Electricity supply and demand in New Zealand

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Critical Peak Pricing

One approach to capture costs of network contingencies is described in congestion period demand (CPD) charges, also referred to as control period demand. These charges occur at times when the electricity system (electricity generation, transmission lines, or distribution lines) reaches its maximum load and generates stress on the utility grid. To try and reduce demand during times of peak demand, customers (currently only commercial customers) are charged for demand electricity in dollars per kW. This charge is approximately equivalent to the cost of constructing another kW of capacity (Jack, Ford, Dew, & Mason, 2016). For residential customers this charge is incorporated into lines charges and electricity price per kWh and not separately displayed.

Spot Market Pricing

There is a gradually increasing number of electricity customers in New Zealand that choose to be on an electricity tariff with time-of-use or real-time electricity price component. Such services provided by Flick Electric (real-time pricing), amongst others, enhance the utility grid operationality and highlight the potential of DR mechanisms in New Zealand (Electricity Authority, 2018d). Residential consumers have only recently had the opportunity to buy electricity based on spot market prices, while industrial electricity consumers had this opportunity for much longer. Since 2014 the electricity retailer Flick Electric Co has provided a retail service for residential and business customers that incorporates spot market electricity prices at the residential and business customer’s end (Flick Electric Co., 2018a).

Ripple Control

Ripple Control (RC) is a historical and widely utilised form of DR in New Zealand. Installed in the 1950s as a measure of controlling load during intervals of low hydro electricity generation, RC partially cuts off load at the customer’s premises (especially hot water systems) and thus enhances the balance of electricity supply and electricity demand (Ministry of Business, Innovation & Employment – New Zealand Smart Grid Forum, 2015). Via the electricity distribution system, a frequency signal is received by ripple receivers and initiates load curtailment until a second signal enables the appliance’s operation again. RC provides lower electricity charges for customers but requires the consent of customers to cut load at certain times, which are not announced prior to the DR event. RC is also utilised at fixed times to switch street lights on and off. It is fur – thermore used to facilitate electricity tariffs aiming to switch from day- to night-tariffs.

Load curtailment and load shifting

Other forms of DR are curtailable load and load shifting, respectively. A minimum customer size (kilowatt) is required to participate in curtailable load tariffs. Two forms of curtailable load are prevalent. The first form curtails an electricity load while the second form curtails the load only to a specific, predetermined level (Aalami, Moghaddam, & Yousefi, 2010). Fig. 11 demonstrates the second form of curtailable load where the initial load is curtailed to a predetermined level of approximately five-hundred kilowatts over nine hours.

DR scenarios

DR scenarios analysed are based on the DR mechanisms described in section 3 and are calculated based on three scenarios for each load profile and appliance aggregation. We choose simple scenarios to facilitate comprehension of the analysis. Note that we do not consider second order effects such as consequential system price changes under these scenarios but utilise market information measured without the implementation of DR scenarios. Furthermore, we utilise a simplifying assumption under scenario three that shifts the load in the prior time-period. This load shifting could involve pre-heating and pre-cooling prior to the time of peak demand. The following section aims to present and describe these three DR scenarios depicted in Fig. 15.

Table of Contents :

• Table of Figures
• List of Tables
• List of Equations
• Contributions
• Citation and usage license
• List of Abbreviations
• Executive summary
• 1 Introduction
• 2 Electricity supply and demand in New Zealand
  • 2.1 Electricity supply
  • 2.2 Electricity demand
• 3 Categories of DR in New Zealand
  • 3.1 Critical Peak Pricing
  • 3.2 Spot Market Pricing
  • 3.3 Ripple Control
  • 3.4 Load curtailment and load shifting
  • 3.5 Transpower DR programmes in New Zealand
• 4 Data & Methods
  • 4.1 Definition of peak times
  • 4.2 Developing half-hourly baseline demand profiles
    • 4.2.1 Heat Pumps
    • 4.2.2 Hot Water
    • 4.2.3 Refrigeration
  • 4.3 DR scenarios
    • 4.3.1 Scenario 1: Load curtailment to zero
    • 4.3.2 Scenario 2: Halved load curtailment
    • 4.3.3 Scenario 3: Load shifting
  • 4.4 Economic analysis method
• 5 Results
  • 5.1 Energy potential of DR scenarios
    • 5.1.1 Heat pumps
    • 5.1.2 Hot water heaters
    • 5.1.3 Refrigerators
    • 5.1.4 Heat pumps, hot water heaters and refrigerators
  • 5.2 Economic potential of DR scenarios
    • 5.2.1 Spot market prices
    • 5.2.2 Incorporating spot market prices and CPD charges
• 6 Summary, recommendations and future work

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Estimating the Technical Potential for Residential Demand Response in New Zealand