And many solutions are win-win with the industry.”

“The energy sector is opaque and inaccessible for anyone who's not an expert. There are lots of community energy pilots underway around the country now, but they experience huge barriers and very little support beyond some funding in the Cyclone Gabrielle regions.

Some network companies can be really hard to deal with as they either see community energy projects as a threat to their asset ownership/profit generation or they don’t know how to engage effectively with their communities. Councils and civil defence groups who could play a critical enabling role generally aren't thinking about energy in a joined up way in terms of partnering with their communities. There are capability gaps in the community and energy sectors which urgently need to be addressed.”

“More distributed generation and storage can help networks, but electricity distribution businesses need to get their heads around it. They're understandably reluctant - in part because some don't have LV monitoring and controls in place to integrate DERs at scale. But that’s the networks problem; not the consumers. There are some tricky challenges but they've been known about for years. The rules should not be used to protect networks – they must be used to enable consumers, or we'll get worse social and economic outcomes.

The barriers to consumers need to be removed - like the 5kW export caps for households - that has to go.^[1] And the barriers to sharing and trading electricity locally - so many projects are waiting for this. Let’s get on with it - it's critical and shouldn't be that hard. Our electricity market is a Rolex, built by experts - incorporate a reconciliation process to enable local buying and selling.”

_{[1] Considering the 5kW export limit is on the Authority’s work programme.}

“Rooftop solar and batteries can drive down costs for New Zealanders and help to solve security of supply, but the barriers to uptake need tackling. Upfront capital cost for households, farmers, etc is a biggie - solutions are coming for that. Then it's the barriers imposed by EDBs and retailers, which the Authority is tackling.

It's the thinking outside the box that is missing in the industry, and so important. Seeing the threat and acting now to unlock value, like removing the 5kW limit on household export (and similar constraints being imposed on farmers), to things like cost reflective rebates which people will lose if they off-grid; to models for community batteries which actually prioritise community benefit (vs the current system, where as soon as you put something in front of the meter everyone clips the ticket).”

“Community energy is not easily compatible with current market settings. Deploying new delivery models that at fit-for-purpose to community context is difficult - there are no blueprints, you have to problem solve, broker, break new ground, overcome barriers. They are transaction cost heavy and need resourcing or they won't happen.

Across the energy sector, we have to be more conscious as to where the opportunities are, where the subsidies are and who can access and benefit from them: it's clear as day that there have been few and sporadic opportunities for communities to develop their own projects, and they have been trying for years.

In Australia there is a more supportive ecosystem and formalised (albeit voluntary) incentives as part of the major market-based incentives designed to encourage investment (capacity investment schemes). For example, the capacity incentive scheme to drive new renewables development includes a merit criteria that encourage development of mechanisms for community benefit sharing and community co-ownership.

You need to ensure there is an enabling context for a diversity of models (including models that do not involve upfront capital investment, such as rent to own or subscription models) in order to address the risk that these benefits are limited to wealthy people/communities.”