Flexible Energy Supply

Wellington, New Zealand

Resilience Project

Background

The capital of New Zealand, Wellington‘s more than 400,000 residents draw on a long history of resilience, with diverse inhabitants creating strong communities over the past thousand years around a beautiful harbor at the southern tip of the country’s North Island. This setting, however, leaves the city highly vulnerable to earthquakes and severe storms.

Since the magnitude 7.8 Kaikoura earthquakes in November 2016, the city has redoubled its efforts to shore up critical infrastructure – with a particular focus on the central city where the majority of Wellingtonians work, live and play.

A Virtual Power Plant is the combination of numerous distributed energy generation sources (e.g. solar panels on houses) which remain independent in their operation and ownership. Excess power is dispatched back into the grid through a central control unit to enhance the reliability of the overall power supply.

The Action

Wellington’s electricity network is particularly vulnerable to seismic activity. The City applied a resilience lens to its goal of reducing the vulnerability of its energy system to major shocks, and developed a multi-faceted approach that will strengthen its electricity grid, while reducing dependence on centralized infrastructure.

The city realized that much of the vulnerability of its lifeline infrastructure lay in its centralized nature – that is, failure of one part would lead to cascading failure across the whole network.  In order to introduce more flexibility, the City Council worked with Wellington Electricity (supplier), Contact Energy (retailer) and private homeowners to pilot a virtual power plant at the neighborhood scale.  The virtual power plant idea was based on the insight that of homes in New Zealand that have solar panels installed, 90% do not continue to have power during network disruptions.  The city saw an opportunity to pilot virtual power plants in order to both allow homes to keep the lights on and to ease the load on the system during high usage periods.

The virtual power plant systems consist of a set of rooftop solar panels, and storage batteries (starting at 8kW, with the ability to upgrade up to 16kW).  These systems function year-round for the homeowners, allowing them to power even non-emergency needs with a sustainable and low-cost source of energy.

The City applied a resilience lens to its goal of reducing the vulnerability of its energy system to major shocks, and developed a multi-faceted approach that will strengthen its electricity grid, while reducing dependence on centralized infrastructure.

Meeting sustainability aspirations is a major co-benefit to this resilience project – especially where owners have also sought to switch to electric vehicles.

Beyond reducing pressure on the central electricity network, the city set out to enhance the preparedness of the homeowners and their surrounding communities in times of shock. Each homeowner was provided with a ‘resilience upgrade’ pack which included a liquid petroleum gas tank, a 200-liter water tank, and the installation of outdoor electrical charging points. Further, in order to participate in the pilot and receive the subsidized solar panels, batteries, and resilience upgrades, participants had to agree to contact ten neighbors to tell them that their home would be a place of refuge in times of power disruption.

By requiring homeowners involved in the pilot to make connections and build relationships with their neighbors, and installing charging points outdoors or in garages to enable access by those neighbors, the city sought to create a local support network to respond to shock events.

Redundancy

In addition to the virtual power plant pilot, Wellington has also sought to improve its existing infrastructure at the regional scale by investing in the central grid.  These investments include: spare critical emergency hardware, two mobile substations, 19km of emergency overhead power lines, the reinforcement of 90 substation buildings, and improvements to the operations control systems including at least three new data hubs and upgrades to voice radio systems. The cost of these upgrades, estimated at $30 million NZD, has been funded by raising electricity rates an average of $1.50-$1.90 per household. These investments will create a more robust grid that is less susceptible to power outages during a shock, and that is easier to repair in the event of an outage.

The Impact

Virtual Power Plants

The VPP system is already helping to mitigate peak energy demand, with the potential to drastically reduce strain on the grid and decrease the likelihood of disruption and/or power failure. The VPP pilot program has been installed on 24 homes, and the city has set an intention to increase 10-fold, to 250 households.

The 24 households involved in the pilot are already experiencing high cost savings during normal times: one participant’s monthly electric bill has dropped from $850 to $150. The pilot also means that members of 240 households have ready access to emergency power for charging critical electronic devices during power disruptions.

The addition of distributed solar generation and storage capacity sets the city up for the projected increase in demand from electric vehicles, supporting Wellington and New Zealand’s’ trajectory towards net zero greenhouse gas emissions , while making it more resilient to shocks. Finally, by taking pressure off the central grid to supply the energy needs of a growing population, the city can explore a wider range of investment options for its central grid and overall infrastructure over time.

Central Grid Upgrades

To date, upgrades to the central grid, including emergency hardware, mobile substations, and switchboards, have resulted in expected improvements in electricity restoration time across the city, with different locations reducing their likely time for restoration by anywhere from 2 to up to 12 weeks.

Critical emergency spares will reduce outage impacts from cable failure, while the seismic reinforcement of substation buildings will help ensure the equipment contained within them is available for service after an event, and better communications systems will provide back-up should the main telecommunication system fail.

A key innovation of Wellington’s energy resilience work was to recognize that merely installing new infrastructure would not ensure resilience to shocks. These complimentary actions are working to ensure that Wellington’s electric grid is less likely to experience disruptions, that when outages do occur they are shorter and less severe, that communities are able to access emergency power during disasters, and that Wellingtonians have access to reliable energy sources to power their homes throughout the year.

Disruption is inevitable, and a network of connected communities can play a major role in keeping Wellingtonians safe. Yet even in good times, a resilient energy system holds immense infrastructural value for the city. The ability to take load off the electricity network at any time can change the way the city manages its resources and risk tolerance. Linking flexible energy solutions to building stronger, better connected communities delivers multiple benefits to the Wellington and its residents and makes the city stronger overall.  Combined, these efforts will have a profound impact on the city as this project scales.

This Project is Part Of the

Wellington Resilience Strategy

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