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Politicians considering the Electricity Industry Bill are being urged to provide for development of a "smart" electricity grid.
Parliament's Commissioner for the Environment, Jan Wright, told the finance and expenditure committee today that a smart electricity grid was just as important as modern infrastructure like roads and broadband in 21st century New Zealand.
A smart grid would allow the use of digital technology to upgrade the current system, giving much finer control of the electricity supply.
Eventually it would include an intelligent monitoring system to track all electricity flowing in the system, new power lines to reduce the power lost during transmission and make it easier to balance the load on alternative sources of electricity such as solar and wind turbines.
Overseas, smart grids are being developed to re-charge plug-in electric vehicles by spreading the load over eight hours, instead of generators facing a big surge when commuters return home at dinner time - when electricity demand is already at its peak. Some grid operators are even looking at drawing on the power stored in large numbers of plug-in electric vehicles, and replacing it later in the night.
Dr Wright told the committee smarter use of electricity could deliver environmental and consumer benefits.
"Not only would we need to build fewer power plants and emit less carbon dioxide, but smarter electricity use would also give consumers more control over their bills.
"Security of supply would also be greatly enhanced through a smart grid."
Government leadership was needed to resolve industry stand-offs, establish key standards and bring certainty, and the new Electricity Authority should be required to change the "electricity industry participation code" to provide for development of a smart grid.
Outside the committee Dr Wright said that Fisher and Paykel's general manager of electronics design, Neil Cheyne, had observed the development of smart appliances was further advanced than the Government thought, with them likely to be available in one to two years.
"The technology is readily available if consensus is reached. The issue is not a technology one, the issue is that the electricity industry does not know what it wants."