Aug 28, 2024
Rewiring Aotearoa
MEDIA RELEASE: Rewiring Aotearoa working to ensure new electricity taskforce will level the playing field for customers

August 28: Rewiring Aotearoa has welcomed the announcement of a taskforce to address issues in the electricity market but says the time for investigating is over and it is now time for action.

PĀNUI PĀPĀHO / MEDIA STATEMENT

August 28: Rewiring Aotearoa has welcomed the announcement of a taskforce to address issues in the electricity market but says the time for investigating is over and it is now time for action. 

“We’ve been loudly advocating for a level playing field for customers, not just a slightly less uneven playing field. The time for acknowledging customer problems without solving them is over and we hope that this announcement is a step in that direction. We want to see a high level of ambition and determination to solve these problems once and for all.” 

One of the key parts of the announcement was that the Electricity Authority would look at the existing tariff structure for customers with solar and batteries. 

CEO Mike Casey believes it’s an endorsement of the hard work Rewiring Aotearoa and other organisations have done over the years to convince officials that changes need to be made to the system that would benefit customers, rather than just the big players. 

“Customers with solar and batteries need to be paid fairly for their contribution to the energy system, and that’s not currently the case. We need to change the tariff structure so it is cost-reflective and the market is providing better price signals. 

“The electricity system was set up to be one way, from generators to homes. Our 21st century energy system needs to be smarter and more two-way. Customers need to be considered as a critical part of our energy infrastructure and this will be important work to bring that to life. 

“The Government wants more competition and more electricity generation to ensure security of supply. Customers can compete in both of those things, but we need to level the playing field so that they are fairly rewarded.”

There is mention in the announcement about working with industry and generators, but Casey says the taskforce also needs to work with future generators and flexibility providers, like farmers, small businesses and households. 

“We want to make sure they extend the same courtesy to all Kiwis because for too long customers have been getting a raw deal.”

‍Rewiring Aotearoa released a paper earlier this year arguing for something it calls symmetrical export tariffs, where a customer is paid the same amount for any electricity that is exported from the premises at peak times as they are charged for any power they consume at peak times. 

“Customers exporting at peak times is of value to both retailers and electricity distribution businesses. And it should be valued by the market. When symmetrical export tariffs are implemented, New Zealand homes, farms and businesses with solar and batteries could contribute much more to our energy system, lower the price of energy for themselves and for all New Zealanders, and provide a more secure and resilient electricity system overall.” 

“Symmetrical export tariffs are not a subsidy; they simply ensure consumers get a true reflection of the value their batteries provide to the electricity market and distribution system.”

By ensuring the true value of that export is reflected, it also means the payback time will be reduced for solar and batteries and more households will have the confidence to invest in these technologies because it makes the economics even more appealing. 

“Rooftop solar can help keep water in our dams and batteries will help maintain security during winter peak demand. They can also reduce the need to spend tens of billions on expanding network infrastructure, which is funded by homes and businesses over time through their bills.” 

As the paper showed, symmetrical export tariffs would mean customers with solar and batteries exporting at peak times would be paid around twice what they’re currently being paid for contributing to the energy system.

There is also an opportunity to ensure customers are paid more fairly by retailers with an export (or “buy back”) tariff that is more closely aligned to the wholesale price. 

“Effectively, retailers that pay customers less than the wholesale price for solar export are profiting from solar investments that have been funded by households and businesses. That’s not fair.”

Casey says the creation of the task force is positive but these changes need to happen urgently (by January 2025) and they need to be more than voluntary measures, to ensure the review process turns into fair outcomes for consumers.

“The time for investigating is over. The sector has been investigating and talking for years and the progress has been very slow. It’s time for things to change and for customers to be taken into consideration and Rewiring Aotearoa is here to help make sure it happens quickly.”

Read moreDownload the document here

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