The proof there is now a market for electricity in New Zealand may be the existence of Simply Energy.
The firm was started in 2005 by three kiwis returning home with young families after extended period working in the electricity industry offshore.
Murray Dyer, Stephen Peterson and Chris Seel didn’t want to go back into large corporates, and saw opportunities elsewhere.
“There were a number of independent generators out there not owned by the Government – council landfill gas plants, small river hydro projects, wind farms and so on, but the systems and infrastructure required to participate in the market weren’t really there,” says Dyer, who carries the title of commercial director.
“Traditionally these companies would have gone to one of the big generators and sold their output, but if you are a large generator producing 200 MW, you are not going to worry about 1MW down the road.
“We saw the opportunity to provide services not only to get projects to market but also to optimise the value of that electricity to the market,” Dyer says.
Simply Energy inves ted in the infrastructure to be a registered generator, putting agreements in place with 28 network companies around the country to provide electricity to the network.
“Our view of the future of industry is it will be more and more difficult to consent and justify large projects,” says Dyer.
“It makes more sense to have smaller distributed generation closer to the load. From a network perspective, the more distributed the generation, the less need there is for upgrades to the network.”
As well as plugging the 1MW and 2MW hydro stations into the network, Dyer sees potential in making it easier to sell excess power from small scale solar and wind installations back into the grid.
That will make it more attractive for firms with a lot of retail or warehouse space to use their roof acreage for solar panels, or for farmers to throw up a wind turbine to run the milking shed.
“They want to sell excess generation, as well as draw energy from the main supply when say the wind is not blowing. They may never get off the grid but it is about reducing reliance and using local supplies.
“The technology cost is going in the right direction for smaller projects, and the distributed generation regulations of 2008 put a framework in place for identifying connection costs and default contracts round connections. That gives people more confidence, because they are not going to get tied up in a process where they do not know the cost to connect.”
While the price of technology is falling quickly, what’s driving investment in small scale solar and wind plants overseas is subsidies or feed in tariffs that don’t fit with New Zealand’s pure market ideology.
“We will get there eventually. That sort of technology feeds into the smart meter grids being put in now.