Simon Mackenzie, group chief executive officer of Vector. Photo / Steven McNicholl
For infrastructure company Vector, the benefit of taking load off the network is an economic no-brainer.
With more than 500,000 homes and businesses to supply via a 17,500km network, the costs of expanding and maintaining the network are running at about $150 million for the current year and this could
double annually during the next 20 years.
In 2007 the company started trialling small wind turbines at 10 sites around the country and soon after transformed a downtown Auckland substation to showcase micro-generation capable of supplying individual homes, and a range of energy saving appliances and information systems to allow consumers to call the shots.
Already customers on the Vector network are selling power back to their suppliers. While just five have done so this year, turning the tables on retailers will be a growing trend.
Vector chief executive Simon Mackenzie says the biggest potential lies in photovoltaic solar systems which offer the best potential for DIY generation.
Last month his firm turned on the switch on the largest commercial installation of thin film solar panel technology in partnership with Hubbard Foods in Mangere.
This installation powers lights in a warehouse with the electricity equivalent needed to supply 3.5 homes over a year.
Network operators don't lose out if home-based generation does take off; micro-generators will still need retailers as backup and the capacity to supply the grid to help pay the substantial cost of their system. Mackenzie says distributors win.
"To be able to shift load around the network means you can optimise your capital expenditure. Being able to do that means you build your networks in a much more efficient way," he says.
Vector's manager of strategic solutions, Gareth Williams, says the cost of photovoltaic systems has halved within the past four years. Within seven years the cost of generating at home could be comparable to what you'd pay a retailer for grid electricity. Battery storage technology is also improving rapidly. But one of the key features of smart grid technology, and available now, is instant diagnosis of problems.
"For us a lot of work on the smart network is all about monitoring. It saves us having to send out a man in a van."
