Electricity: The Fuel of the Future

Author: Martin Kovaks

As electric cars and smart appliances become mainstream, clean, green electricity will be the energy to power us into tomorrow.

It’s time to plug-in, and turn on to an exciting electric future. Over the coming years, a range of innovative, new technologies are poised to drive NZ’s transition to a low-carbon economy, with electric vehicles, residential battery storage systems and smart appliances all set to become mainstream.

As laid out in Transpower’s recently released Whakamana i Te Mauri Hiko – Empowering our Energy Future report, these and other technologies will need to be harnessed as part of the ongoing shift away from fossil fuels and towards electrification of the economy.

The national grid operator outlines how “accelerated electrification”, described as “a realistic yet aspirational scenario for the New Zealand economy and electricity industry”, underpinned by greater renewable generation capacity, can help meet climate goals.

So, casting an eye forward, what might the electricity network of the future look like, and what types of technologies are likely to become part of our daily lives?

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Time to plug in: the age of electric vehicles

Electric vehicles may currently occupy a comparatively small share of the overall market, however in the coming years it’s likely that drivers will increasingly be plugging in rather than fuelling up.

The electrification of transport is a major focus of the drive to decarbonisation, and Transpower forecasts that there will be around 1.5 million light electric vehicles on New Zealand roads in 2035, nearing 100% in 2050.

By the end of the decade, an increasing number of drivers will have gone electric, with Transpower expecting that the electrification of light vehicles will ramp up in the late 2020s and early 2030s, noting that:

  • Electric vehicles already, or will soon, outperform internal combustion engine vehicles across a range of areas, including operating costs and reliability
  • Electric vehicles will also be comparable to internal combustion engine vehicles on other important factors, including range and safety
  • Wider adoption of electric micro-mobility could see the substitution of cars with electric scooters, bikes and other small vehicles

To put the expected pace of growth into context, New Zealand passed the milestone of 10,000 electric and hybrid light vehicle registrations in September, 2018 (up from just over 200 in September, 2013), with over 20,000 registrations recorded in March of this year.

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Residential battery storage: smart electricity management at home

The market for residential battery storage systems has been evolving in recent years, and smart household energy management is firmly on the agenda amid the ongoing development of battery technologies.

Typically paired with solar panels, residential battery storage systems allow for the storing of solar-generated energy for use when required, delivering households further control over electricity use.

Transpower notes that, while batteries have cost and technology challenges, they “are assumed to emerge as a significant opportunity for meeting New Zealand’s energy storage challenge and contributing to daily peak demand periods”.

With batteries poised to play a growing role in the electricity network, Transpower advises:

  • In addition to electric vehicle batteries, distributed battery storage of 750 MW within electricity networks is estimated to be deployed by 2035, growing to 2500 MW by 2050
  • From 2032, the report’s base case assumes 30% of households with solar PV panels will install an 8 kW distributed battery, enhancing solar investment economics
  • Ongoing cost reductions, from $2200 per kW today, to $1500 in 2035, and $1000 in 2050, are expected to support uptake of distributed batteries

As the market continues to evolve, residential battery storage systems are also paving the way for new retailer offerings, such as virtual power plants and peer-to-peer electricity trading.

Energy efficiency: smart appliances and smart electric vehicle chargers

Energy efficiency is an important component of the low-carbon future, as part of the push to reduce overall strain on the electricity grid, and smart appliances can provide homeowners additional control over electricity usage.

While smart and energy efficient technologies may currently have a higher upfront price tag, it’s important to look to the long term and keep in mind the significant electricity savings they can provide.

Transpower expects that:

  • By 2035, there will be 2.1 million smart appliances in use
  • In addition to this, there will also be 1.4 million smart electric vehicle chargers in use
  • Mandatory smart electric vehicle charging will be critical in helping to manage peak demand

“Smart appliances, insulation and high-efficiency heating solutions are all examples of how pressure can be taken off periods of peak demand with the right investments,” the report states.

“Without sustained investment in realising energy efficiency gains, more generation capacity and investment in network and transmission infrastructure will be required.”

As noted by Transpower, an Energy Efficiency and Conservation Authority report released last year demonstrates the role that energy efficient technologies, including LED lighting and heat pumps, can play in meeting renewable goals.

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Renewable domination: an increasingly diverse energy mix

Renewable energy sources currently make up the majority of New Zealand’s electricity generation, and Transpower models a future in which fossil fuels are gradually phased out and renewables dominate an increasingly diverse mix.

As it stands, the Ministry of Business, Innovation and Employment’s Energy in New Zealand 2019 report shows that renewables accounted for 84% of electricity generation in 2018, led by hydro and geothermal generation.

Under the Transpower modelling, renewables will make up a 95% share of electricity generation in 2035 and 100% by 2050 in a normal year, with the mix in 2050 to encompass:

  • Hydro – remaining largely static, dropping to 36% of New Zealand’s electricity mix
  • Geothermal – increasing incrementally to 18%
  • Wind – growing rapidly to 28%
  • Solar – accounting for a 13% share of the market

Transpower expects that the remaining 5% of generation will come from a variety of “on-demand” sources, such as hydrogen and biomass generation.

As we slowly transition into the brave new clean, green electric-powered world, we can all do our bit to save on electricity at home. Not only will it reduce your carbon footprint, it will help save cash, too. If you’re interest in finding out more about the best electricity producers in the market, Canstar’s research can help.

If you click on the big button below, you’ll find a full rundown of the major players, how their customers rate them on values such as price and customer satisfaction, and details of the winners of our Most Satisfied Customers award, Flick Electric Co and Electric Kiwi.

Compare electricity providers for free with Canstar!

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