Vector, in partnership with EECA and several retailers, is developing a live low-voltage (LV), multi-retailer orchestration pilot in Auckland. The pilot will test whether emerging constraints can be managed through calibrated, locational pricing supported by transparent operating envelopes (sometimes referred to as dynamic operating envelopes), before network reinforcement or contracted services are required.

The core research question for Vector is:

Can dynamic locational price signals, operating within transparent physical limits, reliably allocate and expand LV headroom across multiple competing retailers managing mixed portfolios of imports and exports, while maintaining network safety, system integrity and acceptable customer experience?

Vector is not trying to create a new market layer. Instead, it wants to test whether a price-led “envelopes + prices” approach can work within the existing industry settings to provide credible, scalable coordination of consumer energy resources (CER) in a real low-voltage environment. The goal is to identify the simplest combination of pricing and headroom signals that retailers can use to manage consumer flexibility while keeping the network safe and stable under both normal conditions and unexpected events.

The pilot is part of Vector’s Symphony strategy, which places non-network solutions (NNS) at the centre of delivering safe, reliable and affordable outcomes during electrification. If successful, the pilot will provide evidence that pricing can serve as the first coordination mechanism, with contract procurement reserved for targeted assurance where clearly justified.

How the pilot will work

The pilot is planned to occur within Vector’s LV Network Lab, which will be a hyper-local demonstration on a single HV feeder that supplies 12–13 LV transformers and around 1,200 installation control points (ICPs). This focus on LV assets has not been widely demonstrated for real-world testbeds with high penetrations of CER allowing the physical impacts on the grid to be tested and ironed out on a small scale.

Key features of the pilot include:

• Enhanced LV monitoring and topology validation, to produce credible real-time headroom calculations.
• Publication of LV import and export headroom at various points in the network, from feeder to transformer to ICP-level, depending on the efficient level of granularity required.
• Shadow, two-sided dynamic network prices, reflecting local scarcity for both imports and exports.
• Emergency signalling capability, enabling short-notice “shed” or “cap export” events where required (and providing the capability for future contracted flex services)
• Off-market settlement, with shadow billing and performance benchmarking, while retailers remain on standard tariffs.

While other pilots in this space focus on providing price signals to increase demand flexibility, Vector is taking it a level deeper by including information on headroom as well. Vector’s view is that some combination of both the headroom, which represents the true physical status of the network, and pricing will be needed to ensure that those managing flexible devices are able to make rational decisions about their planned behaviour.

Retailers will be integral to the success of the pilot. As the network owner, Vector’s role is to publish credible, machine-readable signals and envelopes while retailers translate those signals into customer products and device-level actions. Retailers may manage orchestration centrally within their portfolio systems, or consumers may use home energy management systems (HEMS) that optimise devices directly against published headroom envelopes and time-varying price signals. The pilot does not privilege one retail model over another.

The pilot will provide valuable insight into whether consumers are comfortable letting retailers or devices manage CER automatically, and how factors like trust, transparency and perceived value will influence their participation and sustained engagement.

The pilot is intended to be structured in phases:

• Phase 0-1: Establish LV visibility, publish total headroom and test emergency signalling, without dynamic prices.
• Phase 2: Introduce shadow, two-sided dynamic locational network prices layered on published headroom.
• Phase 3 (subject to progression criteria): Explore per-retailer operating envelopes and alternative headroom allocation rules.
• Phase 4 (optional): Test more advanced headroom allocation or trading concepts.

Progression between phases will be subject to defined criteria relating to safety, participation depth, behavioural response and governance robustness.

Other countries have shown what’s possible with static and dynamic export operating envelopes, but there are still important gaps in evidence for how this would work in New Zealand’s competitive retail market. The Auckland pilot is designed specifically to fill these gaps:

1. Multi-retailer coordination on shared LV assets: Most trials have effectively operated with one dominant flexibility provider per constrained asset. There is little empirical evidence on how headroom should be allocated between multiple competing retailers on the same LV transformer.
2. Joint import and export management: Export-focused DOEs are now common internationally. There is far less practical evidence on coordinated import and export headroom management across mixed CER portfolios.
3. Interaction of envelopes and dynamic prices: Few trials have deeply tested how two-sided locational pricing and operating envelopes should interact in practice - including whether pricing can expand usable headroom and reduce the need for fixed contracted volumes.
4. Minimum viable complexity: Many international schemes have accumulated significant integration and governance overhead. There is limited clarity on the minimum signal and interface complexity required to deliver safe, effective LV orchestration in a multi-retailer environment.

Transparent operating envelopes will be a key part of transitioning Aotearoa New Zealand to a flexible, low-emissions electricity system so we look forward to following Vector’s progress.

The overarching goal for all the EECA pilots is to significantly increase EDB confidence in demand flexibility as a tool for deferring traditional capital expenditure, and the eventual outcome of the pilots is that EDBs increase their use of demand flexibility.

Steps taken in the Flexibility Plan

This pilot contributes to several key steps in the FlexForum Flexibility Plan:

Flexibility Plan Step

3. Determine what network capacity information people need for decision-making, what data is available, what data is needed, and how the missing data will be obtained.

4. Determine the options to report historical and current network reliability and quality information (eg, voltage) for the LV layer.

12. Determine the options to make it easy for people to compare their connection options and costs with and without flexibility.

• identify and provide the network information people need to assess their connection options with and without flexibility.
• develop initial with-flexibility physical or contractual connection options, eg, connection agreements with dynamic operating envelopes [FP1.0 #11] or lower capacity connections
• provide people with incremental price information for common plausible connection scenarios