Everyday people deserve a seat at the energy table

Decisions about powering Aotearoa are largely shaped by generators, retailers, regulators, and lines companies - the organisations that built and operate our electricity system. For decades, this model delivered a reliable supply of energy, but the system was designed in an era when households, schools, and small businesses were viewed solely as end-users of electricity, and energy demand stayed relatively static.

Times have changed and cracks are showing. 

If we’re to build a cleaner, affordable and reliable energy system, the system must evolve to include everyday energy users.

The pressure (and cost) is mounting

As Aotearoa moves toward electrification, electricity demand is climbing and putting pressure on a strained grid. Peak demand events are becoming more extreme, capacity constraints are causing brownouts and outages, and upgrading transmission and distribution infrastructure is estimated to cost around $100 billion over the next 25 years.

The standard response has been to build more and build bigger. This approach served us well in the past, but it’s 20th century thinking. Relying on large-scale infrastructure expansion is expensive, carbon-intensive, and achingly slow to deliver. And it ignores the new distributed system growing around us. Unfortunately, the smaller distributed sources of generation and storage (like rooftop solar and batteries) are entirely out of reach for the majority of the population. Even with battery prices dropping, this is unlikely to change.

The good news is that there’s another resource we’ve barely even begun to tap into: the surplus energy that’s embedded in everyday life: energy flexibility. Thousands of homes, schools, and businesses run appliances that could help support the grid - today. With the right tech and system design, everyday consumers can participate.

Appliances like heat pumps and space heaters could reduce pressure during peak demand, delay or avoid expensive infrastructure upgrades - as long as energy users to are fairly rewarded for their contribution. The shift in demand of a single appliance might seem insignificant. But at scale, this can easily deliver serious impact. Transpower estimates that every gigawatt of peak demand avoided would collectively save consumers approximately $1.5 billion.

Why everyday consumers are still locked out

Large industrial users of energy, like aluminium smelters and factories, have long participated in demand response programmes that help balance the grid, and been paid for it. But residential users, which collectively account for a hefty 32% of New Zealand’s electricity use, have had few to no opportunities to participate. Not to mention thousands of small to medium businesses. Not by deliberate exclusion, but as a result of a market historically structured around large-scale participants.

For smaller users, participation has sometimes meant changing routines, tracking graphs, or manually adjusting appliances. Actions that are difficult to sustain at scale. While people may respond to price signals like higher peak-time rates in the short term, meaningful behaviour change tends to be temporary. Studies time and again have shown that consumer-initiated behaviour change is difficult to sustain. Let alone those who do shift work or have family commitments where changing their own energy use simply isn’t compatible with how they live.

So what does the solution look like? Let’s focus on ways to automatically shift when energy is used, without compromising comfort or convenience. For example, a heat pump might pause briefly during a peak demand period and resume minutes later without any noticeable change in temperature. Multiply that across thousands of homes and businesses, and the impact on grid stability could be massive.

It’s people-centred, low-friction participation that’s key to unlocking the full potential of energy flexibility, and will ensure the benefits are shared by everyone.

Fair recognition matters

Participation in energy flexibility should come with fair recognition, not just vague promises of “doing the right thing.” Factories and industrial customers are compensated. So when households help maintain grid stability, they should share in the benefits too, without having to sacrifice comfort or the necessities of life.  

Achieving an equitable and functioning grid is a delicate balancing act. We have to be alert to corporate greed eroding the ability to achieve equilibrium. Unless we achieve this balance, the system will work for no one.

A stronger, smarter system for everyone

We’re at a pivotal moment in New Zealand’s energy journey. Building a sustainable future will require new thinking, new market models, and partnerships that make it easy and worthwhile for all consumers to participate.

By inviting households, schools, and small businesses into the system as participants, and making it easy for them to contribute without disrupting their daily lives, we can tap into a flexible, responsive, and highly scalable resource. This shifts the balance toward a more inclusive energy future. We can create a grid where everyone plays a role in shaping a cleaner, affordable, and more resilient energy system, and consumers have a genuine seat at the energy table.