Contact is looking to bolster the security of New Zealand’s electricity market with a first-of-a kind concept that could benefit wholesale market customers, in particular electricity retailers.
New Zealand is facing energy challenges due to constrained gas supply and unseasonable weather impacting intermittent renewable energy generation.
To help ensure certainty of supply at peak times, in July Contact started developing a 100-megawatt (MW) grid-scale battery at Glenbrook in south Auckland, due to be operational in March 2026. Contact also has consent to build another 100 MW battery in Stratford, Taranaki. Both batteries will store excess electricity, and rapidly discharge this electricity to the grid when it is needed for up to two hours.
Contact is now exploring the possibility of using its batteries as a market-wide, intra-day storage (or “tolling”) service to share the benefits with others in the market. In addition, Contact is looking at offering half-hourly spot price “caps”. This would allow wholesale market customers to cap the price they pay for electricity at peak times.
Today [7 August] the company released an Expression of Interest (EOI) inviting wholesale market customers to give their feedback on the two proposed concepts. If there is significant interest, Contact may issue a formal Request for Proposal later this year. The earliest possible start date for these proposed products is early 2027.
Mike Fuge, Contact’s CEO, says flexible sources of renewable energy generation and storage will be increasingly needed as electricity demand continues to grow, and they will create a meaningful contribution to the decarbonisation of New Zealand’s electricity market.
“A resilient nationwide energy supply requires a team effort from the industry,” says Mr Fuge. “With the development of our first grid-scale battery, Contact is looking to share the benefits batteries provide with other players in the market.
“This proposed service would enable organisations in the electricity market, like retailers, to store electricity during periods of low usage, and then they could access it to sell to customers when demand is high. This is a new and valuable form of risk management for the market. Not only will this help with energy supply, but it also supports a competitive electricity market and the development of intermittent forms of generation like solar and wind.
“We think it’s a good idea, and we want to see if the market agrees. If there is an appetite, we will look to explore the concepts further.”
Contact is asking for interested parties to provide feedback to RFP_bids@contactenergy.co.nz by 5pm on 30 August 2024.
Lotty Hird
Senior Communications Advisor
M: 027 207 8684
E: lotty.hird@contactenergy.co.nz
Contact Energy is one of New Zealand’s largest energy generators and retailers. We have more than 600,000 customer connections with electricity, gas, broadband and mobile plans. We are committed to leading the decarbonisation of New Zealand, and it is our vision to create and contribute to a better place to live; from the homes and communities we live in, to the land and resources that future generations can enjoy.
We are a member of the Dow Jones Sustainability Index Asia-Pacific (DJSI Asia-Pacific), which is a global benchmark for corporate sustainability, and winners of Sustainability Leadership Award at the 2023 Deloitte Top 200 Awards.
Website: contact.co.nz More information can be found in Contact’s 2023 Integrated Report