Distribution system operation pilot
We're providing enhanced regulatory support to Counties Energy's distribution system operation pilot as part of the Power Innovation Pathway.
Counties Energy
Network optimisation pilot
Counties Energy is leading a pilot to demonstrate Distribution System Operator functions to optimise network capacity and potentially prevent significant household bill increases by avoiding/deferring network investment.
Using smart technology to manage electricity
The electricity network is traditionally designed around infrequent electricity demand peaks and one-way power flow from centralised generators to consumers. Now, distributed energy resources, like solar and batteries, mean electricity is flowing in two directions and demand is changing more often.
If New Zealand keeps building infrastructure to handle peak electricity demand, there is a risk of spending too much too soon and pushing up costs for consumers, instead of letting them play a more active role in the energy transition.
Counties Energy is developing innovative distribution system operator capabilities for a 2025 Karaka Harbourside pilot. Working with flexibility service providers and the Transmission System Operator, it will provide flexibility traders with dynamic, real-time capacity signals. This will deliver benefits for consumers through maximising network capacity, enhancing resilience and minimising costs.
About Counties Energy
As a 100% community-owned distributor, Counties Energy recognises that rapid electrification is fundamentally changing how electricity flows through networks.
Counties Energy is exploring innovative solutions to keep power bills stable as the community electrifies, rather than simply building larger infrastructure to meet increasing peak demand (ultimately paid for through consumer bills).
Power Innovation Pathway support
The Electricity Authority is supporting this initiative to enable a more flexible electricity system and using the learnings to inform broader regulatory development for distribution system operation to enable a more reliable and affordable electricity system.

Providing regulatory support
Counties Energy faces complex regulatory challenges around introducing new market participants, along with queries around Distribution System Operator neutrality, data and wholesale/local market coordination.
To support, we are leveraging our work on Future System Operation to help clarify any potential Code barriers to Transmission System Operator/Distribution System Operator coordination and regulatory frameworks for the emerging flexibility market.

Informing the Authority’s work programme
Our Future Security and Resilience team is observing this pilot to ensure the results can inform broader regulatory development for distribution system operation across New Zealand to enable greater system efficiency and affordability for consumers.
The learnings from this pilot are also informing our Future System Operation programme.