The Role of Solar and Batteries in New Zealand’s Flexibility Services
By Aniket Bhor on in New Zealand Energy News
Basketball legend John Wooden once said that flexibility is the key to stability. And while he meant that in the context of personal growth, it cannot be truer in the context of electricity generation and transmission. Offering ‘Flexibility Services’ has now become a top priority for most utility companies worldwide.
As the name suggests, flexibility services allow for flexibility in power generation and supply through the use of Distributed Energy Resources (DER) such as solar power plants and Battery Energy Storage Systems (BESS). Let us take a closer look at the concept, and how solar and battery play a key role in it, especially in New Zealand’s case.
What are Flexibility Services?
Every time we flick a light switch, our subconscious thinks of energy as something that flows to our house from some invisible, near-infinite storage reservoir. In reality, power is continuously generated and continuously consumed.
The problem in this model is that the levels of power consumption aren’t always steady. The power consumption in an area is maximum around dinner time, when a majority of the home’s appliances are operational. Similarly, the usage drops drastically past midnight. While the existing power infrastructure is designed to satisfy this variation in energy needs, the needs themselves are rapidly changing.
For instance, as we shift to electric mobility and more and more cars are powered by electricity, the power consumption, especially during peak hours, tends to rise sharply. One way to cater to the increased demand is to increase the network capacity. Here’s an illustration of the same:
The problem with this approach is that increasing network capacity means building new power generation units and the infrustrature to deliver the power, which cost millions of dollars - which will need to come from customers’ wallets.
This is why governing authorities and utility companies worldwide are starting to adopt a frugal solution. Instead of building new, bulky power generation units, they are turning to existing distributed power generation units, such as community solar power plants, or even residential solar PV and battery systems. Think of it like this - it makes sense to buy disposable cutlery for a birthday party instead of buying a whole new load of chinaware just for that one day.
But that is only half of the solution. Flexibility services not only make use of distributed energy resources (DER), but also of their smart functionality. For instance, a battery bank can store energy during off-peak hours and release it into the grid during peak hours. Or a smart EV charger can be programmed to switch on at midnight.
Consequently, even though the total energy consumption over a 24-hour cycle is increased, the peak demand does not increase. In other words, the increased demand is distributed a bit more evenly over the 24-hour cycle, eliminating the need for more power generation. Here’s a graph that illustrates it:
The Role of Solar Power and Battery Storage in Flexibility Services
In light of how power systems are transforming globally, the International Energy Agency calls Flexibility Services a top priority. And in this transformation, it recognizes Variable Renewable Energy (VRE) and Battery Energy Storage Systems (BESS) as inevitable drivers. In other words, flexibility services cannot be provided without the help of solar power and battery storage.
While it is complicated and expensive to build new power plants and transmission lines, it is far easier to use the existing solar power plants and battery banks to meet additional demand. In a sense, solar and batteries can be seen as on-call doctors that rush to meet any sudden requirements in New Zealand’s communities.
Fortunately, modern technology imparts enough smartness to solar and battery systems to make them perfect for flexible supply. For instance, with a few simple clicks on your smartphone, a grid-connected solar battery can be programmed to charge during off-peak hours and discharge energy into the grid during peak hours.
It gets even better - by charging the battery with solar power, we can not only redistribute the demand profile over a 24-hour cycle (remember our graph above), but also reduce this demand altogether.
Other Tools for Flexibility
Solar power and batteries are certainly the star players in flexibility services. But they aren’t the only tools. A host of other smart devices can help shift the demand profile. An excellent example of this is smart EV chargers, which can be programmed to switch on at hours of low demand, such as during nights.
This can avoid a sudden peak in the evenings, when EV owners are likely to come home from work and plug their vehicles in for charging. With the inevitable transition to electric mobility, electric vehicles are poised to take up a major share of the energy consumption. As such, it only makes sense to have chargers that can charge the car in a flexible manner. In fact, countries are slowly starting to make smart chargers mandatory (UK being the first to do this).
Some other examples of devices that can help bring flexibility to our power systems are smart heat pumps, smart washing machines, and pretty much any smart home device whose operation hours can be customised.
Besides smart devices that can operate at non-peak hours, another approach to reducing demand peaks is to use systems that can switch off power-hungry devices whenever demand peaks. For example, Simply Energy offers the ‘Simply Flex’ hub, which when mounted on the customer’s premises, can turn off power-intensive appliances automatically based on network capacity.
Benefits of Flexibility Services
Let’s make a list of all the benefits flexibility services can offer a country or a community.
1. Stable energy bills
The most important benefit of flexibility services is the avoidance of increased power bills by avoiding the building of new power infrastructure. Traditional power plants require tremendous amounts of resources to build - money, space, time, manpower, etc. By using existing DERs like solar power plants, utilities can save these resources, thereby keeping the cost of electricity relatively stable.
2. Helps achieve sustainability goals
Worldwide, most new distributed energy resources (DER) are solar PV systems. In some cases, they can also be wind turbines or biomass generation units. But in the majority of cases, DERs are renewable energy systems - which is why the IEA highlights the importance of renewables in power systems transformation.
Essentially, we are replacing upcoming traditional power generation units with cleaner options such as solar power. This prevents enormous amounts of carbon emissions from entering the atmosphere, thereby slowing down climate change. With most countries now having ambitious sustainability goals, flexibility services can help achieve these goals through decarbonisation. In New Zealand too, flexibility programs can help reach our goal of carbon neutrality by 2050.
3. Helps bring social equity
In New Zealand, there is a disparity in energy pricing throughout the nation. People from lower-income neighborhoods are paying higher prices for power, and also facing higher price hikes. When you install a solar power system and use it to supply power into the grid at peak hours, this helps maintain the supply and prevent or delay the building of new power infrastructure.
Therefore, you avoid higher power costs not only for yourself but also for your fellow energy consumers who may not enjoy the privilege of installing a solar or battery system themselves.
The Status of Flexibility Services in New Zealand
Flexibility services are gaining importance all around the globe, and New Zealand is not far behind. Several utility companies and organisations are running trials and pilot programs for flexibility services, urging their customers to participate. Here’s a list of some of the activity that is currently underway in Aotearoa.
1. Ara Ake’s FlexForum
Ara Ake is a government-funded entity designed to promote clean technologies in the country. It recently launched the FlexForum, a platform meant to bring together people and organisations across the electricity ecosystem to help maximise the value of consumer and distributed energy resources and flexibility. It has a 3-stage plan towards establishing and strengthening flexibility services in the nation:
Identify the minimum specifications of the services that DER can provide, to whom, when, where, how, and for how much.
Identify the practical, scalable, and no regrets steps to use the services that DER can provide.
Support ongoing learning and collaboration across the electricity sector on real-world deployment of solutions to realise the benefits of DER, including identifying and resolving barriers.
Recently, Ara Ake was chosen to administer the government’s new Distributed Flexibility Innovation Fund to support the electricity system to manage demand. Ara Ake will tap into the $20 million offered in the funds to support innovative technologies and systems in order to better manage peak electricity demand and improve reliability and resilience at the network level.
2. Wellington Electricity’s Flexibility Trial
Wellington Electricity is looking to use flexibility services for its customers. While the company is still in the planning phase of the trials, interested customers can send an email to WE at smarterpower@welectricity.co.nz expressing interest in participation.
3. Orion’s Lincoln Flexibility Trial
Orion, New Zealand’s third-largest electricity distribution company, has recently launched a flexibility trial. Owing to increased demand, Orion is planning to build a new zone substation near the Lincoln township.
However, the company is interested in exploring the feasibility of flexibility services in avoiding or delaying the building of said substation, saving millions of dollars and thereby avoiding increased power prices to its customers. In its own words, ‘Orion’s objective is to provide energy security at a lower cost than new network infrastructure and implement a solution that will also support the transition to a lower carbon energy supply.’
While applications for the trial are now closed, further rounds may open based on the trial’s results.
4. Aurora Energy + SolarZero Flexibility Trial
In 2021, Aurora Energy partnered with Auckland-based SolarZero to run a ‘virtual powerplant’ trial. Instead of building new power infrastructure, Aurora uses energy from the numerous solar and battery systems on SolarZero’s customers’ properties whenever the demand for power peaks.
Also known as the Upper Clutha non-network solution, it is the first of such programs in the country.
5. Electricity Engineers Association’s FlexTalk program
The Electricity Engineers Association (EEA) has created the FlexTalk program in partnership with the Energy Efficiency and Conservation Authority (EECA). The program will run trials of a communications protocol named OpenADR to enhance two-way communication between the electricity distribution company (EDB) and the flexibility supplier.
Also known by its tongue-twisting name of Demand Flexibility Common Communication Protocols Project (DFCCPP), the FlexTalk program will make use of smart devices for the said communication, and run pilot trials to develop the procedures needed to actively manage the charging of electric vehicles (EVs) in real-time. This will test how distributed energy resources (DER) are integrated flexibly within NZ’s distribution networks for optimal energy use.
Conclusion
There is a Chinese proverb that says that the best time to plant a tree was 20 years ago. The case with electricity infrastructure is somewhat similar. While it thankfully does not demand a 20-year span, there is undoubtedly a need for planning in advance.
Especially now, since we are stepping into the era of electrification - particularly on the onset of electric vehicles taking over the world - keeping an eye on potential spikes in power demand is more important than ever. And to be prepared when the demand suddenly shoots up, we need to prepare before it happens.
The most straightforward way to cater to increased demand may be to build new power infrastructure, but it is not the smartest way. A more cost-effective and sustainable approach is to use renewable energy and battery storage systems in a flexible manner.
And the best way to do this is to use the numerous existing and upcoming solar power systems and battery banks scattered throughout the nation, especially in thousands of Kiwi homes. The benefits of such flexible services are proven, and the only thing to do now is to ramp up trials and adoption of such programs further, in order to be prepared when the wave of electric vehicles and electrification in general hits us.