The Impact of AI on Corporate Electricity Bills


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AI Energy Consumption strains corporate electricity bills as data centers and HPC workloads run nonstop, driving carbon emissions. Efficiency upgrades, renewable energy, and algorithm optimization help control costs and enhance sustainability across industries.

 

Key Points

AI Energy Consumption is the power used by AI compute and data centers, impacting costs and sustainability.

✅ Optimize cooling, hardware, and workloads to cut kWh per inference

✅ Integrate on-site solar, wind, or PPAs to offset data center power

✅ Tune models and algorithms to reduce compute and latency

 

Artificial Intelligence (AI) is revolutionizing industries with its promise of increased efficiency and productivity. However, as businesses integrate AI technologies into their operations, there's a significant and often overlooked impact: the strain on corporate electricity bills.

AI's Growing Energy Demand

The adoption of AI entails the deployment of high-performance computing systems, data centers, and sophisticated algorithms that require substantial energy consumption. These systems operate around the clock, processing massive amounts of data and performing complex computations, and, much like the impact on utilities seen with major EV rollouts, contributing to a notable increase in electricity usage for businesses.

Industries Affected

Various sectors, including finance, healthcare, manufacturing, and technology, rely on AI-driven applications for tasks ranging from data analysis and predictive modeling to customer service automation and supply chain optimization, while manufacturing is influenced by ongoing electric motor market growth that increases electrified processes.

Cost Implications

The rise in electricity consumption due to AI deployments translates into higher operational costs for businesses. Corporate entities must budget accordingly for increased electricity bills, which can impact profit margins and financial planning, especially in regions experiencing electricity price volatility in Europe amid market reforms. Managing these costs effectively becomes crucial to maintaining competitiveness and sustainability in the marketplace.

Sustainability Challenges

The environmental impact of heightened electricity consumption cannot be overlooked. Increased energy demand from AI technologies contributes to carbon emissions and environmental footprints, alongside rising e-mobility demand forecasts that pressure grids, posing challenges for businesses striving to meet sustainability goals and regulatory requirements.

Mitigation Strategies

To address the escalating electricity bills associated with AI, businesses are exploring various mitigation strategies:

  1. Energy Efficiency Measures: Implementing energy-efficient practices, such as optimizing data center cooling systems, upgrading to energy-efficient hardware, and adopting smart energy management solutions, can help reduce electricity consumption.

  2. Renewable Energy Integration: Investing in renewable energy sources like solar or wind power and energy storage solutions to enhance flexibility can offset electricity costs and align with corporate sustainability initiatives.

  3. Algorithm Optimization: Fine-tuning AI algorithms to improve computational efficiency and reduce processing times can lower energy demands without compromising performance.

  4. Cost-Benefit Analysis: Conducting thorough cost-benefit analyses of AI deployments to assess energy consumption against operational benefits and potential rate impacts, informed by cases where EV adoption can benefit customers in broader electricity markets, helps businesses make informed decisions and prioritize energy-saving initiatives.

Future Outlook

As AI continues to evolve and permeate more aspects of business operations, the demand for electricity will likely intensify and may coincide with broader EV demand projections that increase grid loads. Balancing the benefits of AI-driven innovation with the challenges of increased energy consumption requires proactive energy management strategies and investments in sustainable technologies.

Conclusion

The integration of AI technologies presents significant opportunities for businesses to enhance productivity and competitiveness. However, the corresponding surge in electricity bills underscores the importance of proactive energy management and sustainability practices. By adopting energy-efficient measures, leveraging renewable energy sources, and optimizing AI deployments, businesses can mitigate cost impacts, reduce environmental footprints, and foster long-term operational resilience in an increasingly AI-driven economy.

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Smart grid and system improvements help avoid more than 500,000 outages over the summer

ComEd Smart Grid Reliability drives outage reduction across Illinois, leveraging smart switches, grid modernization, and peak demand programs to keep customers powered, improve power quality, and enhance energy savings during extreme weather and severe storms.

 

Key Points

ComEd's smart grid performance, cutting outages and improving power quality to enhance reliability and customer savings.

✅ Smart switches reroute power to avoid customer interruptions

✅ Fewer outages during extreme weather across northern Illinois

✅ Peak Time Savings rewards for reduced peak demand usage

 

While the summer of 2019 set records for heat and brought severe storms, ComEd customers stayed cool thanks to record-setting reliability during the season. These smart grid investments over the last seven years helped to set records in key reliability measurements, including frequency of outages metrics, and through smart switches that reroute power around potential problem areas, avoided more than 538,000 customer interruptions from June to August.

"In a summer where we were challenged by extreme weather, we saw our smart grid investments and our people continue to deliver the highest levels of reliability, backed by extensive disaster planning across utilities, for the families and businesses we serve," said Joe Dominguez, CEO of ComEd. "We're proud to deliver the most affordable, cleanest and, as we demonstrated this summer, most reliable energy to our customers. I want to thank our 6,000 employees who work around the clock in often challenging conditions to power our communities."

ComEd has avoided more than 13 million customer interruptions since 2012, due in part to smart grid and system improvements. The avoided outages have resulted in $2.4 billion in estimated savings to society. In addition to keeping energy flowing for residents, strong power reliability continues to help persuade industrial and commercial companies to expand in northern Illinois and Chicago. The GridWise Alliance recently recognized Illinois as the No. 2 state in the nation for its smart grid implementation.

"Our smart grid investments has vastly improved the infrastructure of our system," said Terry Donnelly, ComEd president and chief operating officer. "We review the system and our operations continually to make sure we're investing in areas that benefit the greatest number of customers, and to prepare for public-health emergencies as well. On a daily basis and during storms or to reduce wildfire risk when necessary, our customers are seeing fewer and fewer interruptions to their lives and businesses."

ComEd customers also set records for energy savings this summer. Through its Peak Time Savings program and other energy-efficiency programs offered by utilities, ComEd empowered nearly 300,000 families and individuals to lower their bills by a total of more than $4 million this summer for voluntarily reducing their energy use during times of peak demand. Since the Peak Time Savings program launched in 2015, participating customers have earned a total of more than $10 million in bill credits.

 

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Criminals posing as Toronto Hydro are sending out fraudulent messages

Toronto Hydro Scam Warning urges customers to spot phishing emails, fraudulent texts, fake bills, and door-to-door threats demanding bitcoin or prepaid cards, with disconnection threats; report scams to the Canadian Anti-Fraud Centre.

 

Key Points

Advisory on phishing, fake bills, and payment scams posing as Toronto Hydro, with steps to avoid fraud and report.

✅ Hang up suspicious calls; never pay via bitcoin or prepaid cards.

✅ Do not click links in emails or texts; compare bills and account numbers.

✅ Report fraud to the Canadian Anti-Fraud Centre: 1-888-495-8501.

 

Toronto Hydro has sent out a notice that criminals posing as Toronto Hydro are sending out fraudulent texts, letters and emails, similar to a recent BC Hydro scam reported in British Columbia.

The warning comes in a tweet, along with suggestions on how to protect yourself from fraud, especially as policy debates like an NDP public hydro plan can generate confusing messages.

According to Toronto Hydro, fraudsters are contacting people by phone, text, email, fake electricity bills, and even travelling door-to-door.

They threaten to disconnect the power unless an immediate payment is made, even though legitimate utilities must follow proper disconnection notices processes. The website states that in some cases, criminals request payment via pre-paid credit card or bitcoin.

It’s written on the website that Toronto Hydro does not accept these methods of payment, and they do not threaten to immediately disconnect power, a reminder that stories about power theft abroad are not a model for local billing.

If you suspect you are being targeted, you should immediately hang up any suspicious phone calls. Don’t click on any links in emails or texts asking you to accept electronic transfers, as scammers may impersonate well-known utilities during high-profile news such as Hydro One profit changes to appear credible.

Avoid sharing any personal information over the phone or in-person, and do not make any payments related to Smart Meter Deposits, as this fee does not exist and rate-setting is overseen by the Ontario Energy Board in Ontario.

And remember to always compare bills to previous ones, including the amount and account number, since major accounting decisions like a BC Hydro deferral report can fuel confusing narratives.

To report fraudulent activity, please contact:
Canadian Anti-Fraud Centre at 1-888-495-8501; quote file number 844396

 

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Electricity prices may go up by 15 per cent

Jersey Electricity Standby Charge proposes a grid-backup fee for commercial self-generators of renewable energy, with a review delaying implementation; potential tariff impacts include 10-15 percent price rises, cost recovery, and network reliability.

 

Key Points

A grid-backup fee for Jersey self-generating businesses to share network costs fairly and curb electricity price rises.

✅ Applies to commercial self-generation using renewables or not

✅ Excludes full exporters and pre-charge installations

✅ Aims to recover grid costs and avoid 10-15% price rises

 

Electricity prices could rise by ten to 15 per cent if a standby charge for some commercial customers is not implemented, the chief executive of Jersey Electricity has warned.

Jersey Electricity has proposed extending a monthly fee to commercial customers who generate their own power through renewable means but still wish to be connected to Jersey’s grid as a back-up, echoing Ontario energy storage efforts to shore up reliability.

The States recently unanimously backed a proposal lodged by Deputy Carolyn Labey to delay administering the levy until a review could be carried out, as seen in the UK grid's net-zero transformation debates influencing policy. The charge, was due to be implemented next month but will now not be introduced until May, or later if the review has not concluded.

But Chris Ambler, JE chief executive, warned that failing to implement the standby charge could lead to additional costs for customers.

Some of JE’s commercial customers have already been charged a standby fee after generating their own power through non-renewable means.

The charge does not apply to businesses which export all of their electricity back into the system as part of a buy-back scheme or those which install self-generation facilities before the charge is implemented.

Deputy Labey argued that the Island had done ‘absolutely nothing’ to support the use of renewable energies and instead were discouraging locally generated power by allowing JE to set a standby charge.

She added that she was pleased that the Council of Ministers had already starting reviewing the charges but the debate needed to go ahead to ensure the work continued after the May election.

During a States debate last month, she said: ‘It is increasingly concerning that we, as an island in the 21st century, are happy for our electricity to be provided to us by an unregulated, publicly listed for-profit company with a monopoly on energy.

‘I also think that introducing a charge on renewables at a time when the world is experiencing a revolution in renewable energies, including offshore vessel charging solutions, which are becoming increasingly economic, is something that needs to be investigated.

‘Jersey should be looking to diversify our electricity production and supply, to help protect us from price and currency fluctuations and to ensure that we, as an island, receive the best deal possible for Islanders.’

Mr Ambler said that any price increase would be dependent on the future take-up and use of renewable-energy technology in Jersey.

He said: ‘The cost impact would not be significant in the short term but in the long term it could be significant. I think that we are obliged to let our customers know that.

‘It is very difficult to assess but if we are not able to levy a fair charge, then, as electricity shortages in Canada have shown, we could see prices rise by ten to 15 per cent over time.’

Mr Ambler added that his company was in favour of the use of renewable energy, with a third of the company’s electricity being generated by hydroelectric sources, but that the costs of implementing it needed to be fairly distributed, given how big battery rule changes can affect project viability elsewhere in the market.

And he said that, while it was difficult to quantify how much could be lost if the standby charge was not implemented, it could cost the company over £10 million.

‘In 2014, we only increased our prices by one per cent,’ he said. ‘We are reviewing our prices at the moment but if we did put an increase in place it would be modest and it would not be linked to the standby charge.’

 

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Scientists Built a Genius Device That Generates Electricity 'Out of Thin Air'

Air-gen Protein Nanowire Generator delivers clean energy by harvesting ambient humidity via Geobacter-derived conductive nanowires, generating continuous hydrovoltaic electricity through moisture gradients, electrodes, and proton diffusion for sustainable, low-waste power in diverse climates.

 

Key Points

A device using Geobacter protein nanowires to harvest humidity, producing continuous DC power via proton diffusion.

✅ 7 micrometer film between electrodes adsorbs water vapor.

✅ Output: ~0.5 V, 17 uA/cm2; stack units to scale power.

✅ Geobacter optimized via engineered E. coli for mass nanowires.

 

They found it buried in the muddy shores of the Potomac River more than three decades ago: a strange "sediment organism" that could do things nobody had ever seen before in bacteria.

This unusual microbe, belonging to the Geobacter genus, was first noted for its ability to produce magnetite in the absence of oxygen, but with time scientists found it could make other things too, like bacterial nanowires that conduct electricity.

For years, researchers have been trying to figure out ways to usefully exploit that natural gift, and they might have just hit pay-dirt with a device they're calling the Air-gen. According to the team, their device can create electricity out of… well, almost nothing, similar to power from falling snow reported elsewhere.

"We are literally making electricity out of thin air," says electrical engineer Jun Yao from the University of Massachusetts Amherst. "The Air-gen generates clean energy 24/7."

The claim may sound like an overstatement, but a new study by Yao and his team describes how the air-powered generator can indeed create electricity with nothing but the presence of air around it. It's all thanks to the electrically conductive protein nanowires produced by Geobacter (G. sulfurreducens, in this instance).

The Air-gen consists of a thin film of the protein nanowires measuring just 7 micrometres thick, positioned between two electrodes, referencing advances in near light-speed conduction in materials science, but also exposed to the air.

Because of that exposure, the nanowire film is able to adsorb water vapour that exists in the atmosphere, offering a contrast to legacy hydropower models, enabling the device to generate a continuous electrical current conducted between the two electrodes.

The team says the charge is likely created by a moisture gradient that creates a diffusion of protons in the nanowire material.

"This charge diffusion is expected to induce a counterbalancing electrical field or potential analogous to the resting membrane potential in biological systems," the authors explain in their study.

"A maintained moisture gradient, which is fundamentally different to anything seen in previous systems, explains the continuous voltage output from our nanowire device."

The discovery was made almost by accident, when Yao noticed devices he was experimenting with were conducting electricity seemingly all by themselves.

"I saw that when the nanowires were contacted with electrodes in a specific way the devices generated a current," Yao says.

"I found that exposure to atmospheric humidity was essential and that protein nanowires adsorbed water, producing a voltage gradient across the device."

Previous research has demonstrated hydrovoltaic power generation using other kinds of nanomaterials – such as graphene-based systems now under study – but those attempts have largely produced only short bursts of electricity, lasting perhaps only seconds.

By contrast, the Air-gen produces a sustained voltage of around 0.5 volts, with a current density of about 17 microamperes per square centimetre, and complementary fuel cell solutions can help keep batteries energized, with a current density of about 17 microamperes per square centimetre. That's not much energy, but the team says that connecting multiple devices could generate enough power to charge small devices like smartphones and other personal electronics – concepts akin to virtual power plants that aggregate distributed resources – all with no waste, and using nothing but ambient humidity (even in regions as dry as the Sahara Desert).

"The ultimate goal is to make large-scale systems," Yao says, explaining that future efforts could use the technology to power homes via nanowire incorporated into wall paint, supported by energy storage for microgrids to balance supply and demand.

"Once we get to an industrial scale for wire production, I fully expect that we can make large systems that will make a major contribution to sustainable energy production."

If there is a hold-up to realising this seemingly incredible potential, it's the limited amount of nanowire G. sulfurreducens produces.

Related research by one of the team – microbiologist Derek Lovley, who first identified Geobacter microbes back in the 1980s – could have a fix for that: genetically engineering other bugs, like E. coli, to perform the same trick in massive supplies.

"We turned E. coli into a protein nanowire factory," Lovley says.

"With this new scalable process, protein nanowire supply will no longer be a bottleneck to developing these applications."

 

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Ireland: We are the global leaders in taking renewables onto the grid

Ireland 65% Renewable Grid Capability showcases world leading integration of intermittent wind and solar, smart grid flexibility, EU-SysFlex learnings, and the Celtic Interconnector to enhance stability, exports, and energy security across the European grid.

 

Key Points

Ireland can run its isolated power system with 65% variable wind and solar, informing EU grid integration and scaling.

✅ 65% system non-synchronous penetration on an isolated grid

✅ EU-SysFlex roadmap supports large-scale renewables integration

✅ Celtic Interconnector adds 700MW capacity and stability

 

Ireland is now able to cope with 65% of its electricity coming from intermittent electricity sources like wind and solar, as highlighted by Ireland's green electricity outlook today – an expertise Energy Minister Denish Naugthen believes can be replicated on a larger scale as Europe moves towards 50% renewable power by 2030.

Denis Naughten is an Irish politician who serves as Minister for Communications, Climate Action and Environment since May 2016.

Naughten spoke to editor Frédéric Simon on the sidelines of a EURACTIV event in the European  Parliament to mark the launch of EU-SysFlex, an EU-funded project, which aims to create a long-term roadmap for the large-scale integration of renewable energy on electricity grids.

What is the reason for your presence in Brussels today and the main message that you came to deliver?

The reason that I’m here today is that we’re going to share the knowledge what we have developed in Ireland, right across Europe. We are now the global leaders in taking variable renewable electricity like wind and solar onto our grid.

We can take a 65% loading on to the grid today – there is no other isolated grid in the world that can do that. We’re going to get up to 75% by 2020. This is a huge technical challenge for any electricity grid and it’s going to be a problem that is going to grow and grow across Europe, even as Europe's electricity demand rises in the coming years, as we move to 50% renewables onto our grid by 2030.

And our knowledge and understanding can be used to help solve the problems right across Europe. And the sharing of technology can mean that we can make our own grid in Ireland far more robust.

What is the contribution of Ireland when it comes to the debate which is currently taking place in Europe about raising the ambition on renewable energy and make the grid fit for that? What are the main milestones that you see looking ahead for Europe and Ireland?

It is a challenge for Europe to do this, but we’ve done it Ireland. We have been able to take a 65% loading of wind power on our grid, with Irish wind generation hitting records recently, so we can replicate that across Europe.

Yes it is about a much larger scale and yes, we need to work collaboratively together, reflecting common goals for electricity networks worldwide – not just in dealing with the technical solutions that we have in Ireland at the fore of this technology, but also replicating them on a larger scale across Europe.

And I believe we can do that, I believe we can use the learnings that we have developed in Ireland and amplify those to deal with far bigger challenges that we have on the European electricity grid.

Trialogue talks have started at European level about the reform of the electricity market. There is talk about decentralised energy generation coming from small-scale producers. Do you see support from all the member states in doing that? And how do you see the challenges ahead on a political level to get everyone on board on such a vision?

I don’t believe there is a political problem here in relation to this. I think there is unanimity across Europe that we need to support consumers in producing electricity for self-consumption and to be able to either store or put that back into the grid.

The issues here are more technical in nature. And how you support a grid to do that. And who actually pays for that. Ireland is very much a microcosm of the pan-European grid and how we can deal with those challenges.

What we’re doing at the moment in Ireland is looking at a pilot scheme to support consumers to generate their own electricity to meet their own needs and to be able to store that on site.

I think in the years to come a lot of that will be actually done with more battery storage in the form of electric vehicles and people would be able to transport that energy from one location to another as and when it’s needed. In the short term, we’re looking at some novel solutions to support consumers producing their own electricity and meeting their own needs.

So I think this is complex from a technical point of view at the moment, I don’t think there is an unwillingness from a political perspective to do it, and I think working with this particular initiative and other initiatives across Europe, we can crack those technical challenges.

To conclude, last year, the European Commission allocated €4 million to a project to link up the Irish electricity grid to France. How is that going to benefit Ireland? And is that related to worries that you may have over Brexit?

The plan, which is called the Celtic Interconnector, is to link France with the Irish electricity grid. It’s going to have a capacity of about 700MW. It allows us to provide additional stability on our grid and enables us to take more renewables onto the grid. It also allows us to export renewable electricity onto the main European grid as well, and provide stability to the French network.

So it’s a benefit to both individual networks as well as allowing far more renewables onto the grid. We’ve been working quite closely with RTE in France and with both regulators. We’re hoping to get the support of the European Commission to move it now from the design stage onto the construction stage. And I understand discussions are ongoing with the Commission at present with regard to that.

And that is going to diversify potential sources of electricity coming in for Ireland in a situation which is pretty uncertain because of Brexit, correct?

Well, I don’t think there is uncertainty because of Brexit in that we have agreements with the United Kingdom, we’re still going to be part of the broader energy family in relation to back-and-forth supply across the Irish Sea, with grid reinforcements in Scotland underscoring reliability needs.  But I think it is important in terms of meeting the 15% interconnectivity that the EU has set in relation to electricity.

And also in relation of providing us with an alternative support in relation to electricity supply outside of Britain. Because Britain is now leaving the European Union and I think this is important from a political point of view, and from a broader energy security point of view. But we don’t see it in the short term as causing threats in relation to security of supply.

 

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As New Zealand gets serious about climate change, can electricity replace fossil fuels in time?

New Zealand Energy Transition will electrify transport and industry with renewables, grid-scale solar, wind farms, geothermal, batteries, demand response, pumped hydro, and transmission upgrades to manage dry-year risk and winter peak loads.

 

Key Points

A shift to renewables and smart demand to decarbonise transport and industry while ensuring reliable, affordable power.

✅ Electrifies transport and industrial heat with renewables

✅ Uses demand response, batteries, and pumped hydro for resilience

✅ Targets 99%+ renewable supply, managing dry-year and peak loads

 

As fossil fuels are phased out over the coming decades, the Climate Change Commission (CCC) suggests electricity will take up much of the slack, aligning with the vision of a sustainable electric planet powering our vehicle fleet and replacing coal and gas in industrial processes.

But can the electricity system really provide for this increased load where and when it is needed? The answer is “yes”, with some caveats.

Our research examines climate change impacts on the New Zealand energy system. It shows we’ll need to pay close attention to demand as well as supply. And we’ll have to factor in the impacts of climate change when we plan for growth in the energy sector.

 

Demand for electricity to grow
While electricity use has not increased in NZ in the past decade, many agencies project steeply rising demand in coming years. This is partly due to both increasing population and gross domestic product, but mostly due to the anticipated electrification of transport and industry, which could result in a doubling of demand by mid-century.

It’s hard to get a sense of the scale of the new generation required, but if wind was the sole technology employed to meet demand by 2050, between 10 and 60 new wind farms would be needed nationwide.

Of course, we won’t only build wind farms, as renewables are coming on strong and grid-scale solar, rooftop solar, new geothermal, some new small hydro plant and possibly tidal and wave power will all have a part to play.

 

Managing the demand
As well as providing more electricity supply, demand management and batteries will also be important. Our modelling shows peak demand (which usually occurs when everyone turns on their heaters and ovens at 6pm in winter) could be up to 40% higher by 2050 than it is now.

But meeting this daily period of high demand could see expensive plant sitting idle for much of the time (with the last 25% of generation capacity only used about 10% of the time).

This is particularly a problem in a renewable electricity system when the hydro lakes are dry, as hydro is one of the few renewable electricity sources that can be stored during the day (as water behind the dam) and used over the evening peak (by generating with that stored water).

Demand response will therefore be needed. For example, this might involve an industrial plant turning off when there is too much load on the electricity grid.

 

But by 2050, a significant number of households will also need smart appliances and meters that automatically use cheaper electricity at non-peak times. For example, washing machines and electric car chargers could run automatically at 2am, rather than 6pm when demand is high.

Our modelling shows a well set up demand response system could mitigate dry-year risk (when hydro lakes are low on water) in coming decades, where currently gas and coal generation is often used.

Instead of (or as well as) having demand response and battery systems to combat dry-year risk, a pumped storage system could be built. This is where water is pumped uphill when hydro lake inflows are plentiful, and used to generate electricity during dry periods.

The NZ Battery project is currently considering the potential for this in New Zealand, and debates such as whether we would use Site C's electricity offer relevant lessons.

 

Almost (but not quite) 100% renewable
Dry-year risk would be greatly reduced and there would be “greater greenhouse gas emissions savings” if the Interim Climate Change Committee’s (ICCC) 2019 recommendation to aim for 99% renewable electricity was adopted, rather than aiming for 100%.

A small amount of gas-peaking plant would therefore be retained. The ICCC said going from 99% to 100% renewable electricity by overbuilding would only avoid a very small amount of carbon emissions, at a very high cost.

Our modelling supports this view. The CCC’s draft advice on the issue also makes the point that, although 100% renewable electricity is the “desired end point”, timing is important to enable a smooth transition.

Despite these views, Energy Minister Megan Woods has said the government will be keeping the target of a 100% renewable electricity sector by 2030.

 

Impacts of climate change
In future, the electricity system will have to respond to changing climate patterns as well, becoming resilient to climate risks over time.

The National Institute of Water and Atmospheric Research predicts winds will increase in the South Island and decrease in the far north in coming decades.

Inflows to the biggest hydro lakes will get wetter (more rain in their headwaters), and their seasonality will change due to changes in the amount of snow in these catchments.

Our modelling shows the electricity system can adapt to those changing conditions. One good news story (unless you’re a skier) is that warmer temperatures will mean less snow storage at lower elevations, and therefore higher lake inflows in the big hydro catchments in winter, leading to a better match between times of high electricity demand and higher inflows.

 

The price is right
The modelling also shows the cost of generating electricity is not likely to increase, because the price of building new sources of renewable energy continues to fall globally.

Because the cost of building new renewables is now cheaper than non-renewables (such as coal-fired plants), investing in carbon-free electricity is increasingly compelling, and renewables are more likely to be built to meet new demand in the near term.

While New Zealand’s electricity system can enable the rapid decarbonisation of (at least) our transport and industrial heat sectors, international efforts like cleaning up Canada's electricity underline the need for certainty so the electricity industry can start building to meet demand everywhere.

Bipartisan cooperation at government level will be important to encourage significant investment in generation and transmission projects with long lead times and life expectancies, as analyses of climate policy and grid implications underscore in comparable markets.

Infrastructure and markets are needed to support demand response uptake, as well as certainty around the Tiwai exit in 2024 and whether pumped storage is likely to be built.

Our electricity system can support the rapid decarbonisation needed if New Zealand is to do its fair share globally to tackle climate change.

But sound planning, firm decisions and a supportive and relatively stable regulatory framework are all required before shovels can hit the ground.

 

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