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Battery power lights up Auckland

Vector CEO, Simon Mackenzie, project manager Paul Cannin and Minister of Energy & Resources, Hon Simon Bridges inspect the Tesla Powerpack at Vector’s Glen Innes substation. Photo / Supplied.
Vector CEO, Simon Mackenzie, project manager Paul Cannin and Minister of Energy & Resources, Hon Simon Bridges inspect the Tesla Powerpack at Vector’s Glen Innes substation. Photo / Supplied.

People in the Auckland suburb of Glen Innes may not realise it but they are in the forefront of an invisible revolution which an energy disruption guru says will change the world by 2030.

Glen Innes is the first place in New Zealand - and the first in Asia-Pacific - to install a grid-scale battery storage system; commercial and household power is being provided by a Tesla Powerpack system, part of a global energy upheaval Stanford University lecturer Tony Seba says is coming fast.

It's invisible because Glen Innes householders can't tell where their power is coming from when they turn a light on, for example. But the change in their suburb is throwing a light on a massive, predicted global change.

Seba, once dismissed as a disruption alarmist, is now being seen as more of a visionary; energy companies, investors and nations are now taking notice of a future he predicts is only 15 years away - when today's power generation and transportation will be rendered obsolete by the revolution in solar power, batteries and electric cars.

Which is where Glen Innes and Vector, New Zealand's biggest distributor of electricity and gas, plus the new Powerpack system come in.

The $5m Powerpack, equivalent to powering 450 homes for 2.3 hours, has been installed instead of a conventional $12m upgrade to existing network infrastructure - an obvious saving. Vector chief executive Simon Mackenzie says the battery stores power to help ensure the goal of energy provision to customers at peak winter levels at all times.

"If we'd undertaken a conventional upgrade, we might have to do another one in five years or so," he says. "A conventional upgrade would also have given us far more capacity than is actually needed whereas we can just add more batteries if the need arises."

The Powerpack can also be used as a back-up in case of outages; Vector is planning to install 12 more in different locations over the next year or so; The local economics add up - and the new batteries also plug into the global energy trend Seba says will quickly produce a world with little centralised energy generation, 100 per cent electric vehicles and minimal private car ownership.

In a series of meetings with investors in Australia in May, Seba said: "It's the end of energy and transportation as we know it and it's coming very quickly. It's going to be over by 2030; it has started already."

It's a prediction underwritten by advances in four technologies - solar power, battery storage (like that of Tesla's Powerpack and Powerwall batteries, the latter for domestic use), electric vehicles and driverless cars.

While much of the publicity has so far been devoted to vehicles, Seba says many mainstream energy companies have overlooked that solar power is close to a tipping point that will drive uptake in much the same way as smartphones became a global phenomenon.

That will happen, he says, when the cost of solar energy undercuts the cost of transmission to an extent where centralised power generation will be largely redundant. People will become their own power generators, selling power to each other as well as to the grid.


WATCH this video to see the launch of the Tesla Powerpack in Glen Innes.

Video


"At that point," Seba said, "it is in every consumer's selfish interest to put up solar panels on every available rooftop because for those hours of sunshine... central generation will never be able to compete with rooftop solar," he says. "Solar is going to eat everything."

When the sun doesn't shine, batteries will - using power they have stored, meaning big power stations would only be needed for providing extra electricity for cities and for big plants like aluminium smelters. Distribution utility companies will become, Seba says, managers of power flows and transactions on the grid.

Mackenzie says there is no doubt "when you tie together all the things he is talking about, you can see we [Vector and New Zealand] are in a really good position." Vector is investigating and investing in the new technologies Seba describes.

Mackenzie says the system allows Vector to better manage risks associated with the $2 billion that needs to be invested in its Auckland networks over the next 10 years.

Predictions of falling costs surrounding solar power are already coming true, as are battery costs: "They have reduced by a huge amount in the past 10 years. Five years ago, batteries were over $1500 per kilowatt hour [the cost of the electricity the battery can push out]. Now it's down to $350 per KwH and Tesla and independent experts, like Deutsche Bank, have said costs will be down to $150 per KwH by 2020.

"We are leading the change here in New Zealand because we not only know change is on the way, it is also a matter of investing our capital wisely. You can't just spend on infrastructure which has a 40-year life and believe there will be no change in that time; you have to plan ahead of the curve."

Mackenzie also believes 50,000 New Zealand homes will have the Tesla Powerwall batteries installed within the next 10 years, probably led by rural customers where solar costs will stack up better than installing power lines. Vector has also been leading the way in providing chargers for electric vehicle owners with 20 installed around Auckland and more planned.

Mackenzie says Vector's fledgling peer-to-peer energy trading platform is also creating early interest.

The trial involves an online platform enabling people and businesses to buy and sell surplus electricity to each other. About 500 solar households, schools and community groups in Auckland are taking part - and can either sell power to each other or donate it to a school or to a neighbour who does not have solar power.

"There is a green element and a social element there we think many people will find attractive," he says, "and it is all part of readying ourselves for that change."

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