Perspective on New Zealand Smart Meter rollout

Perspective on New Zealand Smart Meter rollout

• 1.
  Perspective on New ZealandSmart Meter rollout Smart Energy Forum 27 November 2014, Newcastle, Australia Ron Beatty Principal Adviser Market Services
• 2.
  Smart meters orAMI • New technology is providing large amounts of accurate and timely data • Smart meters are just complex, programmable, measuring and recording devices • New Zealand Electricity Market (NZEM) defined as advanced metering infrastructure – AMI – includes comms and back office systems where information is collected by users
• 3.
  Smart technology transformation •The real “Smart” we are seeing in the NZEM is • new customer pricing offers and availability of time of use tariffs • development of rapid and reliable two way communications • internet of things • smart phones • developing communication protocols • promise of “Smarter” appliances that may integrate with other systems • mining of useful information from the extra data collected by the new technology
• 4.
  NZEM is amix of contestable market arrangements Hedge market Wholesale market Customer market Approved test houses Ancillary market Retail market Networks Metering market Smart home
• 5.
  NZEM competitive metering •Since 1 April 1999 metering has been a workable competitive market • metering services are independent of distributor and retailers • commercial arrangements required • guidelines available at http://www.ea.govt.nz/operations/retail/metering/metering-installation/ • The participant responsible for the electricity flow through a point of connection must ensure there is an MEP • trader (retailer) for customer connections to networks • grid owner for GXPs • generator for GIPs • network owners for network interconnection points • Voluntary roll out of AMI has resulted in no discernible cost increase to customers as costs and benefits currently accruing to the trader
• 6.
  Smart meters arepart of wider market facilitation including • AMI policy and guidelines • Set out expectations, recommended functionality and arrangements • http://www.ea.govt.nz/operations/retail/metering/advanced-metering/ • Settlement of secondary networks (customer, network extension and embedded) • Global reconciliation implemented (UFE) • Integration of distributed generation into the electricity market for seamless market settlement and customer switching • Default process for connecting smaller generators to distribution networks • Centralised data hub • High speed customer switching
• 7.
  Smart meters arepart of wider market facilitation including • New metering rules • regulated some AMI issues • dealt with programming changes to AMI • centralised metering records • establishment of MEP role • security and data access • MEP responsible for AMI meter reading • guidelines available at http://www.ea.govt.nz/operations/retail/metering/metering-installation/ • Regulated business to business file exchanges
• 8.
  1 – Firstindustry led data clean-up process completed 2 – Regulator signalled intent to enforce switching regulation, use of estimates commenced 3 – Global reconciliation and monitoring became effective 4 – Regulator required 50% within 5 business days and 100% within 10 business days 5 – Regulator put in place new metering rules and data cleanup – no impact to switch period 3 4 521 Smart customer switching
• 9.
  AMI installations asat 31 October 2014 - 500,000 1,000,000 1,500,000 2,000,000 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 NumberofICPs Year and month AMI installations Actual installed Current trend Number of ICP identifiers Trend based on last 6 months installs of 17,043 ICPs/month • NZEM rollout • signalled regulatory requirements and expectations early to market • costs and benefits initially realised by traders • AMI takes a long time to roll out • regulated agreements • opt out/in and customer customers • process changes have been disruptive • Either rolling out AMI or intending to roll out AMI • 8 MEPs owned by networks • 3 MEPs owned by retailers • AMI being used in customer settlement • 21 retail brands • most still use NHH meter readings • only 2 retailers use HHR AMI meter readings for invoicing and market settlement 55% of customer installations have AMI (communicating) installations operational
• 10.
  Reconciliation and distributedgeneration • NZEM uses full global reconciliation • traders provide consumption information • identifies unaccounted for electricity (UFE) • All buyers and sellers to NZEM do so on same terms • monthly revisions to 14 months • Reconciliation model solves for 378 NSPs by trading period and allows for • grid connected generation • any amount of embedded generation • grid connections to local networks • interconnections between local networks • interconnections to secondary networks • customer networks • network extensions • embedded networks UFE decreasing markedly as AMI is being installed
• 11.
  AMI has alreadyenhanced market outcomes • Integration of consumers into the electricity market using innovative tariffs – indirect load control • Improved consumer information using web portals • Accurate monthly customer invoicing – no estimates • Reduction in network losses • More accurate monthly wholesale market settlements • Retailers able to manage vacant consumption • New retailers entering the electricity market with innovative competitive service offerings to customers
• 12.
  • Flick isa new entrant retailer that uses 30 minute AMI information to invoice customers at wholesale cost (48 different prices per day, every day) • Flick provides web browser access to customers to keep track of their expenditure and the savings made on Flicks tariff • Customers receive incentives from the pricing to shift consumption to low cost weekend and night periods AMI enabled retail competition
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  13 Retail competition isworking HHI refers to the Herfindahl-Hirschman Index. This index is the sum of the squares of the market shares of every retailer in a market. For example, if there are two retailers and one has 80% market share and the other has 20% then the HHI = 80x80 + 20x20 = 6,800. If they each had 50% market share then HHI=5000
• 14.
  • Number ofcustomers choosing a new retailer steadily increasing since 2006 • Last 12 months about 20% of customers switched • Number of new entrant retailers entering market with new products Retail competition is working
• 15.
  Future smart developments •Around the world, the energy industry is facing fundamental change • change is disruptive to current processes • digital consumer technologies are creating new opportunities for utilities and others • “internet of things” evolving – consumer choice with smart products • Networks may become balancing systems • development of microgrids • economic battery storage • Smart use of “Big Data” - AMI and SCADA information • safety • asset maintenance improvements • capital deferral • integration of renewable generation • Consumers are becoming more • connected • expectations are increasing • self sufficient • energy efficient
• 16.
  Ron Beatty Principal AdviserMarket Services DDI: +64 4 462 0609 Mobile: +64 21 618 048 Email: [email protected] Electricity Authority - Te Mana Hiko Level 7, ASB Bank Tower, 2 Hunter Street PO Box 10041 Wellington 6143 New Zealand www.ea.govt.nz