Electricity

There is a noticeable gap in knowledge in New Zealand: very little is known about household, commercial and industrial electricity demand functions. What is termed electricity demand is simply information about electricity use in various sectors. For example, as far as we know, one does not know how each representative household adjusts their electricity consumption to changes in electricity price, income, and technology. We are exerting substantial effort to get access to data that will enable us to estimate residential, commercial and industrial electricity demand functions; that is, estimated demand responses from residential, commercial and industrial sectors to changes in price, income, technology and exogenous factors (such as weather-related shocks).

Demand responsiveness is one of the gaps in knowledge that have been recognized by industry and the government. We are currently collaborating with the Faculty of Engineering in the formulation of a major grant proposal focused on demand responsiveness to be submitted to the Ministry of Business, Innovation and Employment. In addition, estimated household demand functions will enable us to study current and future impacts of electricity prices on all types of households in New Zealand; hence, we will be able to provide concrete, quantifiable, measures of affordability and hardship, among others.

The following research projects describe our current research efforts.

In this research project, we will initially build a game-theoretic (i.e., strategic supply, demand and regulation) model to adequately capture the structure and market power aspects of the New Zealand’s electricity industry.

The model will enable us to derive testable hypotheses regarding utilization of renewable and non-renewable energy generation sources, price-bidding strategies and demand responses. We will test the hypotheses by employing advanced econometric techniques to collected electricity supply, electricity price, and household, commercial and industrial electricity consumption data. The estimated residential electricity demand shall provide us with key information about income and location, which will be useful in investigating energy hardship and energy security. (Work in progress)

This project is 100% focussed on New Zealand’s energy issues.

Research team: Emilson Silva, Selena Sheng, Le Wen, Lingli Qi, Simon Tao, Stephen Poletti, Erwann Sbai.

The government’s strategic challenge regarding the energy sector’s transition to net zero carbon emissions by 2050 is a strong incentive for the development of innovative, engaging and transdisciplinary research activities. In this project, we will carry research activities that consider alternative pathways to net zero, addressing potential trade-offs in electricity demand responsiveness’ adjustments, portfolio options, pumped hydro, bioenergy, and effective implementation of distributed energy resources. The research will provide improved measures of benefits and costs, including social costs related to energy hardship, for sophisticated cost and benefit analysis and policy recommendations. (Work in progress)

This project is 100% focussed on New Zealand’s energy issues.

Research team: Emilson Silva, Selena Sheng, Le Wen, Lingli Qi, Simon Tao.

Research continues on energy efficiency analysis, with a particular focus on energy use in New Zealand’s industrial and trade, primary industry, and services sectors. (Work in progress)

Research team: Le Wen, Emilson Silva and Simon Tao.

• Optimal charger allocation for inductive power transfer busway network in Auckland 

Inductive power transfer (IPT) systems offer a promising solution to some of the major hurdles associated with electric vehicles, such as the lack of widespread charging infrastructure, driving range anxiety, and significant charging time. With the aid of IPT systems, dynamic charging enables electric vehicles to be charged when running over the IPT power pads. Dynamic charging offers a great opportunity to eliminate charging downtime, increase driving range, and reduce the onboard battery size required to complete the trip. The aim of this study is to minimise the overall cost of charging infrastructure for an IPT charging system by optimising the deployment of IPT transmitters and the battery size required to support the electric charging of bus services. A mixed-integer linear programming model is proposed and solved using the commercial solver Gurobi. Bus route information and the characteristics of an electric bus, such as weight, drag coefficient and frontal area, are collected, which are used as input to run the traffic simulation in SUMO to get time-varying velocity and acceleration data during bus operations. A bus route in Auckland, New Zealand, is used as a case study in the presented numerical experiments. A strong correlation between the velocity of the bus and the state of charge is identified. The largest cost component of the infrastructure is the variable cost of chargers, followed by the battery size.

This is a collaboration with our colleagues from the University of Wollongong, Australia, as well as the Department of Civil and Environmental Engineering, the University of Auckland.  The manuscript has been submitted to Applied Energy and is currently under review. (Complete)

The energy component of this project lies in minimising the overall cost of charging infrastructure by an optimisation system to uplift electric buses.

Research Team: Selena Sheng and Le Wen. 

• Optimization modelling and economic evaluation of IPT implementation

With dynamic wireless charging (DWC), it will be possible to charge wirelessly at high efficiency when driving along selected charging lanes on a highway to keep your battery in a good state of charge and increase your range. Selena’s PhD student Ramesh has finalised a set of survey questions about the DWC roadway system and obtained the ethics. It includes questions on EV experience; Technological consciousness; Environmental concerns; Preferences for using DWC facilities: (charging time, the value of time); Perceived concerns: (related to health hazards, data privacy and power grid stability); Perceived ease of use: Accessibility, flexible mobility, and convenience; Willingness to pay for using DWC facilities; Social norms; Perceived behavioural control; and perceived behavioural control. (Complete)

The energy component of this project lies in the investigation of economic evaluations of IPT implementation from the consumers' perspective.

Research Team: Selena Sheng.

• Economic and environmental benefits of the wireless roadway charging system for electric vehicles: A consumer's perspective

The consumer is at the forefront of modelling economic behaviour and, more specifically, how and whether new technologies are adopted. The purpose of this study is to analyse the perceived economic and environmental benefits of dynamic wireless power transfer (DWPT) technology, otherwise referred to as dynamic wireless charging (DWC), and how that might influence the uptake of electric vehicles (EVs) in Aotearoa - New Zealand. As a result of using discrete choice modelling, an understanding of the way consumers value wireless charging capabilities that allow for dynamic charging was obtained. A variety of logit models, including multinomial logit, heteroscedastic logit, and mixed logit models were proposed to fit the stated preference data. Furthermore, discrete choice modelling allowed us to investigate users’ willingness to pay for the dynamic wireless charging DWC capabilities that can be measured indirectly. The research finding indicated that dynamic charging capability has a significant positive impact on vehicle choice. (Complete)

The energy component of this project lies in exploring economic & environmental benefits of the wireless roadway charging system from the consumers' perspective.

Research Team: Selena Sheng and Le Wen.

Exploration of the nexus between solar potential and electric vehicle uptake: Evidence from New Zealand

Joint deployment of solar photovoltaic (PV) systems and electric vehicles (EVs) offers a sustainable option to decarbonize the economy. However, the possible influence of solar PV on EV uptake within a spatial-temporal framework is often overlooked in the literature. Based on a unique dataset at a detailed spatial level in Auckland, New Zealand, this study explores the potential complementarity of EVs and solar PV using spatial negative binomial regression models. We find evidence of complementarity between solar PV and EV uptakes. Results show that a one-unit increase in the installation of solar PV is associated with an increase in EV uptake count by a factor of 1.021. Household investment in solar PV also has the potential to accelerate EV uptake. Moreover, we find that a one-unit increase in EV charger installation in neighboring areas is associated with an increase in EV uptake by a factor of 41. Charging infrastructure in neighboring areas has a positive impact on subsequent EV adoption. EV technology innovation diffusion can be widely spread. Empirical evidence shows that EV uptake is increased by 1.047-1.049 in response to a one-unit increase in early EV adoption, indicating that the early-adopter phase also positively impacts subsequent EV uptake. The empirical findings provide important insights for
policy aimed at increasing the uptake of EVs.

Research continues on the integration of solar and EV. This study provides policy implications to accelerate the pace of EV uptake given the great renewable energy potential of solar PV systems. (Complete)

The energy component is promotion of joint deployment of Solar PV and EVs.

Research team: Le Wen and Selena Sheng.

This research project will study and compare different transport electrification scenarios (pathways) for the period 2023-2050. The study will consider various combinations of light-and heavy-vehicle technologies (internal combustion engines, hybrid and electric) for multiple types of energy input (electric, biofuels and fossil fuels), consistent supporting infrastructure for efficient charging and fuelling, expected costs of vehicles and expected utilization of the various vehicle types. We will consider a scenario with hybrid electric-ethanol vehicles included in the mix of vehicles. We will use the TIMES model to derive the values for various economic variables that will enable us to conduct a social efficiency analysis (which includes private and social costs) and select the pathway that maximizes social efficiency. (Work in progress)

This project is 100% about energy utilization in New Zealand.

Research team: Lingli Qi and Emilson Silva.

The sleeping giant on New Zealand roads: Impact of non-tailpipe emissions on local air pollution.

Road traffic is a major contributor to urban air pollution. From an environmental perspective, electric vehicles (EVs) are considered a better transport alternative compared to petrol- or diesel-powered cars, thanks to their capabilities to reduce tailpipe emissions significantly. However, increasing the uptake of EVs within the vehicle fleet may only have a limited impact on improving air quality. As evidenced in many countries, a major share of road pollution is linked to non-exhaust emissions (NEEs) such as dust particles from the road surface, tyres, brake pads and road dust resuspension. Non-exhaust pollution has direct health impacts. By applying spatial econometric models, this project aims to provide a “world first” that explores the nexus between vehicle fleet and non-exhaust emissions, and its implications for human health, using New Zealand-centric data. Our results will deliver a comprehensive understanding of various contributors to road pollution from non-exhaust sources and provide policy recommendations to gain better insights
into how modern vehicle technologies and regulations would impact emissions from the transport sector. (Complete)

The energy component of this project lies in building the basic framework to consider considering benefits and costs (including pollution emissions) of EV uptake in New Zealand.

Research team: Selena Sheng and Le Wen.

• Hydrogen as a fuel for industrial process heat in New Zealand

This paper explores the potential of adopting green hydrogen to decarbonise industrial process heat in New Zealand. Using a detailed dataset, we analyse existing patterns of energy use in the industrial sector, focusing on industrial heat. We develop an integrated energy systems model containing hydrogen production, end-use technologies, and alternative low-carbon technologies. We further develop several scenarios and estimate the least-cost options to decarbonise industrial heat out to 2050 using a range of cost and efficiency assumptions for hydrogen technologies. In most scenarios, the least-cost solution for the system is to electrify most processes. Hydrogen uptake is limited, but some scenarios see hydrogen use for high-temperature process heat. (Complete)

The energy component of this project lies in studying hydrogen as a fuel for industrial process heat in New Zealand.

Research team: Le Wen and Selena Sheng.

• The optimal replacement of existing fleet of heavy trucks with hydrogen trucks

This research aims to develop a total cost of ownership (TCO) model for heavy-duty diesel trucks including hydrogen trucks; analyse the influential factors affecting the fleet owner’s decision to replace the existing diesel trucks with new hydrogen or diesel trucks; propose a cost optimization model while minimising the overall cost of ownership of a heavy vehicle fleet; and run the sensitivity analysis of different governing factors for arriving at the optimal cost of ownership from the fleet owner’s perspective. (Work in progress)

The energy component of this project lies in studying the optimal replacement of the existing fleet of heavy trucks with hydrogen trucks.

Research team: Selena Sheng and Le Wen.

• Exploration of wind energy and green hydrogen production in New Zealand

This study systematically reviews offshore wind and hydrogen production retrieved from the empirical papers, reports from government, industries, and national and international organisations. Sources of cost estimates are further investigated based on assumption and scenario analysis according to the Concept Consulting and Castalia modelling. This study also compares developmental progress overseas to New Zealand, providing insight into what New Zealand can learn from international experience. (Work in progress)

The energy component of this project lies in the exploration of wind energy and green hydrogen production.

Research team: Le Wen, Stephen Poletti and Selena Sheng.

• The dynamic hydrogen economy in New Zealand

In October, Geordie Reid commenced research into the NZIES model development with expansion of the industrial demand sectors. Additional activities included:

 i.          GNS hydrogen project –mapping hydrogen supply and demand technologies into the NZIES model.

ii.         Offshore wind project – building on the summer school project of Cedric Chong with the aim of producing a working paper with Le Wen, Selena Sheng and Stephen Poletti.

Following Geordie’s effort, Lingli Qi continues to work on the NZIES model, and everything is proceeding as planned. Using the TIMES model, Lingli Qi aims to study the minimization of the total energy system cost of New Zealand’s hydrogen production. The model considers a set of constraints, including the limitation of primary energy supply, capacity and operational constraints of the process, and a limit on carbon emissions. Within this context, the TIMES model attempts to find an optimal configuration of the energy system that minimizes the total cost.

Lingli’s work will enable Lingli and Emilson to study the evolution of the hydrogen economy in New Zealand, including hydrogen’s potential as a storage source (energy security), as an export commodity and as a strategic policy choice for reducing transport’s future electricity demand. (Work in progress)

100% of this project is about energy production and utilization in New Zealand.

Research team: Lingli Qi and Emilson Silva.

This research project will initially evaluate current economic benefits and costs associated with bioenergy production in New Zealand through modern game-theoretic (strategic industrial and governmental choices) and econometric techniques. Among the potential costs, we will study (potential increases in) electricity and food prices and ground, water and air pollution discharges. We will utilize the parameters estimated in the econometric model to build an economywide model to examine policy pathways in which bioenergy configure in the energy mix in incremental steps. We will also consider a pathway in which bioenergy supply includes ethanol imports from Brazil, India and the United States for comparison purposes. (Work in progress)

This entire project is about energy utilization in New Zealand. The forestry industry in New Zealand should be very interested in the findings of this research project.

Research team: Lingli Qi and Emilson Silva.

This research project examines the impact of increasing renewableenergy production on foreign direct investment flows in New Zealand and other OECD nations. The testable hypothesis is that foreign investors favour investments in nations that demonstrate strong commitment toward net zero by 2050, a common goal, which for some nations may simply represent “cheap talk.”

The project will build a game-theoretic model in which nations compete to attract foreign direct investments utilizing various policy instruments, including direct expenditures in renewable energy infrastructure and research and development. Some nations may favour a business as usual (BAU) scenario over an active, costly, policy scenario. The global community of investors observe the policy commitments and respond accordingly to maximize the present value of their discounted sum of profits over the lifetime of the investments. The hypotheses derived from the game theoretical model will be tested utilizing a modern econometric model with OECD data. Among other things, we will rank OECD nations according to their commitments toward greening their energy sectors and later compare this rank with the rank of foreign direct investments to check their correlation degree. (Work in progress)

The project combines energy and foreign investment figures to consider an important issue for governmental policy making in New Zealand. The current policy making decisions ignore the potentially large benefits (e.g., economic growth, employment growth, human capital growth, higher quality of life, etc.) associated with attracted foreign direct investments.

Research team: Emilson Silva and Simon Tao.

• Optimal allocation of New Zealand wind generation

The distribution of wind farms will determine the extent to which New Zealand realises its wind energy potential. A cost-efficient distribution of wind generation will match the supply and demand of electricity to support New Zealand’s transition to 100% renewable energy. The following paper uses fifteen years of wind output reanalysis data at 25 existing and potential wind farms to find the optimal wind allocation for New Zealand in 2050. A loss function minimises electricity shortages and unnecessary wind spill to find specific wind farm combinations that complement the wider electricity system. The optimal wind capacity is dependent on developments in battery storage technology and the distribution of wind farm sites. Greater geographical dispersion of wind farm sites leads to less variable wind generation. An agent-based electricity pricing model finds significant differences in market prices depending on the distribution of wind farms. The optimal allocation of New Zealand wind generation is identified with more reliable wind output and lower average electricity prices. Overall, the study finds evidence for policymakers to increase wind generation capacity at the Mill Creek and Puketiro wind farms as well as consider further wind development in the broader Northland region. (Work in progress)

This entire project is about renewable energy generation and energy efficiency in New Zealand.
Research Team: Stephen Poletti, Le Wen, Geordie Reid and Shelena Sheng.

The road to renewable: 100% renewable electricity in New Zealand with wind, solar and seasonal energy storage

This paper imposes a 100% renewable generation constraint on the New Zealand electricity market to determine the least-cost configuration of wind, solar and seasonal energy storage that enables the country to reach a true 100\% renewable goal while resolving dry year exposure. A representation of the future New Zealand electricity market is formed using scaled historical demand and historic hydro generation patterns. New large-scale wind and solar electricity outputs are derived from atmospheric weather models to incorporate the variability caused by weather-dependent energy generation. Feasible combinations of wind, solar and seasonal energy storage are determined over an 18-year study period under the constraint that no demand interruption or blackouts occur.

The results indicate that New Zealand can cost-effectively reach its 100% renewable generation goal by 2030 without increasing electricity prices through the construction of a proposed large-scale pumped hydro storage – Lake Onslow. The optimum size is found to be 3.90 TWh of seasonal energy storage, growing to 5.7 TWh to satisfy 2050 demand. An unfortunate trade-off between wind and solar was revealed, induced by their different generation profiles in the New Zealand climate.

Wind is more cost-effective as it better matched the winter demand peak, required a smaller storage capacity and resulted in less drawdown of the energy storage. However, the lower cost comes at the risk of energy security as wind was found to be less predictable between years compared to solar. Energy spill was cost-optimal in all scenarios even when combined with battery storage, suggesting spill is expensive to avoid. This report concludes that seasonal energy storage is cost-effective in reaching the 100% renewable goal and decreasing dry year exposure, but the trade-off between wind, solar and seasonal storage capacity will require careful consideration due to the complex relationships and risks between the wind-solar-storage trade-offs. (Work in progress)

This entire project is about renewable energy generation and energy efficiency in New Zealand.

Research team: Stephen Poletti and Tim Armstrong. 

Lake Onslow

This paper uses 15 years of demand and weather reanalysis data combined with an agent-based machine learning model to observe both the requirements of electricity storage and the prices likely to result in a 100% renewable electricity system. Historical data is scaled to 2050 projections using figures provided by Transpower (2020). Shortages and surpluses are observed to understand the setting in which both battery and pumped hydro storage is required. An agent-based, short-term optimization model then predicts prices in a market with imperfect competition. It is found that lithium battery storage lacks utility due to low utilization. The high input capacity of a pumped hydro storage system allows near \$0/MWh charging costs. Average margins on electricity arbitraged by the pumped hydro scheme are exceedingly high, yet high fixed costs mean that government support is likely required for the scheme to go ahead. Short and long-term electricity prices in a 100% renewable system are highly volatile by today’s standards which leave potential for hedging agreements between seasonal storage operators and consumers. (Work in progress)

This entire project is about renewable energy generation and energy efficiency in New Zealand.

Research team: Stephen Poletti and Isaac Gumbrell.

• New Zealand’s economic development, fossil fuel usage and transport emissions
  

A cointegration analysis of New Zealand’s economic development, fossil fuel usage and transport emissions.

This study examines the relationship between New Zealand's (NZ) economic development, fossil fuel usage, and carbon dioxide emissions from the transport sector from 1977 to 2013. The Autoregressive Distributed Lag (ARDL) bounds testing to cointegration procedure is conducted, followed by the Granger causality approach, to validate the hypothesis of the transport-energy environmental Kuznets curve (EKC). The empirical results of the study reveal an inverted U shape between income and transport emissions for the sample period. The turning point is approximately US$31,070 in constant 2010 price, and NZ reached this income per capita level around 2002. Specifically, unidirectional causality between economic development and transport-related emissions was found in the short run, and it runs from economic development to transport emissions. Our findings deliver several policy implications. First, NZ’s carbon reduction policy programs should focus more on transitioning from a carbon-based energy system to renewable energy. Second, push and pull measures to address carbon emissions reduction in the transport sector will not harm economic development. Given the important role that full cells play in decarbonising the heavy transport sector, future research should also incorporate the roll-out and deployment of hydrogen vehicles on the country’s economic development, fossil fuel usage, and transport emissions. (Complete)

The energy component of this project lies in studying the economic development-fossil fuel-transport emissions nexus.

Research team: Selena Sheng and Le Wen.

• Feasibility study of diesel-hybrid trucks: A New Zealand case

To meet government emission targets the transport sector has to modify the methods and technologies being used in an economical way. Heavy Duty Freight Vehicles are a key player in transport emissions, and diesel-hybrid technology is a partial solution that has been potentially overlooked. Current alternatives are technologically costly and do not have the infrastructure to support large-scale operations. The aim of this research is to measure the feasibility by modelling the fuel use, and the potential fuel savings of a diesel-hybrid system, over a variety of trucking routes in New Zealand. Directly correlated to fuel savings are the CO2 emission reductions. The outputs of this research will enable further technological innovation in relation to developing an optimized 'smart' diesel-hybrid series-parallel system, suitable for operation in Heavy Duty Freight Vehicles. (Work in progress)

The energy component of this project lies in the study of diesel-hybrid trucks.

Research team: Selena Sheng and Le Wen.

• Decarbonization in New Zealand

Where and how to decarbonise New Zealand

Energy production and use contribute to greenhouse gas emissions. In New Zealand, energy-related greenhouse gas emissions account for 40% of total emissions. Since there is only a limited possibility of reducing methane from the agricultural sector, to reach the government net-zero carbon target by 2050, it is urgent to understand the energy-related emissions profile and its influencing factors. Limited research has been tackled in this area in New Zealand. This project will use input-output analysis and structural decomposition analysis to systematically investigate the driving forces shaping energy-related greenhouse gas emissions at national and sectoral levels. This project is built on the previous analysis with the newly released national input-output tables. The new evidence will assist policymakers in selecting appropriate policy instruments targeting key sectors to achieve emissions reduction effectively. (Work in progress)

The energy component of this project lies in understanding the energy-related emissions profile and its influencing factors.

Research team: Le Wen and Selena Sheng.

• Mobility-as-a-Service (MaaS): Reducing fossil fuel consumption and emissions

For its size, Auckland currently experiences poor transport and mobility outcomes across economic, social and environmental indicators. However, it is a relatively small city in global terms, meaning the task of transforming its mobility and transport sector may be less daunting if its key stakeholders so choose. Combined with a sound theoretical model, there is growing empirical evidence to suggest that MaaS will indeed be transformational. It has the potential to create a blueprint intellectual property that New Zealand could benefit from if MaaS initiatives are implemented holistically and at scale. By focusing on the customer – in terms of point-to-point journeys that can be executed with cognitive ease – MaaS can be an enabler for a significantly higher uptake of Public Transport by solving first- and last-mile challenges for transport users. In doing so, greater efficiency across the transport network can be achieved with a focus on utilization of the network, rather than expansion of the network to cater to its inefficient utilization. (Work in progress)

The energy component of this project lies in implementing MaaS initiatives associated with reduced fossil fuel consumption and emissions.

Research team: Selena Sheng and Le Wen.