Following changes made by the Electricity Authority to the way transmission costs are allocated between New Zealand’s energy consumers, Vector will no longer use its existing hot-water load control system proactively to minimise load on Transpower’s transmission network during periods of peak demand.
 
This is because the changes made to the transmission pricing methodology (TPM) by the Electricity Authority remove the incentive for distribution businesses to do this. Instead, greater reliance is being placed on real-time wholesale electricity prices to signal when demand should be controlled and more generation made available.
 
Vector’s load control capability will remain available, for now, to respond to instructions from Transpower during grid emergencies.
 
Further information for market participants
 

• In past years, Vector has controlled demand for electricity by hot-water cylinders on the Auckland network in the periods with the highest demand for electricity across the upper North Island

• This has meant that demand on the national transmission network during winter peak periods has been in the order of 40-60 MW lower than it would otherwise (0.6%-0.9%).

• The ripple control system operates by sending high-frequency signals across power lines to ripple relays in consumers’ homes. The next generation of smart hot-water control systems use modern communication methods, such as the cellular network or internet.