Electricity Asset Management Plan 2019-2029
13 Vector Limited://
EXTERNAL TRENDS
VECTOR’S OPERATING ENVIRONMENT
1 Shifting customer base, preferences and expectations 2 Climate change adaptation 3 Changing geopolitical and regulatory landscape
Auckland Growth
ENVIRONMENTAL (market/customer)
Energy Consumption
Safety Always, Because Lives Matter
4 Rising income and wealth disparity 5 Auckland affordability 6 Increasing skilled labour shortage
Cost of Operating in the Auckland Region
SOCIETAL
New and Emerging Technologies
7 Rapidly evolving technology and digitalisation 8 Dynamic cyber threat landscape 9 Rise of Artificial Intelligence 10 Hyper-transparency and speed of social media
Changing Customer Needs
TECHNOLOGICAL
Sustainability
Labour Market Dynamics
Regulatory Compliance – Price/Quality
Figure 1-2 Key macro-economic external trends shaping Vector’s operating environment
AUCKLAND GROWTH Auckland’s population is expected to grow by the size of Tauranga city every three years 4 . Auckland Council estimates the city will have two million residents by 2028, which is a five-year average annual growth rate of more than 20 per cent. Because the city is set to swell, investments in civil infrastructure projects will need to grow too, by more than 30 per cent just over the next five years. Vector’s core focus is to balance our complex regulatory, operating and customer expectations in a time of unprecedented growth and other challenges such as affordability. As Auckland continues to grow, it is essential that we continue to evolve our network infrastructure, operations and investment strategies to reduce the impact of network outages for customers. INFRASTRUCTURE DEVELOPMENTS Whether a development project is as significant as the Light Rail Project, or as small as a suburban sub- division, Vector must understand its impact on the network and ensure customers remain connected to a reliable, affordable and resilient supply of electricity. Right now, new ICP (installation control point) connections, as well as projects to relocate existing network assets to accommodate growth, are at an all-time high. This presents a mix of challenges and opportunities for New Zealand’s fastest growing city. Vector is embracing a broader range of network extension and augmentation technologies that will enable us to grow the network to meet the needs of customers. Beyond traditional
solutions, like poles, wires and substations, new network options like microgrids and battery systems can, in some cases, deliver a more resilient electricity service for customers without the need to invest in traditional assets, that typically have longer lives and could burden future generations if they are no longer needed. While traditional physical assets will form the backbone of our network for decades to come, we will continue to look at how alternative options can – and should – be used to build a network that is in the long-term interests of Aucklanders. CONSUMPTION TRENDS Energy consumption rates across Auckland’s 1.4 million residents is trending down on average, while overall network peak is increasing, as the number of connections continues to grow. Since 2005, the average level of energy used per residential connection has declined by about one per cent every year however since 2012 network peak has grown by seven per cent. Vector must invest in its network to ensure a reliable supply during the peaks in demand. We are incentivised to manage or ‘cap’ them as best we can. It is unclear where Auckland’s consumption trends will head next but it is expected that this trend will flatten or reverse as EVs become more commonplace. Whatever happens, in today’s world there is no excuse for not making data driven decisions in response to such trends. Therefore, Vector is boosting its ability to better
4. http://archive.stats.govt.nz/browse_for_stats/population/census_ counts/2013CensusUsuallyResidentPopulationCounts_HOTP2013Census.aspx And, Auckland Plan 2050, updated June 2018.
Made with FlippingBook - professional solution for displaying marketing and sales documents online