Flexibility 2.0

Something has shifted in New Zealand’s electricity sector.

Flexibility is no longer just a concept we talk about. It is starting to show up in real decisions, real projects, and real expectations.

Call it Flexibility 2.0. Not a new technology, but a new phase. One where the industry moves from discussion to delivery.

A Reset Moment for the Industry

Over the past few years, flexibility has been positioned as a future solution. Today, it is becoming a present requirement.

The joint open letter from ComCom, EA, and EECA, and the Flexibility Plan 2.0 from the Flex Forum, have done something important.

It’s aligning the industry around a simple idea: we cannot keep solving future demand with only poles and wires. We have spoken about flexibility for years. So what makes this different?

Three things are changing at the same time:

1. Clear direction from regulators

There is now a consistent signal across agencies. Flexibility is expected, not optional.

2. Practical steps, not theory

The Flexibility Plan sets out real actions. Not high-level thinking, but what needs to happen next.

3. Early movement from the market

Projects are starting to move beyond pilots. Not at scale yet, but enough to prove this works.

This is the shift into Flexibility 2.0. From “we should explore this” to “we need to do this”.

The Tension is Still There, and That’s Okay

We should be honest about where things are.

EDBs are still operating within a model that rewards asset investment. Terry highlights that the thinking for network companies goes something like, “How do I make more money? I build more things, have more assets, and get a higher regulated return.”

That does not change overnight.

• Building infrastructure is known and reliable
• Flexibility is still building confidence

The tension is real. But it is also what makes this moment important. Because instead of ignoring it, the industry is now working through it.

Part of the shift in thinking Terry notes is, “Utilities want to be really certain that when they access flexibility, it’s going to be there and deliver the job it’s being asked to do.”

For flexibility to become the default, two things must evolve:

1. Confidence in delivery, that flexibility will be there when needed
2. Commercial signals that make it worth using

Until then, flexibility remains a “when we have to” option.

What Flexibility Looks Like Now

Flexibility is not abstract. It already exists and looks like:

• Batteries responding to network signals
• EV charging shifting to avoid peaks
• Commercial loads reducing demand at critical times
• Aggregated assets being coordinated as a single resource

These are not future scenarios. They are happening today, just not yet at scale.

At a basic level, flexibility has existed for decades through ripple control, where networks reduce load by switching off hot water systems during peak periods. There are also multiple projects in play across the country, with one of the largest at the transmission level. Transpower has been procuring aggregated flexibility to help manage the system, demonstrating how distributed resources can support grid stability today.

Additionally, with the help of Ara Ake funding, multiple organisations are now connecting to platforms like Cortexo’s FlexViz, making their flexibility visible and ready for use by networks.

The Chicken and Egg Problem

For New Zealand to unlock flexibility at scale, the gap is not in capability. It is visibility and connection. For a long time, EDBs seeking flexibility were unsure of what was available, and providers seeking to sell had no way to easily participate in the market. 

It’s the classic “chicken and egg” problem, but things are starting to snowball:

• New technologies are increasing the available flexibility
• Aggregators are bundling and distributing resources
• Funding from Ara Ake is bringing supply into the market
• Industry groups like the Flex Forum are aligning on direction
• The Flexibility Plan 2.0 is providing industry with a practical roadmap
• EDBs are beginning to test real use cases
• Platforms like Flexviz are making flexibility visible and actionable

As Terry says, “We’re showing that there is flexibility around that we can corral into one place and access in the future.”

This is how markets form. Slowly, then all at once. Both sides have been ready, just not connected. Flexibility 2.0 is about closing that gap.

What’s Changing Now, And Why it Matters

The points above are all strong signals that the industry is moving. And we must keep moving, given the implicit pressure from Government. There is a genuine risk that if the industry does not progress towards a scalable flexibility market, we’ll see regulation tighten and decisions may shift from industry to government. No sector wants that.

We have an opportunity to lead the transition, not be forced into it.

If we zoom out and consider the long-term landscape, the risk of doing nothing is not theoretical.

Without flexibility:

• Network costs rise significantly
• Electricity prices increase
• Infrastructure investment becomes unsustainable

This has significant economic impacts.

“Without flexibility… we reduce productivity, increase costs, and risk an electricity system that cannot support growth,” says Terry. The worst-case scenario is not pretty. Businesses become less viable, electrification stalls and system reliability is compromised. 

Flexibility is not just a technical solution. It is an economic one.

The Commercial Reality: When Does Flexibility Scale?

Flexibility becomes scalable when three conditions are met:

1. Clear pricing mechanisms: The industry needs to know what flexibility is worth, when, and where.
2. Reliable access and visibility: EDBs need confidence that flexibility will deliver when called.
3. Early money on the table: Even small payments create signals that drive supply growth.

Right now, the biggest blocker is not technology. It is confidence and commercial structure. Terry notes that flexibility often sits in a grey zone, where value exists but is not yet consistently priced or accessed.

But we need confidence that a mature flexibility market is not only possible, but achievable in the near future. A mature market is not complex. It is responsive. It looks like:

• Price signals sent in real time
• Devices respond automatically
• Load shifts without manual intervention
• EDBs manage the network dynamically
• Investment decisions become more efficient

This means that flexibility becomes predictable, scalable and embedded in planning. 

What should EDBs do in the next 12 months?

Flexibility 2.0 does not require a complete shift overnight. But it does require movement.

The EDBs that will benefit most will be those that:

• Start engaging with real flexibility, even at small volumes
• Build internal understanding early
• Participate in shaping how the market works

This is not about replacing infrastructure. It is about adding another tool, and learning how to use it well.

Those who wait will face higher costs, have less influence and play catch-up under pressure. A realistic plan for EDBs over the next 12 months:

1. Start with real use cases, not strategy documents
2. Engage with available flexibility, even at a small scale
3. Test commercial models, not just technical ones
4. Invest in visibility, understanding what exists on your network

The goal is not perfection. It is progress and learning.

A Reason to be Optimistic

It is easy to focus on what is not ready yet. But that misses the point.

A year ago, the industry was asking: “is flexibility viable?”

Today, the conversation is: “how do we make this work at scale?”

That is a meaningful shift. Flexibility 2.0 is not about reinventing the idea. It’s about recognising that the industry is ready to move forward. The signals are aligned. The groundwork is in place. The first steps are already happening.

Flexibility is no longer coming. It has started.