Big benefits from reducing peak energy use

Reducing electricity demand at peak times is again shown to be a key opportunity for New Zealand to limit the need for more electricity infrastructure spending, and reduce emissions.

A report commissioned by the Energy Efficiency and Conservation Authority (EECA) shows cutting peak demand on winter evenings* would have the biggest impact, as this eases pressure on electricity lines networks and expensive, carbon-intensive peaking generation.

It estimates about half of electricity lines companies’ costs lie in maintaining the network capacity to deliver electricity at peak times, and that significant areas of potential efficiency gains have yet to be made.

The Concept Consulting report estimates that greater uptake of energy efficiency measures that reduce the peak shape of household demand could readily** reduce the overall cost of supplying electricity to New Zealand households by $30 million per year.

With government targets of 100 percent renewable electricity by 2035, and net zero emissions by 2050, there is an increased focus on how that can be achieved.

EECA’s Chief Executive Andrew Caseley says energy efficiency can play a key role.

“We know there are lots of opportunities currently being lost when it comes to electricity efficiency and this report details the savings that can be made.”

The report points to more efficient lighting, such as LED lamps, and greater uptake of heat pumps for space heating, as measures that would make the biggest difference to reducing peak residential electricity demand.

It says most household consumers aren’t receiving price signals to encourage efficiency at peak times, or to reduce carbon.

It also says many consumers don’t make good efficiency decisions because of choice overload, or “present bias” where people resist the upfront costs despite the long term benefits.

An example is LED lamps, which cost more to buy than an incandescent bulb but have far lower running costs, last considerably longer, and with current pricing structures can save householders $75 in electricity costs over the lifetime of the lamp.

“There’s no doubt that switching to LEDs and efficient heating is a great way to cut electricity demand at peak times and ease pressure on networks and suppliers,” says Mr Caseley.

The report also highlights the emerging issue of electric vehicles; how charging vehicles during peak demand periods could add to pressure on the system.

“With an increasing number of electric vehicles it will become more important for EV owners to recharge outside of peak times when possible.”


 Concept electricity efficiency report [PDF 1.2MB]


*Peak electricity demand in the report is defined as 5pm – 8 pm on weekdays in June, July and August

**Potential of energy and emissions reductions

Realisable: A subset of economic potential which takes market and adoption barrier constraints into consideration and reflects real-world estimates if energy efficiency programmes or technology uptake incentives are put in place

Economic: The overall impact if all energy use and technology uptake decisions result in minimisation of all-of-life costs and what could be achieved economically assuming there are no market and adoption barrier

Technical: Reductions possible from all available technologies and measures irrespective of whether they are cost-effective or subject to market barriers.

Media enquiries:

Liz Banas, Strategic Communications Advisor, EECA

Phone: 027 597 0988