Kāinga Ora Multiple Trading Trial
Ara Ake has been collaborating with New Zealand's public housing provider, Kāinga Ora, to launch the Multiple Trading Relationships trial for homes equipped with solar panels in the Wellington region.
Since late 2022, Ara Ake has been collaborating with New Zealand's social housing provider, Kāinga Ora, to launch the Multiple Trading Relationships (MTR) trial for homes equipped with solar panels in the Wellington region.
Kāinga Ora owns and manages over 72,000 public and transitional homes across New Zealand. In late 2020, with funding from the Māori and Public Housing Renewable Energy Fund administered by MBIE, Kāinga Ora initiated the installation of rooftop solar panels on over 630 homes across 11 regions. Installations began in 2021.
Key Challenges
In 2022, Kāinga Ora found that customers with solar panels were only utilising about one-third of the solar energy generated. This was due to the mismatch between solar generation and typical residential electricity demand. The remaining two-thirds of the generated energy was injected back into the local electricity network at rates significantly lower than retail tariffs, providing only small gains to customers depending on their provider’s buy back rate (see the variable buy back rates on the Powerswitch website).
Innovative Solution
To address this, Kāinga Ora sought a solution that would:
- Maximise the benefits of solar energy for all customers, even those whose homes are not suitable for solar panels.
- Allow customers to continue using solar energy and purchase additional electricity from the grid, maintaining their consumer rights.
The Multiple Trading Relationships Trial
In 2022, Ara Ake and Kāinga Ora partnered to establish a Multiple Trading Relationships trial environment. This innovative solution involves the separation of import and export registers at installation control points (ICPs) where solar has been installed on social housing, as shown in the image below. This allows Kāinga Ora to capture the value of excess solar electricity being exported to the grid and benefit other customers facing energy hardship.
Such an arrangement is not currently permitted under the Electricity Industry Participation Code 2010 (the Code), as each ICP must be registered to just one retailer.
Regulatory Framework
This MTR trial is the first of its kind in New Zealand's live electricity market. To facilitate this, the Electricity Authority granted exemptions from the Electricity Industry Participation Code 2010, allowing Wellington Electricity, Intellihub, Bluecurrent, and Paua to the People to participate without breaching the Electricity Code. Details of these exemptions in the New Zealand Gazette have been linked at the bottom of the page.
The Electricity Authority has provided updated Guidelines on applying for Code exemptions that you can read about here:
Technical Summary reports on trial findings and earnings:
- Six monthly summary report - January to June 2024
- Six monthly summary report - July to December 2024
Pricing and Market Impact
The exported solar generation is priced at wholesale rates (spot), minimising risk to retailers and revealing the true benefits and costs of MTR, including wholesale price risks that needs to be taken on.
Trial Duration and Future Implications
The trial will run for at least one year or until June 2028, when the regulatory exemptions end. The Electricity Authority views this trial as an opportunity to:
- Assess and learn from the MTR model alongside industry stakeholders.
- Develop a more sustainable energy solution for New Zealanders.
- Further promote competition in the electricity market.
Project Participants
- Paua to the People
- Wellington Electricity
- Intellihub
- Bluecurrent
Timeline
- September 2022 - Ara Ake and Kāinga Ora sign MoU
- January 2023 - Ara Ake and Kāinga Ora write to the Electricity Authority seeking a "regulatory sandbox" to deliver a Multiple Trading Trial
- March 2023 - Intellihub and Wellington Electricity submit requests for regulatory exemptions to the Electricity Authority
- June 2023 - Electricity Authority grants first regulatory exemptions for the trial in Wellington region
- August 2023 - Kāinga Ora launches a RFP to select a trial retail partner to purchase solar energy exported to the grid
- November 2024 - Paua to the People is selected as retail partner
- December 2024 - Bluecurrent joins the trial as incumbent metering equipment provider in the Wellington region
- January 2024 - Paua to the People, Bluecurrent and Wellington Electricity submit additional requests for regulatory exemptions
- April 2024 - Electricity Authority approves additional regulatory exemptions to enable the trial
- May 2024 - Twenty homes are launched into the trial environment for the first time
- July 2024 - Over 150 Kāinga Ora homes are currently trialling Multiple Trading Relationships live in the electricity market
- June 2028 - Regulatory exemptions expire
Media Releases
5 September 2022: Kāinga Ora and Ara Ake partner to enable solar energy sharing trial
27 June 2023: Solar energy sharing for social housing trial
27 June 2023: Solar energy sharing for social housing trial approved
2 April 2024: Exemptions granted for innovation trial
29 August 2024: Kāinga Ora solar programme awarded for breaking new ground
Exemptions
Regulatory exemptions granted for the trial:
- Electricity Industry (Exemption No.340 (Bluecurrent Assets NZ Limited)) Exemption Notice 2024
- Amendment to Electricity Industry (Exemption No.330 (Intellihub Limited)) Exemption Notice 2023
- Amendment to Electricity Industry (Exemption No. 331 (Wellington Electricity Lines Limited)) Exemption Notice 2023