Mar 28, 2025
Fight for a fair system: Rewiring Aotearoa's submission to the Energy Competition Task Force initiatives 2B & C

Overall, Rewiring Aotearoa welcomes the objectives of this package of proposals. from the Energy Competition Task Force. We view the package as a critical step in improving energy system outcomes for all consumers. We consider retailers paying consumers fairly as a critical step, and we are mostly satisfied with the Task Force’s approach to this (initiative 2C) and think it will create better outcomes for New Zealand consumers and the energy system as a whole. In contrast, the Task Force’s preferred option around how distributors are required to reward peak input from consumers (initiative 2A) will not in our view meet the Task Force’s (or the Electricity Authority’s) stated objectives.

  • Download our full submission here.

General context: 

The importance of this work

In the next five years it should be abundantly clear that tens of thousands of households will install solar systems (with or without batteries) as adoption rates continue to increase, and New Zealand sees the type of solar adoption already occurring in various countries around the world. What is still up in the air is whether those installs will include batteries, and how big the average install will be. These things are of immense importance to our energy system and each will be influenced by the outcome of this work. 

The Task Force is correct: “Even if more injection from mass-market consumers only reduced or deferred a small proportion of this investment, it would still result in substantial savings for distributors - and consumers - in the long run.” The potential savings from more injection reducing or deferring a large proportion of network investment is therefore well beyond substantial. Furthermore, we expect the vast majority of all consumer energy bill increases for the next decade or more, will come from inefficient investment in network infrastructure, not from generation cost increases. As such the ability to accurately price, and build out low cost distribution networks will be instrumental in impacting the future cost of living of all New Zealanders, in addition to our climate and resilience goals.

While not explored in detail in the consultation papers, the fact “more investment in [distributed generation (DG)] can provide wholesale market benefits by reducing the requirement for more expensive generation” is a large opportunity that should be recognised and actively pursued through this work. Rooftop solar and behind the meter battery installations present a fast, financially advantageous, and energy security strengthening method to expand New Zealand’s energy system, a method that has been consistently under-appreciated. 

The Code requirements that will come out of this consultation will have a meaningful impact on how many installs of batteries happen, and whether the installs will be specified to predominantly benefit those who install them, or will be sized in such a way that they are able to benefit all consumers in the energy system (by deferring investment, and providing additional capacity). Likewise it can also impact investment in emerging vehicle-to-grid technology, which also has significant potential to benefit energy consumers.

We regularly hear stories (and have first hand experience in our team) about consumers being recommended the smallest possible system based on historic bills, rather than likely future bills, let alone what system specifications could best benefit neighbours and the electricity system overall.

Distribution export tariff design should maximise benefit

Rewiring Aotearoa’s view is that it is important to design a distribution export tariff scheme that provides the greatest overall benefit to consumers. Rewiring Aotearoa’s analysis shows that the additional cost to consumers who do not install batteries, from implementation of Symmetrical Export Tariffs, would be small.

Rewiring Aotearoa’s preliminary analysis indicates that electricity bills for consumers without batteries would rise by approximately 2.3%, if 25% of New Zealand households installed 10kWh batteries, and received symmetrical peak export rates. This analysis assumes 40% of the battery capacity can be exported during peak times each day and an average distribution peak export rate of 12 cents per kWh, resulting in a total distribution export payment of $175 per year per household. Average bills are assumed to be $2500 before rebate. Under this scenario the battery uptake would provide 5000 GWh of peak reduction per year, and 2500 GW of peak reduction capacity if needed. 

Further Symmetrical Export Tariffs would directly incentivise the network to make sure all of their tariffs are cost reflective across the whole network, improving the ability to accurately price, and build out low cost distribution networks.

As the Electricity Authority notes, “The potential benefits of [providing distribution export] price signals are considerable. Boston Consulting Group’s ‘The Future is Electric’ report estimates more than $20 billion will need to be invested in distribution networks every decade until 2050.”  Therefore it is important to implement a distribution export tariff in a way that is effective to unlock the greatest net benefit for consumers.  

New Zealand is not Australia

We are confident that, in the near to medium term, solar in New Zealand will not face the headline challenge seen in Australia, where excessive power is fed into the grid during the solar window.

Australia is about a decade ahead of NZ, and started installing solar en-masse before home batteries or electric vehicles were mass market products. They were installing much earlier in the energy transition. 

In November 2023 just over 5% of solar systems also had battery storage in New Zealand. By January 2025 that leapt to nearly 13%, with a major solar installer on the South Island reporting that in the last quarter around 90% of their new solar installations included batteries. This rate is not necessarily the norm, however it demonstrates what is possible and could be unlocked (and potentially ensured) through providing clearer battery investment signals to consumers.

In comparison, Australia at the end of 2024 had about 4.4% of solar systems with batteries as well. So we are already placed differently on battery adoption, and this may not be surprising given New Zealand’s larger need for resilience.

With this trend accelerating, New Zealand can confidently dismiss concerns about solar energy putting pressure on networks, as seen in Australia. Instead, the country can be excited about the positive impact of battery deployment in reducing network congestion and pressure on the distribution network.

In addition to having timed our roll out of solar to be at a point where batteries are cheap and regularly installed (lowering grid impacts and driving benefits to the grid like peak reduction at minimal cost), it is also timed at a point where EV adoption is rising and EV cost parity is expected to be reached within a few years. Therefore the notion of solar’s “pressure” on the networks needs to be contextualised with technology price curves and adoption rates. There are plenty of places for low cost daytime energy to go, like charging vehicles and heating our electric water cylinders. New Zealand can deliver a significantly lower cost energy system with rooftop solar heavily featured in it, and many of the “fears” often spoken about are not evidence based.

The time is now: pursue what is needed, not what seems least disruptive to vested interests today

The Electricity Authority has a large, growing and important workload. We consider the Code changes that will result from this work are unlikely to be revisited in the next five years, and likely closer to next ten years. As such it is imperative to do what is in the best interest of the energy system and consumers now, and to regulate based on where the Authority wants things to be in a decade, rather than stepping stone type actions which will inevitably lead to non-cost reflective conditions in the market. The solution should be naturally evolving and cost-reflective over time.

Rather than going with an option that will deliver less and reward EDBs for being slow to build cost reflective tariffs for selling, we recommend the Authority view this as the significant opportunity to correct the regulatory failure to date and require EDBs to get it right, and in turn provide consumers with signals to do what is best for themselves and the overall system. 

Doing anything less than this is not putting, to quote Sarah Gillies, “consumer interests [at the] front and centre of [the] sector transformation”

There is a large information and resource dissymmetry

This submission is what Rewiring Aotearoa has been able to complete in the time available with the information available and our limited resources as an independent non-profit with a small team.

Distributors have significantly more information on low-voltage networks that we are unable to access that would likely make many of our arguments much more compelling. Like with many Commerce Commission processes, the lack of information we are able to access makes it unnecessarily complicated to undertake fulsome analysis, even though it is clear that this is what is needed for New Zealand consumers.

Analysis of this kind should not be left to charities to provide, and there remains a significant resource and vested interest asymmetry in energy system planning. The people who pay the most for, and the energy system is built for (consumers), have the least independent say in the decision making processes that will affect them.

We are hopeful the Task Force will undertake further analysis of what is in the best interest of consumers, and show the courage to make this work open source so assumptions can be challenged. There is no reason the workings for this should not be made fully transparent.

Complementary changes and active oversight are needed

While we are hopeful this package of proposals will lead to positive outcomes for customers, there are complementary changes to make it significantly easier for customers to install solar and batteries, and to be more easily able to install the size that makes sense for them. We look forward to continuing to engage with the Authority and others on these changes in the coming months.

While the system is already stacked in many ways against consumers, some distributors are actively making this even worse. On 25 March we learned of one distributor that is now including in their approval letters for distributed generation the following:

Over time, there will be more and more rooftop solar generation… At some future time, the output of all generation connected to the distribution network will need to be coordinated to ensure the network is not overloaded… When this happens there will be an additional cost incurred [for] an appropriate distributed energy resourced management system. We expect to pass this cost through to the connections with generation that export… For small systems, the annual cost to each generator is likely to be in the order of $100-$150. We mention this now so that you are aware of future costs that may affect your decision to proceed…

They apparently (we have been told) include this warning and active discouragement even when batteries are part of the system, which will provide what should be inarguable benefits to the distributor through peak reduction, in addition to soaking up excess solar production. This highlights the challenge ahead for Regulators to not just rebalance existing system settings, but also keep ahead of actions from distributors that are working actively against the long-term interests of all consumers. This is without going further into the details about how managing distributed solar should be seen by networks as an inherent part of 21st century electricity infrastructure, and that technically it is highly unlikely that a cost of $100-$150 per year is even remotely cost reflective. It also goes against distribution pricing principles. Symmetrical export tariffs (SETs), discussed below, would help incentivise cost reflective distribution pricing.

  • Download our full submission here.

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