Expressions of Interest from electricity retailers for Hot Water Demand Flexibility
Call for Expressions of Interest
Read the full Expression of Interest
Innovative demand-side flexibility initiative will improve energy resilience and can bring additional savings to electricity customers
Counties Energy has today announced it has opened expressions of interest (EOI) for electricity retailers to access its hot water load control capabilities to manage customer’s hot water flexible load.
This initiative represents a significant opportunity to enhance demand-side flexibility on Counties Energy’s network while delivering tangible benefits to consumers and contributing to Aotearoa New Zealand’s evolving energy landscape. By offering hot water demand flexibility to retailers, the service aims to support further resilience, bring additional customer savings and address energy hardship.
Most electricity distribution businesses (EDBs) have the ability to manage electricity directed to hot water cylinders and can turn off electricity to these cylinders during peaks in demand. This capability is a key tool used to manage household electricity consumption during peak demand. Hot water heating typically accounts for around 30% of a household’s electricity use, representing one of the largest flexible loads available for use within the electricity system and an ideal flexibility resource to ease pressure on the electricity system.
Moonis Vegdani, Chief Strategy and Transformation Officer at Counties Energy says the EOI for the service forms part of Counties Energy’s aim to demonstrate its leadership in “active energy orchestration” and allows retailers the opportunity to offer new flexibility-related value to customers.
“We’re committed to proactively working with retailers to unlock the value of hot water flex, benefiting both the grid and customers,” says Moonis. “By collaborating with electricity retailers on this service, we acknowledge the critical role that demand-side flexibility will play in supporting the transition to a low-carbon energy future while also offering a unique opportunity to deliver tangible cost savings for customers and enhancing network resiliency.”
“This initiative aims to deliver meaningful benefits, particularly to households facing energy hardship, by lowering bills and providing new value through innovative retail offerings. By unlocking the potential of demand-side flexibility, we aim to align with regulatory goals to enhance grid resilience, improve system efficiency and support New Zealand’s transition to a low-carbon energy future.”
Through Counties Energy’s smart metering network, electricity retailers will have the flexibility to manage customers’ hot water systems by switching them on or off temporarily during peak times, ensuring both savings and network reliability. Retailers can design tailored propositions incentivising customers to participate in this flexibility service, offering lower electricity rates in exchange for managed water heating during high-demand periods.
Counties Energy’s advanced smart metering technology enables precise ICP-level control of hot water systems without disrupting other household appliances. This approach goes beyond traditional ripple control, leveraging the power of the Internet of Things (IoT) to gather granular data and unlock new value streams through market participation.
“As a 100% consumer-owned electricity distribution company, we’re excited about the possibilities this service presents—not just for retailers but for the end customers,” says Moonis Vegdani.
“Amid the current energy challenges and rising cost of living, the ability to offer more affordable energy solutions while improving grid resiliency is critical. Our research into similar flexibility services suggests that some of our customers could reduce their electricity bills by up to $150 per year.”
As part of this initiative, Counties Energy’s hot water load control infrastructure will be upgraded to enable individual ICP-level control via their smart metering mesh network. This enhancement provides granular, real-time management of significant loads across our network, supporting demand response and energy optimisation. Counties Energy will coordinate with participating retailers to ensure the available load is still available for network management and grid emergencies.
Counties Energy’s hot water demand flex initiative also ties into its broader evolution as a Distribution System Operator (DSO), focusing on energy orchestration and demand flex capabilities. By leveraging its smart meter technology, Counties Energy is pushing the boundaries of what’s possible in New Zealand’s evolving energy landscape. Transitioning to a Distributed Systems Operator (DSO) is how Counties Energy will manage multi-directional energy flow resulting from a growing number of EVs, solar, wind and batteries.
“This initiative provides an opportunity for electricity retailers to participate in shaping the future of demand-side flexibility on the Counties Energy network while delivering innovative solutions that benefit both customers and New Zealand’s wider energy system,” Vegdani explains.
The company’s related work in the DSO space includes the TSO/DSO pilot project with Transpower and the completion of a major milestone in their collaboration with OpenLoop, Europe-based Plexigrid, and Ara Ake, with a further in-field pilot planned for later next year.
Counties Energy is seeking expressions of interest (EOI) from electricity retailers keen to participate in this initiative. Retailers interested in expanding their demand flex capabilities and offering innovative energy management solutions are encouraged to apply.