The New Zealand energy sector has seen significant progress with a successful pilot by Ara Ake and SolarZero involving the management of winter peak energy demand. The programme, using revolutionary Virtual Power Plant (VPP) technology, was able to harness 30 megawatts (MW) of solar energy from 10,000 homes across the country. This innovative approach to energy management not only addresses issues of power loss during the winter but suggests potential for maintaining power during climate change-related disasters. The success of the pilot has led to changes in the Electricity Industry Participation Code, set to take effect on 1 March 2024, aimed at reducing barriers to the technology.

The pilot began in May 2023 as a collaboration between Ara Ake, a future energy centre, and SolarZero, a solar and battery as a service provider. Also involved were the Electricity Authority and the national grid's system operator, Transpower. The pilot combined the strength of distributed energy resources (DER) from 10,000 homes, all equipped with solar and battery storage, and managed them collectively using VPP technology. As a network of individual resources located in different places, this approach demonstrated the capacity of the VPP to generate, store, distribute and manage power collectively, as well as share the benefits of such system.

The technology enabled SolarZero customers to collectively generate and feed back up to 30MW into the grid during high demand periods. "During Cyclone Gabrielle, our technology proved that solar and batteries can keep the lights on at individual houses... we have now proved that solar and batteries can help keep the lights on at the national level during times of extreme electricity demand," stated SolarZero Chief Executive, Matt Ward. Concluding that the pilot was a result of innovation, hard work, and fruitful collaboration, Ward stressed the need for market mechanisms and regulatory environments to enable and empower consumers with this advanced technology.

The initiative stands out as a successful example of collaboration driving forward innovative solutions to meet real challenges, such as security of supply during winter peak seasons. Dr Cristiano Marantes, Chief Executive of Ara Ake, believes that the lessons and insights obtained from the pilot can encourage further development of a more sustainable, resilient, and affordable energy system.

Despite no severe supply periods during the pilot sufficient to trigger the dispatch of the SolarZero VPP, testing did confirm that the product was market-ready and primed for activation to offer electricity back to the national transmission grid. Transpower Executive General Manager Operations, Chantelle Bramley stated that as the operator of the national power system, they encourage greater industry investment in flexible resources like DER for a quick response during tight power situations.

The amendments to the Electricity Industry Participation Code following the pilot will benefit load aggregators by reducing barriers to participation. The initiative has revealed crucial learnings to be taken into consideration for integrating DER as part of the electricity market, such as determining the greatest value for DER. This will require ongoing engagement across the industry.