November 2024 Newsletter

A FlexForum view on filling holes in the value stack

Back in late September and early October FlexForum Members considered the practical implications of the flexibility-related solutions put on the table by the Energy Competition Taskforce, focusing on the opportunity to fill the holes in the value stack we found earlier in the year.

The two workshops raised a bunch of questions, particularly about the solutions to require distributors to pay a rebate when consumers export electricity at peak times, to require retailers to offer time-of-use pricing and to require retailers to better reward consumers for supplying power. We shared everything with the Electricity Authority, including several fundamental questions left hanging.

Members came back for more on 19 November to identify what solutions FlexForum would suggest to fill those value holes. About 30 people from across the ecosystem turned out for a healthy and provocative conversation about:

A checklist for deciding if a hole in the value stack is adequately filled
An initial assessment of how well existing value mechanisms provide a cash signal, are accessible and experience-able
The problems being solved...
Mechanisms or arrangements to solve those problems

Sorting out the value stack is critical to people saying yes to flex and maximising the potential for flexibility to avoid a decent chunk of the $300 billion which people and the power sector are estimated to spend over the next 25 years on generation and network infrastructure and to replace fossil fuelled gear.

You can get a bit more detail on the discussion here.

MBIE is ticking a step off the Flexibility Plan to do list

MBIE is consulting on regulatory changes to expand the permitted voltage range for distribution networks.

The change would deliver step #15 of Flexibility Plan 1.0 and will allow more people to put more solar on the roof of their house, business and community buildings. More solar is a good thing if you want a more affordable, reliable, resilient and sustainable power system.

FlexForum looks forward to ticking this step off the Flexibility Plan to do checklist.

Check out the proposal and have your say by 29 November 2024.

Electricity Authority funding and work programme proposal for 2025/26

The Electricity Authority is consulting on its funding for the 2025/26 financial year, plus a draft regulatory strategy and indicative work programme.

About 70% of what the Authority spends each year goes to service providers, like the System Operator, which undertake the hard graft of operating the electricity market.

But the funding also supports work by the Authority to upgrade the regulatory settings. The pace and scope of this work affects when the Flexibility Plan gets delivered.

Have a look and tell the Authority what you think by 13 December 2024.

FlexForum will be having a look to see what priority the Authority is giving to actions in the Flexibility Plan, particularly super critical priority actions to make it easier for people to make flexibility choices and to fill holes in the value stack.

Things FlexForum are working on

November 2024 Newsletter

View or download

Download

FlexForum has a fair bit going on across all of the things we do.

Solutions to fill holes in the value stack. FlexForum is coming up with advice on ways to give people more choices and options to maximise the value of flexible resources. More detail on this is in the lead item of this newsletter.

Flexibility Plan 2.0. It’s time to update the to-do list. This time FlexForum wants to include priorities and timelines to better hold the ecosystem accountable for progress with making it easier for people to take their flexibility journey and realise the value of flexible resources. Members will be giving views in late November and early December about updating, clarifying and ticking off steps, before looking at the results in early 2025.

Advice to regulators. There is a bunch of consultation happening. More than is possible for FlexForum to read or think about…. Fortunately, the Flexibility Plan and progress assessment keep us focused.

The big-ticket issues for FlexForum are advice to the Energy Competition Taskforce and Electricity Authority on options to fill holes in the value stack, and, looking ahead, advice to the Electricity Authority on data and digitalisation because data is a necessary condition to people easily and routinely making choices about flexibility. But we might find 5 minutes to provide MBIE with our advice to just do it and implement the voltage range proposal.

Doing things to accelerate progress in delivering the Flexibility Plan. FlexForum Members are keen to both talk about and show the tangible benefits of flexibility. The juicy ideas coming out of Flex Day are being squeezed to come up with things that could…make flexibility easier for people and show tangible benefits, enable broad involvement and be set up quickly (and scaled if this gives more learning).

Two of the questions we have been looking at are:

What could be done to better understand why people might say yes to flex. There is not much public evidence on why people will say yes to flex. Understanding why, when and how people will say yes to flex would inform policy and regulatory design choices and indicate the potential for flexibility to reduce the estimated $300 billion capex to be spent by the power sector and people by 2050.
What could be done to better understand the value flexibility can deliver across a range of use cases, particularly for network use cases. Confidence that flexibility will be there when it is needed is a must have for asset planning and management. But this confidence depends on the customer propositions and commercial models for each customer type, value stream, commercial offer…basically confidence requires real world testing to gain experience about how people will want to provide flexibility when and where it is needed.

Want to get involved?

FlexForum Members want to make it easier for households, businesses and communities to maximise the value of their energy resources and their flexibility. This flexibility will help deliver an affordable and reliable operation of the electricity system and enable accelerated electrification as part of Aotearoa New Zealand’s transition to a zero emissions economy.

If this sounds like you, check out our Intro to FlexForum for more on our what, why, how and who.

Or check out www.flexforum.nz to find out more or get in touch at info@flexforum.nz if you want to become a Member.