IEA DSM workshopStephen Drew17 March 2014

2

Setting our benchmark

IRB world ranking

TeamYear of first

testMatches Won Lost Draw %

1 New Zealand 1903 512 390 104 18 78

2 South Africa 1891 428 272 135 21 66

3 Australia 1899 563 287 260 16 52

4 England 1871 671 360 261 50 57

5 Ireland 1875 634 266 337 31 44

6 Wales 1881 660 340 292 28 54

7 France 1906 701 385 284 32 57

8 Samoa 1924 194 94 95 5 50

9 Argentina 1910 375 205 160 10 56

10 Scotland 1871 631 266 333 32 45

Our All Blacks lead rugby like our Interruptible Load leads DSM

3

Middle of Middle Earth

Hydro lakes

We are top of the South Island “electrically”

Auckland

DR – Lower North Island –

20MW

Wind

Renewable generation

HVDC

Geothermal

HVDC Pole 3

Wellington

4

Our grid’s inertia is changing

Normal flow Maximum flow

Power flow (MW) 850 1050

Bi-pole cover (MW) 500 500

HVDC Reserve risk 350 550

CCGT Reserve risk 385 385

Contingent Event risks are increasing the speed that they can happen

3 CCGT’s385MW

AluminiumPacific Aluminium (Tiwai Point)

600MW

NewsprintNorske Skog (Kawerau)

80MW reserve

HVDC1050MW

S N transfer

= Contingent Event which sets the reserve risk

Poles #2 and #3 operating on the HVDCStratford

Otahuhu

Huntly

5

Our proud DSM history in New Zealand

• 1950’s - All State hydro, £5/kW demand, ripple hot water to manage peaks

• 1960’s - prices in c/kWh to support coal station(s) for dry years, pole #1, steel and pulp&paper begin production

• 1970’s – Huntly (coal) and natural gas, alumimum starts production

• 1980’s – ECNZ and power boards – central price control

• 1989 - NZSteel melters became the first load to provide reserve to the HVDC transfer

• 1990’s – 1992 was a bad dry year, ECNZ split, CCGTs arrive and 1996 wholesale competitive market begins with 6s and 60s reserve products, Total Metering (EI) develops algorithms for fast frequency response

• 2001 – next bad dry year but DR fails to take-off and goes “on-hold” even though first customers respond to prices on a Demand Exchange

6

Our DSM story started in 2007 here in Wellington

Technology commercialised as our Smart Grid Terminals

Pilot at Wellington Port Coldstore (300kW in SIR)

Wellington Port Coldstore

100MW target set to break even

Then in 2009

7

We can now offer more than 200MW to the reserves market

Where we are in 2014

We have a diversified portfolio (large industry,

commercial and residential hot water)

8

Our IL is fast, in fact very fast

We can respond very fast and very reliably as a

portfolio

9

Our international league table in our EnerNOC world

DSM Country Programme Features Weighting

Frequency Response

New Zealand

Canada

IL*

LSSi Alberta

<1s, 1s data, medium [MW]

<0.2s, 20ms data, small [MW]

BalancingCanada

United States

Ontario regulation

BPA pilot

Real-time, small +/-MW]

10min, small [+/-MW]

Capacity markets

United States

Australia

PJM

WA

Complex >2h, very large [MW]

>2h, medium [MW]

Network DRAustralia

UK

NSW

DNOs (low carbon fund)

Summer peaking, small [MW]

Winter peaking, small [MW]

*New Zealand - IL was recognised by PLMA with “Outstanding Program Achievement” award in 2011

10 10

And what of the future – Thermal Energy Storage

11

Welcome to our world in Wellington