Barriers to flexibility uptake from the innovators' perspective
Read about why a fully functioning flexibility market is so important for our energy system, and the fund that Ara Ake has launched to help flexibility service providers reach their goals.
Ara Ake has commissioned a white paper which has identified that many flexibility service providers face significant upfront challenges and costs—such as integration, software development, and customer engagement.
Read the report
Overview
Enabling a smarter, more flexible energy system in New Zealand
Imagine a New Zealand where households, businesses and communities are active contributors to a smarter, more affordable and resilient electricity system. That’s the goal of a fully functioning flexibility market – and Ara Ake is committed to accelerating energy innovation to make it a reality.
Why flexibility matters
Flexibility is a key enabler of New Zealand’s energy transition. It allows for greater uptake of distributed energy resources (DER), strengthens system resilience, and helps optimise the use of existing infrastructure.
While flexibility has long existed in New Zealand’s energy system, such as hot water ripple control, significantly more flexible capacity will be needed to meet our decarbonisation goals. There are a number of innovators now leading the way, developing cutting edge technologies, news business approaches and building trust with New Zealanders to participate in emerging flexibility markets.
Addressing barriers to market growth
As this market develops, procurers of flexible services need assurance that supply will be available when needed, while flex providers need confidence that they will be renumerated fairly. Though innovation is moving at pace, the commercial viability of flexibility remains a challenge.
Understanding the innovator experience
To better understand the challenges facing flexible services providers (FSPs), Ara Ake commissioned a series of research interviews with a cross-section of innovators – from small startups to established industry players operating in the wholesale and reserves markets.
The findings
Within the white paper, interviews with FSPs highlight the need for clearer investment signals, consistent regulation, and fair value-sharing models to support the growth of local flexibility markets. Key challenges include:
- Funding and risk: FSPs need investment certainty and fair compensation for pilot participation. And to move beyond the pilot stage to find pathways to commercial viability.
- Market and regulation: Inconsistent signals and rules across the electricity sector limit scalability.
- Value access: Flexibility often delivers system-wide benefits, but rewards don’t always reach those providing it as a service.
- Coordination and data: Stronger collaboration, transparency, and access to low voltage network data are needed to unlock innovation and get the best value out of flexibility services.
- Customer engagement: Engaging communities and households in flexible energy use is essential for scaling impact.
FSPs are calling for a shift from short-term pilots to long-term, scalable solutions — supported by practical trial environments, new trading models, and system-wide alignment.
Ara Ake National Flex Discovery Fund
In response to these insights, Ara Ake has launched the National Flex Discovery Fund to accelerate the commercialisation of flexibility innovation in Aotearoa New Zealand.
The fund offers grants to help flexible service providers become visible on open-access flexibility platforms, and to scale and improve the capacity and reliability of the service they provide.
Learn more about the fund and how it supports innovation in New Zealand’s flexibility market.
