SolarZero Enables World-first Trade In NZ Electricity Reserves Market

Today solarZero, New Zealand’s leading solar and battery storage provider became the first in the world to trade energy grid stability services from its virtual power plant (VPP) in the NZ Electricity Reserves Market, and the moment was marked by the ringing of the NZX bell.

Andrew Booth, solarZero Chief Executive says, “Today marks the dawn of a new age for energy and commodity trading that will be needed to support the world’s journey towards a net zero carbon future. In the face of the highest energy prices in the history of New Zealand, every home that has a roof can now earn extra income, safely power through blackouts, and support their community by reducing the cost of electricity for everyone.”

solarZero’s energy trading breakthrough means New Zealand is a test market the rest of the world will be watching, and follows the company's acquisition by a fund managed by BlackRock Alternatives’ Climate Infrastructure. Blackrock intends to invest NZD$100 million of capital over the next three years to accelerate the development of solarZero and its unique battery technology platform.

“New Zealand’s goal is to reach net zero carbon emissions for electricity within the next seven years, and adopting new technology to enable decentralised, cheaper, distributed energy generation is a key part of this journey. solarZero is a world-leader in renewable energy and we have a real opportunity through initiatives like this to pave the way for other countries to follow our lead,” says Booth.

solarZero shares revenue from trading in the market with its community members through a monthly eco-bonus credit. Every member can expect to be credited $18,000 across the next 
20 years by lending their battery and roof to take part in solarZero’s virtual power station (VPP), which reduces their power bills. On an annual basis the solarZero community currently saves more than $2.3m on their energy costs.

Over the past year teams from NZX, Transpower, Panasonic and Auckland University have collaborated to develop the software, validate the capability of the VPP to participate in the market, and to integrate the solarZero platform.

NZX Chief Executive Mark Peterson says, “solarZero is offering a world-leading service into the real time market that assists with both keeping the lights on, and New Zealand’s pathway to a 100% renewable electricity system. NZX is delighted to have facilitated solarZero’s entry into the wholesale electricity market and we support them on their journey to grow their business.”

solarZero is starting a staged enrolment of its 10,000 household battery systems into the New Zealand electricity reserves market, providing 40MW of both fast and sustained reserves. The batteries, which autonomously sense frequency and respond when there is a glitch in the power system, will help Transpower maintain a stable electricity grid as the nation transitions to 
100% renewable energy.

Dr Stephen Jay, General Manager System Operation, Transpower says, "The smart distributed energy future that has been signalled for some years is now arriving, and we’re pleased to enable this new technology into the electricity system to provide power system stability services. This is an important first step for smart, distributed technology, not just for New Zealand but globally.”

How does trading energy on the energy market work?

Power exchanges operate in a similar way to regular stock exchanges. A typical type of power exchange is a short-term spot market. This includes markets such as the day-ahead and the intraday market, where power is traded for either the upcoming or current day. This exchange is used to buy and sell power on short notice to meet demand. Usually, these transactions are needed to level out forecast deviations in both consumption and production

What is the reserves market vs the energy market?

Energy and reserve markets are two important market components in the deregulated power industry. Energy markets provide a platform for generating companies, retailers, and big energy consumers to centrally trade electricity. However, owing to the varying renewable power generation, load variation and unexpected contingencies, energy supply and consumption always embody high uncertainties. Furthermore, due to the lack of low-cost, large-capacity energy storage devices, an instant balance between the generation and load is required under these uncertainties. Therefore, the reserve market is set up to address the balance-disruptive uncertainties intrinsic to the power grid. Although this combined market design reduces the risk of the possible imbalance in energy supply and consumption, it does not guarantee that the frequency of the grid is satisfactory, even in the normal operation.

What is a virtual power plant (VPP)?

A VPP is a network of solar and smart batteries that can be collectively controlled to help manage the electricity network. Globally VPP is cutting edge technology, and is part of the emerging trend in power supply in communities like Brooklyn/Queens in New York, Washington DC, California, Australia and Singapore. Each home that has a solarZero system is part of a VPP - connected via the batteries and smart control systems. Solar energy created in each home not only supplies power for that home, but also feeds excess back to the grid - this “virtual power plant” shares power generated within the local community to the wider community, ensuring electricity demand is carefully managed and continuous supply is achieved.

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