Multiple Trading Relationships
Ara Ake is leading a programme of trials and research considering how Multiple Trading Relationships might benefit New Zealand households, businesses and communities, and help to integrate distributed energy resources into the electricity system.
What Are Multiple Trading Relationships?
Enabling Multiple Trading Relationships (MTR) in New Zealand would give consumers the option to contract with more than one supplier for electricity services at their home, organisation or business. This model offers flexibility without requiring significant changes to existing electricity metering setups.
Multiple Trading Relationships are ultimately about consumer choice and increasing competition to supply consumers with behind-the-meter energy services. However, current regulations, designed during an era when electricity flowed unidirectionally from large generation sites like hydro power stations to consumers, do not support this innovative model.
As more households, organisations and businesses adopt technologies such as rooftop solar panels, household battery storage or electric vehicle chargers, electricity flows are becoming more multidirectional. Consumers are now able to meet some or all of their electricity needs locally and even supply energy back to the local grid. This highlights the need for regulatory changes to accommodate these opportunities.
Since 2021, Ara Ake has supported several MTR trials as well as targeted research into the costs and benefits of enabling the model within the New Zealand electricity market.
Multiple Trading Relationships - emerging use cases:
- Virtual Power Plants (VPPs): New business models like VPPs can manage behind-the-meter devices and provide demand management services, supporting local network congestion and smoothing demand peaks. For example, a VPP could aggregate and manage decentralised household storage and solar panels across hundreds or thousands of home, offering customers competitive rates for the electricity they export to the grid.
- Community Energy: Communities can benefit from local renewable energy generation and storage without being tied to a single electricity retailer. Our trial with Kāinga Ora to share the benefits of solar panels installed on social housing in Wellington is an example of this use case.
Multiple Trading Relationships pilot programme
Ara Ake has two pilots underway to test the benefits of MTR:
- Kāinga Ora Multiple Trading Trial: The Kāinga Ora Multiple Trading Trial is now live in the Wellington region. Find out more on the project page.
- Franklin Energy Sharing Trial: Ara Ake is scoping a pilot with partners Climate Connect Aotearoa and Counties Energy, with the intention to set up a community battery trial in the Franklin region, South Auckland.
- Unlocking Potential of Community Batteries in New Zealand report: With support from Ara Ake, Climate Connect Aotearoa commissioned research on Australia's community battery programme, different ownership models and application for the New Zealand context.
While MTR can facilitate community energy sharing, it differs from "energy sharing." Energy sharing typically involves the transfer of value associated with buying/selling electricity between parties.
MTR is not necessary for all situations to enable sharing. For example, energy sharing could be achieved with a single retailer if it is willing to collaborate and find a mutually acceptable solution together, though all participants sign up for a plan with the identified retailer.
It’s also possible to share energy via embedded networks or the behind-the-meter technology, such as the technology that trial partners Kāinga Ora introduced from Australia, Allume SolShare.
There are also financial options to share the benefits that can be managed without retailer involvement, such as providing a cheque to community members each month/quarter via a charitable entity.
To fully realise the benefits of MTR and community energy sharing at scale, regulatory changes are essential. Although some forms of community energy sharing are possible under the existing regulatory framework, adjustments to the electricity regulations could make these practices more accessible and widespread.
Energy Sharing Alternative Models in New Zealand
The following Ara Ake-backed innovators have developed energy sharing models that comply with the existing electricity market regulatory settings. Take a look: