New Commerce Commission analysis shows that nearly all of New Zealand’s 29 electricity lines companies have started to introduce policies and practices to prepare their electricity networks for the country’s transition to a low-carbon economy.

The findings come from a review of asset management plans published by the companies, which set out how they intend to operate and invest in their networks over the next ten years and beyond.

Commission Deputy Chair Sue Begg said the review found that all electricity lines companies recognised that consumer sentiment and government policy on decarbonisation, along with improved technologies, will likely lead to increased electrification and a corresponding increase in demand for electricity on their distribution networks.

“The electricity sector has a key role in driving New Zealand’s transition to a low-carbon future,” Ms Begg said. “Electricity lines companies will need to evolve to accommodate increasing electrification in the transport and industrial heating sectors.

“They will also need to prepare for a change in how electricity is produced, transported and used and will need to explore use of alternatives to traditional lines infrastructure solutions in meeting some of the increased demands placed on their networks.”

Ms Begg said that the review provides a snapshot of the sector’s planning and readiness for decarbonisation and was not designed to assess the robustness of lines companies’ decarbonisation approaches or rank them.

“We recognise that there will naturally be leaders and followers in this space, and that lines companies will not address decarbonisation at the same pace or by using the same actions,” Ms Begg said.

“Nearly all electricity lines companies have reported at least one action they have taken or were planning to take in preparation for decarbonisation, with some going further and embedding decarbonisation into their overriding strategic objectives.

“For all lines companies, preparation for decarbonisation is a continuous process for which the requirements will evolve. And there will always be more work to do, and increased expectations.”

The review comes as the Commission continues dialogue with the energy sector on how it should organise its regulatory work programme to take account of emerging issues like decarbonisation. As part of this dialogue, the Commission published an open letter in April calling for views from the sector on emerging issues and will hold a workshop on 7 December 2021 to explore at a more detailed level some of the issues that were raised, including decarbonisation.

Electricity lines companies publish asset management plans as part of their information disclosure requirements under Part 4 of the Commerce Act. The information disclosure requirements help the Commission and other interested parties assess how they are performing and whether the statutory objectives of the Act are being achieved.

The central purpose of Part 4 is to promote the long-term benefit of consumers in markets where there is little or no competition and little or no likelihood of a substantial increase in competition.

The Commission’s Review of Electricity Distribution Businesses’ 2021 Asset Management Plans in relation to decarbonisation is available on the Commission’s website.
 

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