Vector Energy chief executive Simon Mackenzie understands the future will be nothing like the past. “At a high level our vision is about creating a new energy future,” he tells EcoGeneration. “We probably take a different approach to most businesses in the energy sector, where we are embracing new technology.”
Consumers will inevitably be drawn to technology that helps them manage their energy and lower their costs, he says. “And at the same time we need to mitigate the risk of investing in long-life traditional assets that could be at risk of displacement in the not-to-distant future with new technology.”
Rather than sitting back and waiting to see how the energy transition may play out Vector has deployed battery and solar solutions, helped by a strong relationship with Tesla. In October, Vector upgraded a substation in Glen Innes, east Auckland, with Asia-Pacific’s first grid-scale Tesla Powerpack battery storage system to be integrated into a public electricity network. The installation can store 1MW/2.3MWh, the equivalent to powering 450 average homes for 2.3 hours, the company says.
The battery installation suited the site, Mackenzie (pictured above right) says, because the network area was due for a traditional upgrade. The batteries are moveable, so if a decision is eventually made to upgrade the substation with traditional assets the batteries can be plugged in at other locations.
It’s a simple strategy: grid-connected batteries remove peaks. Traditionally, networks were designed so that if one section fails the other section can meet full load, which proved to be expensive. Vector moved to a probabilistic model, Mackenzie says, where the risk is monitored of failures during peaks. It has now evolved to using a probabilistic-with-incremental model, where a battery is utilised during peaks to shift loads “so you don’t have to build expensive infrastructure to service that peak”.
A key ingredient to getting it right is analysis of the deep reservoir of consumer consumption data, which was never available in the old days. New Zealand experiences summer peaking areas just like here in Australia but winter peaks are also common. “Typically around July 6 is the worst for us,” Mackenzie says, speaking from the company’s Auckland headquarters. “When schools are out and it’s wet and cold.”
The company is also busy in Auckland installing charging stations for electric vehicles “to remove the anxiety of traffic” in a city where the population has outstripped what once was an efficient motorway system.
Vector is the largest listed infrastructure company in New Zealand and is majority owned by Entrust, a community trust formerly known as Auckland Energy Consumer Trust. Its assets include the electricity and gas distribution networks in Auckland, a 23% share in a 50MW wind farm in central North Island and a stake in a gas logistics business. It is also behind the rollout of about two-thirds of the smart meters in New Zealand, and involved in gas trading, gas processing, LPG, batteries, solar and vegetation management, electric vehicles and telecommunications.
In Australia Vector is looking for opportunities in the commercial, utility and off-grid sectors, on the back of interest generated by the Glen Innes battery storage project.
“It’s a good relationship with Tesla, with their battery experience and us with our network and engineering capabilities, to be able to do those integrations which are very complex,” Mackenzie says.
The company has also signed two contracts with retailers in Australia around providing smart meter solutions to solar customers.
The New Zealand and Australian renewable energy worlds are pretty different. Solar hasn’t been subsidised to anywhere near the extent it has been in Australia, and has much lower penetration as a result. But things are moving, Mackenzie says, with interest building in solar-with-battery solutions. Auckland is growing fast, and panels are likely to start popping up on new developments and existing households, he says. Auckland experienced a network shock in 1998, when a transmission cable failed and the CBD lost all power. New Zealand’s famous hydro projects are mostly gathered in the South Island, far from the Auckland metropolis.
“Being small on the global scale and being able to engage with the large players in the industry is fundamental,” Mackenzie says. “They need people like us that understand the complexities and the technical issues and regulatory structural issues of the industry to help them with their models.”