Smart power use could cut bills and save $3 billion, EECA study suggests

Tuesday, 27 January 2026

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Encouraging consumers and businesses to switch more power use to off-peak times could reduce by $3 billion the cost of investments that need to be made in the electricity system, the Energy Efficiency and Conservation Authority says.

EECA said the first detailed study of its kind had found that peak-time power use could be cut by a quarter if “modern technologies” were fully exploited.

“The ability to shift load on the network is up to five times more than we expected,” chief executive Marcos Pelenur said.

Reducing peak demand would mean less investment had to be made in electricity transmission and lines infrastructure.

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It would also help reduce reliance on more expensive gas-fuelled generation that is often turned on to meet peak morning and evening demand, with corresponding gains for the environment, he said.

EECA’s report, commissioned from US-based consultant Jacobs, suggested the majority of major power users would be willing to shift some of their power demand in return for the right incentives.

Retrofitting hot-water heaters and heat pumps with smart systems that made it easier to optimise the times they used power was a “low effort” way to shift household electricity use off-peak without affecting people’s lifestyles, Pelenur said.

“Early EECA testing in household settings shows low-cost, ‘smart systems’ can deliver immediate efficiency gains and reduce bills by about 16%.”

Electricity companies have long used hot water ripple control systems to manage some peak-time loads, and it will be mandatory from June for electricity firms to offer customers the option of so-called “time of use” plans that incentivise off-peak use.

There are also a raft of companies developing innovative technologies to try to encourage that.

These range from “smart” home switchboards being manufactured by Kiwi-founded start-up Basis, to home batteries often bought in conjunction with solar systems, and more modern takes on ripple control that allow hot-water heating to be controlled remotely by power retailers or lines companies.

However, the Sunday Star-Times reported in September that it did not appear to be anyone’s job in the industry to measure whether peaks and troughs in demand were smoothing out over time, or to determine exactly what needed to be done to encourage that.

Lines company Vector reported then that ill-constructed time-of-use plans had been having a perverse effect on parts of its network by creating new, higher peaks in demand shortly after 9pm, when prices commonly dropped.

Chief executive Simon Mackenzie said it had seen a “shifting of demand, but not a ‘smoothing’” following the introduction of time-of-use plans, with peak power demand simply shifting from the usual 6pm to 8pm window.

Margaret Cooney, chief operating officer of electricity retailer Octopus, said the next challenge was “getting the incentives right”.

It would be helpful if lines companies followed electricity retailers in introducing time-variable charges to reward customers who gave them some control over their power usage, she said.

Jacobs said one of the big barriers to greater progress was the lack of standardised communication protocols between electricity appliances and energy management systems.

“While smart meters have been widely deployed in New Zealand, the uptake of other technologies such as home energy management systems, smart thermostats, and controllable loads remains low.”

Despite the encouraging findings of its study, Jacobs said most industrial respondents indicated that their operations were “not sensitive to electricity prices and must continue regardless of energy costs”.

That “production-first mentality” limited their willingness to take part in demand management, it said.

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