The New Zealand competition authority has launched an innovation project aimed at enhancing the efficiency of electricity distribution networks in light of the growing adoption of solar panels, home batteries, and electric vehicles.

Funded through the Commerce Commission's Innovation and Non-Traditional Solutions Allowance (INTSA), the project will focus on how distribution networks can be optimized to better utilize these technologies, ultimately delivering greater benefits to consumers.

Powerco, which serves approximately 360,000 homes and businesses in the lower North Island and Bay of Plenty, will develop capabilities to operate as a Distribution System Operator (DSO). This model allows for more effective management of local electricity resources, enabling them to supply power to the network when needed and reduce reliance on the grid during peak demand.

The initiative aims to enhance understanding of consumer electricity usage, identify network pressure points, and create new products and services that offer consumers more choice and flexibility in energy generation, storage, and usage.

By improving management of electricity demand and local resources, DSO capabilities could minimize the need for costly network upgrades in the future, ensuring that investments are made where they will provide the most benefit to consumers.

In the long term, this could facilitate easier consumer participation in the energy market, allowing them to share or sell electricity generated from their own technologies.

The Commission believes that Powerco’s project has the potential to enhance network planning and management, reducing the risks of over- or under-investment in infrastructure while ensuring reliable electricity services. Powerco has been approved to recover up to $8.36 million, covering up to 75% of the program's forecast costs, with the first phase expected to run until the end of 2028.

Powerco will be required to report back to the Commission on the project's outcomes and lessons learned.