Investment in flexible resources set to ease renewables transition

19 Oct 2023

WiTHM six monthly monitoring report

A significant pipeline of new customer load connections is likely to boost electricity demand following flat demand growth in recent years, Transpower’s latest Whakamana i te Mauri Hiko (WiTMH) six-monthly monitoring report shows.

The report also highlights how growing investment in Battery Energy Storage Systems (BESS) and demand response can support the increasing proportion of intermittent renewable generation in New Zealand’s power system as the country decarbonises.

Transpower General Manager of Strategy and Customer Chantelle Bramley says these technologies can help address the winter peak capacity challenge Transpower has previously identified as a key power system concern.

“With the overwhelming majority of new generation being wind and solar, batteries and demand-response will be required to meet peak electricity demand when the sun is not shining and the wind is not blowing,” she said.

“The good news is that we are seeing a surge in interest in batteries attached directly to intermittent renewable generation units as well as stand-alone grid-scale batteries. These can be charged when conditions are good and supply the grid when demand and therefore prices are high, helping meet the peak capacity challenge.

“We are also seeing interest in demand response solutions that will allow electricity use to be dialled back when supply is tight and wholesale prices are high. This will help smooth demand peaks across the day when demand response is more widespread.”

Transpower currently has 410 MW of dedicated BESS in its connection queue and an additional 500 MW is under investigation and expected to be completed within 12 months. In addition, 3,035 MW of solar has associated battery storage, 330 MW of which is consented and a further 230 MW in delivery.

The report also shows there is a strong pipeline of new renewable generation with 30.4 GW of projects at various stages of development.

“Although not all of this will be built, we are seeing connection enquiries from potential developers of new generation continuing to convert into committed projects,” Ms Bramley said.

However, Transpower’s analysis supports a recent report from Te Waihanga, the Infrastructure Commission, that concluded that consent processing times from 2028 will need to be 50% quicker than they are projected to be under the Resource Management Act for Aotearoa to meet its climate aspirations.

“Moving a significant proportion of new generation enquiries through consenting and commissioning will be essential for the electricity industry to meet forecast demand by 2050.” Ms Bramley said.

The report also identified a significant pipeline of new customer load connections that should boost electricity demand in coming years following a flat two-to-three years of electricity demand. Driving this growth is large industrial customers increasingly electrifying their processes, in part with government support.

Ms Bramley said that there has been strong demand from industry to install high temperature industrial heat pumps, taking advantage of government subsidies. These heat pumps can reach temperatures as high as 160°C (320°F) or more. Unlike fossil fuel-based heating, they use electricity to capture ambient heat, making them highly energy-efficient.

“These heat pumps are increasingly of interest in process heat decarbonisation due to their very high efficiency relative to other technologies, especially fossil fuels,” Ms Bramley said. “There are also operational efficiencies gained through removing the need for fuel storage.”

The report also showed there are strong signs of potential new electricity demand growth through green data centres, rapidly climbing electric vehicle numbers, and potential investment in hydrogen production as a green energy source.

The report is part of Transpower’s Whakamana i Te Mauri Hiko work programme, which estimates a 68% increase in electricity demand by 2050 driven by underlying demand growth and electrification of transport and industrial processes.

For further information, please contact:
Senior Communications Advisor Laura Ackland on 021 394 042.