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Tech disrupts electricity sector, maybe

Sarah Putt, Contributor. 13 September 2018, 10:11 am

Technology transforms every sector and you might think that electricity would be at the forefront of disruption, but the Government's Electricity Price Review released this week shows the sector has mixed views about how profound the changes will be.

"The electricity sector stands on the threshold of change that - depending on each participant's role - will be disruptive, unpredictable, promising or hardly noticeable," the report notes.

While much of the report is, appropriately, focussed on retail pricing and security of supply, the section on technology provides a brief insight into some of the changes that are coming down the line.

There is mention of the ability of those who generate their own power (for example through solar panels) to sell it to others via peer-to-peer trading. The creation of alternative payment systems, such as blockchain, will help facilitate this. Blockchain is defined in the footnotes as:

"Blockchain, originally developed for the cryptocurrency Bitcoin, could provide alternative payment methods for consumers, such as peer-to-peer trading. It could in time supplement or replace the electricity sector's trading and payment processes. It is too early to say how big its impact could be, or when it might be felt. However, regulatory frameworks will need to be flexible enough to take account of Blockchain and its derivatives should this technology make any significant inroads into the electricity sector."

Of course, blockchain is about the means of payment, the real disruptors will be electric vehicles and solar panels - two things that are beloved by the tech industry. Sales in New Zealand are currently low compared to other countries cited in the report: "In Norway, 40 per cent of new car sales are electric. In Germany, some power companies will top up householders' electric vehicles for free overnight - provided consumers allow their car's batteries to be drawn from in an emergency. In California, solar panels will be compulsory in all new homes by 2020."

What has driven high adoption of solar panels and electric cars is government subsidies, rebates or tax deductions, but the report notes that "the proliferation of solar panels has nearly overwhelmed the capacity of some countries' network and threatened their reliability". It adds that Australia and Germany have scaled back on solar panel subsidies to "let a more balanced and integrated system emerge."

Meanwhile, the social impact of these changes is also canvassed in the report. There is discussion about how solar panels and electric vehicles can adversely affect lower income households, who won't be able to afford the new technology, but who could end up paying for it in other ways, as the report notes:

"Lower-income households will bear some of the costs that better-off households will avoid by installing solar panels, which we predict will become more common. The same goes for electric vehicles. Lower-income households will bear a disproportionate share of the cost of building extra network capacity if these vehicles are widely used and recharged during peak hours."

The report is available here, with submissions due on Tuesday 23 October.


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