Ara Ake Chosen To Administer New $20 Million Distributed Flexibility Innovation Fund

Ara Ake, Aotearoa New Zealand's Future Energy Centre, will help run and administer the government’s new Distributed Flexibility Innovation Fund to support the electricity system to manage demand.

“This $20 million fund from Budget 2023 will support innovative technologies and systems to better manage peak electricity demand and improve reliability and resilience at the network level,” Energy and Resource Minister Dr Megan Woods said.

“We are preparing the electricity system to be able to play a lead role in the energy transition to net zero 2050.

“As we work to scale up renewable electricity, how demand from consumers is managed will become critical to ensuring power is affordable and reliable as we transition,” Megan Woods said.

The Distributed Flexibility Innovation Fund will allocate $20 million over the next four years to support innovative demand response systems.

“As we continue to electrify our economy, this fund will open the door for projects testing new ways of responding to changes in electricity demand to support system-wide improvements,” Megan Woods said.

Projects will have a focus on collaboration to facilitate new solutions, and recipients will be expected to share key insights to improve knowledge across the wider industry and government.

Examples of the types of projects that could be eligible for this fund include:

• virtual power plants that harness the power of numerous solar and battery units to meet demand
• smart tech to control how household appliances use power at peak times
• ways of coordinating electricity use by businesses that have the flexibility to reduce or turn off some of their power.

Final decisions on projects will be made by a cross-government group led by MBIE and made up of specialists from relevant agencies. The role of Ara Ake will be to coordinate the application and selection process, make recommendations to the cross-government group and monitor the progress of funded projects.

“As an independent organisation with deep connections and expertise across the energy ecosystem, we’re perfectly placed to administer this fund. This is a very exciting initiative to be part of and one we know will drive further innovation, improving the equitability and resiliency of our electricity sector,” Ara Ake Chief Executive, Dr Cristiano Marantes said.

“When the Government announced the end of new offshore petroleum exploration permits in 2019, we embarked on a Just Transitions Partnership with Taranaki where energy is a large part of the local economy. This involved establishing Ara Ake to facilitate opportunities with businesses and innovators to increase the uptake of new technologies with the aim of accelerating the energy transition through innovation.

“Since 2020, Ara Ake has built the required strong sector networks to take on this role that will help us in the transition to a more sustainable, resilient and equitable energy future,” Megan Woods said.

The fund builds on government actions to support the resilience, reliability and security of the electricity sector, including:

• new measures to better manage winter peak demand electricity risks implemented by Transpower and the Electricity Authority
• work to strengthen national direction for new renewable electricity generation and electricity infrastructure
• the National Resilience Plan to support strategic investments in infrastructure including electricity transmission,
• consultation on measures to support transition to an expanded and highly renewable electricity system
• and the existing Community Renewable Energy Fund (for which Budget 22 allocated an extra $30 million).

The Distributed Flexibility Innovation Fund is expected to open for applications by early 2024.

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