Switch off and cash in

By CHRIS DANIELS energy writer

Auckland lines company Vector has joined forces with the Government's energy efficiency agency to set up an electricity "demand exchange" that could earn New Zealand businesses money for switching off.

The new internet-based forum enables power users to offer times when they might be able to reduce electricity use, or switch to their own, on-site generation.

Electricity is not traded, but a company would stop using a certain amount of power at a particular time, which would help a lines company wanting to "smooth out" peak demands.

And a big power user could pay small power users to reduce demand at the time it wanted to use energy.

One of the most important pieces of kit needed for a company is a "time of use meter" that monitors power use in five-minute blocks.

The Energy Efficiency and Conservation Authority (EECA) and Vector say these exchanges could help New Zealand avoid generating up to 900 megawatts of peak electricity a year.

The Huntly power station, New Zealand's largest, generates 1000 megawatts of electricity.

Vector's transmissions, valuation and development manager, Duncan Head, said the exchange had not been set up as a money-making venture for the company.

He said big power users were not the only ones that that could do well out of the exchange.

Some smaller companies could have a lot of flexibility in when they used power. "There is a huge amount of untapped potential," he said.

While there was "not a lot of technology behind it", the exchange was initially a way of seeing what sort of demand was around, and what sort of prices would need to be offered for companies to take part.

"What we want is for all the buyers and sellers to come together and create this market."

EECA chief executive Heather Staley said a properly functioning exchange could create energy savings, because electricity was lost when it was sent through the transmission network at peak times.

She said the volumes traded on the exchange would be likely to increase when the price of electricity on the wholesale market went up.

This would mean those being asked to save power would get more benefit, and big users would be more likely to pay.

"You get paid for saving, and your electricity is cheaper than it would otherwise be by paying somebody else to save," said Staley.

The EECA is working out how it will be help companies pay for new meters and audits from its consultants, who will advise which companies might benefit from using the exchange.

Energy Management Programme