Electricity demand programmes to improve security

The Government is giving a post-Budget boost of $2.9 million to the Energy Efficiency and Conservation Authority for programmes that will save businesses money and help improve electricity supply security.

"These programmes focus on savings we can make on the demand side of the electricity market," says Minister of Energy Pete Hodgson. "They offer a real opportunity for medium and large electricity consumers to cut costs, contribute to system security and help keep prices as low as possible."

The programmes are expected to result in electricity savings totalling 350GWh a year by 2005/06 — roughly equivalent to a year’s worth of continual production from a 40 MW power station, or the annual electricity consumption of the dairy products industry or 43,000 households.

Demand Exchanges

Last week Mr Hodgson announced the Electricity Commission’s responsibility for making demand exchanges available nationwide. These exchanges enable medium power users to trade power they have contracted to buy. This makes load shifting, demand reduction or the use of stand-by generation more profitable. "Cabinet agreed yesterday to fund EECA to work with the electricity industry to get more demand exchanges up and running," Mr Hodgson said. This is expected to produce electricity savings of up to 100 GWh a year by 2005/06. Government will contribute $700,000 in 2003/04 and $450,000 in 2004/05.

"Any business that consumes between 5 and 10 GWh a year can profit from participating in a demand exchange and should contact EECA or their electricity retailer to express their interest."

Energy Audits

EECA's energy audit programme will be expanded by $1.1 million in 2003/04 and $540,000 in 2004/05. The expanded programme will offer subsidised audits to large electricity users - those consuming more than 10 GWh a year.

"Energy-intensive businesses can make efficiency improvements to reduce energy use and save money, with no impact on production," Mr Hodgson said. "The resulting electricity savings help meet demand elsewhere."

This programme aims to audit a total consumption of 10,000 GWh, approximately one quarter of New Zealand’s electricity use. The expected energy savings reach 250 GWh a year in 2005/06.

Incentives

A feasibility study costing $68,000 will look into the case for a financial incentive scheme for investments in energy efficiency by electricity users.

"Many firms considering cost-effective investments in electricity efficiency face financial constraints which stop them proceeding, for example investment criteria that demand a shorter payback period. We want to examine whether an incentive scheme would be justified by the extra investment in energy efficiency it could bring on."

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