The New Zealand test: Tesla teams up with Vector

OPINION

When machines permitting payment by credit or debit card were first developed, New Zealand was one of the first countries within which this eftpos technology was deployed.

Today one can buy a coffee or even a 50c bag of sweets with their Visa or Mastercard. Most businesses do not have a minimum purchase for which you can use your bank card. Few of us carry cash.

New Zealand’s market is often considered something of a test environment for new technologies. Our small island nation is isolated in the middle of the Pacific Ocean but we have an advanced economy and large middle class.

Thus our small population and an open, competitive marketplace makes New Zealand the perfect place to trial new products and innovations. If the product meets a certain need, it will rapidly penetrate the market. You will soon know whether it can be profitable or not – and whether you should launch the product elsewhere in the world.

In May, US company Tesla teamed up with Vector [NZX: VCT], New Zealand’s biggest electricity distributor, to bring its lauded lithium-ion batteries to New Zealand homes and businesses.

Like cellphones, these batteries do not require heavy investments in supporting infrastructure networks. They permit households and businesses to install PV solar panels while managing solar power’s intermittency.

The main problem with solar power is that the sun does not shine all of the time. When the skies are cloudy or night falls, your photovoltaic rooftop panels stop generating electricity. So households and businesses still need to be connected to the main electricity grid to guarantee their supply, in spite of solar panel installations.

You can resolve this issue by stockpiling electricity during daylight hours to use at night. This seems simple enough. However, batteries boasting the voltage and lifespan needed to supply an average household with enough electricity to keep the lights on have not been brought to market. Basically it is too expensive. Prototypes are also massive in size.

In principle, if compact, powerful and affordable batteries hit the market, then you would not need to be connected to the electricity distribution network. In fact you or your local community could go off grid.

How many households do not bother to install a landline phone these days? Could new houses avoid connecting to the main electricity grid in the near future? It is only a matter of time before battery technology hits that sweet spot. You can read about how Tesla plans to achieve economies of scale that surmount the current cost problem here.

To take a residence off-grid you would also need a smart monitoring system that conserves energy and warns you to turn off unnecessary devices when the household is running low on juice.

Vector is investing in energy management systems that would provide this kind of service. They’ve also been investing in photovoltaic solar power and micro wind turbines. The company is future-proofing its main business – just in case distribution services are no longer needed in New Zealand.

If a decentralised electricity supply model works in New Zealand it will probably fly elsewhere. I still can’t pay for a coffee by credit card in Europe, though.

Briony Bennett grew up in Australia and New Zealand. She graduated with an M.A. International Energy from the Institut d’Études Politiques de Paris. She lives in Paris where she works for a power exchange. She posts at brionybennett.com