The New Zealand Commerce Commission has initiated an innovation project aimed at addressing the growing electricity demand in the country. This project is funded through the Commission's innovation allowance and focuses on developing a shared flexibility trading platform.

The Localflex platform is designed to help electricity distributors optimize their existing resources, potentially reducing the need for expensive network upgrades. This model has been successfully implemented in the UK and Europe, providing a centralized marketplace for electricity distributors to access flexibility services as needed.

Flexibility services may include electricity supplied from a 'virtual power plant' consisting of batteries in consumers' homes or agreements with businesses to lower electricity usage during peak demand. Traditionally, electricity distributors have responded to increased demand by investing in new infrastructure, such as power lines and substations, which can be costly and ultimately raise electricity prices for consumers.

The initial distributors participating in the trial include Powerco, Unison, Vector, Horizon Networks, and MainPower, covering a wide geographical area across New Zealand. The Localflex platform aims to simplify the engagement process for flexibility providers, who would otherwise need to interact with multiple distributors through various systems, leading to increased costs and complexity.

By offering a unified platform, Localflex could lower barriers for new providers entering the market, fostering competition and providing distributors with more options for managing demand on their networks. The Commission has approved funding recovery for Horizon, Powerco, Unison, and Vector through its Innovation and Non-Traditional Solutions Allowance (INTSA), while MainPower has joined the project independently to test the platform.