The next chapter starts here: a refreshed strategy for electrification

The next chapter starts here: a refreshed strategy for electrification

For more than a century, we have helped power Auckland's growth, evolving alongside the city we serve. The next chapter will be shaped by electrification, with more homes, businesses and vehicles relying on electricity. Meeting the rising demand for power will require a smarter, more flexible and more efficient energy system than ever before.

In response, we have launched a refreshed strategy focused on electrification.

The strategy is designed to make it easier for Aucklanders to take advantage of electric technologies, while supporting a smarter and more efficient energy system.  For many households and businesses that could mean lower-cost ways to power their homes and operations over time.

For example, a fully electric home with solar panels and an electric car can be cheaper to run than a typical home today.

Group chief executive Chris Blenkiron said electrification would be one of the largest and longest-running infrastructure transitions Auckland has undertaken.

“Electrification has the potential to lower the overall cost of energy for Auckland households and businesses. Our role is to help make that possible,” he said.

“That starts with getting more from the electricity network we already have, using better data and smarter planning to invest in the right places, and only building new infrastructure where it is genuinely needed.

“Electrification will require investment in the network, but success won’t be measured by how much we spend. It will be measured by how effectively we invest and how productively we use the infrastructure we already own, so we can prepare Auckland for a more electric future while keeping costs down for customers.

“That approach isn’t new for us. While investment in Auckland's electricity network has continued to grow, the Vector portion of an average household electricity bill has barely changed in real terms over the past decade”.

One of the biggest parts of our strategy is transforming the way we run the electricity network. As Auckland’s demand for energy increases, we are using better data, technology and new ways of working to get more from our assets.

By having a clearer picture of how electricity is being used across the city, we can make better decisions about where upgrades are needed and where existing capacity can be used more effectively. That will help us avoid unnecessary costs and help keep electricity as affordable as possible for customers.

It will also create new opportunities for customers to benefit from flexibility, such as shifting electricity use away from peak periods in return for incentives that could lower energy bills.

This transition is already underway: we now receive detailed smart meter data for around half our customers and plan to reach 95% by 2031. This will help us understand better the demand across the network and where we should focus our investment. Already, more than 2,500 households are participating in flexible energy programmes.

The strategy also creates two new businesses that will sit alongside and strengthen our core electricity distribution business. Together they will help remove barriers to electrification and support the infrastructure needed as Auckland continues to grow.

The first is called Nexos and will draw on our experience delivering electricity infrastructure across Auckland. It will help provide some of the major connections needed for new generation, industrial development and electrification.

The second is called Catalyst and will start by helping commercial and industrial customers electrify. This could include replacing fossil-fuelled equipment with electric alternatives, or deploying solar generation, batteries and other energy technologies.

Both businesses will operate separately from our regulated electricity distribution business, with their own management teams and governance arrangements. We will take a measured approach to investment, pursuing opportunities where we see strong potential while maintaining financial discipline.

Mr Blenkiron said: “The energy system is changing, and Auckland is changing with it. Our strategy is about making sure Aucklanders can benefit from that change, while keeping a close eye on affordability and making the most of the infrastructure and expertise we already have.”