Technological changes disrupting the energy sector: Vector

Friday, 24 February 2017

Vector chief executive Simon Mackenzie says electricity consumption will keep reducing.

A platform where people can buy and sell excess electricity from one another is just one of the innovations Vector is turning to as technology disrupts the energy sector.

The energy infrastructure company said on Friday its after-tax profit for the six months to December 31 was $107.1 million, up from $65.1m last year.

Vector says technology is disrupting the energy sector.

Strong growth in Auckland had driven the result, as well as a $15m gain following a court ruling in favour of its tax treatment relating to the Penrose to Hobson St tunnel in Auckland.

Vector chairman Michael Stiassny said the company was embracing technological changes to the energy sector.

* Households using less power a challenge for electricity industry: Vector**

It had completed the transition of the sale of Vector Gas, commissioned a new network battery, expanded its smart meter and in-home battery fleet, as well as expanded electric vehicle charging infrastructure.

'We are doing this to ensure the ongoing relevance of our energy networks, to create solutions for our customers, and to create new opportunities for growth.'

Vector chief executive Simon Mackenzie said the company had been on an innovation path for at least eight years.

In that time, electricity consumption had decreased about 11 per cent, what he called a 'reasonably significant amount'.

So while the company added customer numbers equivalent to more than one-and-a-half times the size of Ponsonby, consumption was pretty flat.

Businesses had also got more efficient as they focussed on sustainability, he said.

'It's just going to continue to reduce, at what rate is debatable.'

Mackenzie said the trend of more people converting to LED lighting was also a big driver in the drop, as well as appliances being more efficient and the increasing prevalence of solar power.

You could reduce your electricity usage by about 80 per cent by using an LED light in place of a 100 watt light bulb.

Vector was also running a trial with some of its staff looking at the possibility of a peer-to-peer electricity trading platform.

Mackenzie said this was still at a reasonably early stage, but had been used overseas for people to sell excess electricity between each other in apartment blocks.

It would basically allow businesses and people who had excess energy, possibly through solar generation, to sell it to others, rather than back to the market.

'That would improve the economics of investing in solar and other things.'

The company declared an interim dividend of 8c a share.