Estimating the Technical Potential for Residential Demand Response in New Zealand

Abstract

This report estimates the maximum technical potential for demand response (DR) for three appliances in New Zealand’s residential sector. On-demand electricity load reduction, particularly at times of peak demand, enhances the system operationality and reduces stress on the utility grid. This is increasingly important as the supply of variable renewables, such as solar and wind, increases. We focus on heat pumps, hot water heaters and refrigerators and find that DR could reduce load during the winter morning peak period by 20% and by 18% in the evening. This equates to an average daily energy reduction of 5,100 MWh in the morning peak and 4,900 MWh in the evening peak. In the summer, less utilisation of heat pumps in the morning peak decreases this proportion to 15% and 14% in the evening. In combination, the appliances modelled could provide a maximum aggregated demand response of 1,600 MW in the winter morning peak, and 1,200 MW in the evening peak. This technical potential amounts to roughly 2.5 times Transpower’s pro- posed DR programme of 635 MW from both industrial and residential sources and so could offer a substantial additional demand response source.