Kiwi battery tech promises $2700 power bill cut
By Corin Dann of RNZ
A local energy-tech company is looking to shake up the electricity market with a home battery system that allows households to buy and store power when it is cheap.
Aotea Energy is launching its AE-1 battery in Auckland and Christchurch this week.
The battery system gives households direct access to wholesale spot prices for a $20 monthly subscription, with power, network charges and levies passed through at cost.
The battery is aimed at households using enough power to make the upfront cost stack up, as it starts at $10,500, plus a $1500 installation fee.
Aotea Energy founder Tama Toki said the home battery system, which includes the Aotea app, used intelligent computer technology to buy power when wholesale prices were low.
“The secret sauce, if you like, is every battery we build comes with a computer that has both reactive and proactive back-end policies. It gets signals from parts of the generation and retail markets that allow us to anticipate price spikes and price falls, so we can buy those cheap electrons.”
The company has been trialling the system over the past year and says it could cut annual household power bills by 65%.
Aotea Energy's AE-1 battery lets households buy power at wholesale prices. Photo / Supplied
“Over the past 12 months, our whole fleet has paid an average of 6 cents per kilowatt hour across the full trading period. On average, that works out at about $2700 in savings a year, with a payback period of between three and six years.”
Toki said the battery could also be paired with rooftop solar, although that was not required, and would allow excess power to be exported back to the grid when prices spiked.
However, he said the battery would not make sense for every household and, for now, worked best for those with higher electricity use.
Wholesale electricity prices in New Zealand can be volatile, especially during dry-year periods when hydro lake levels are low. That was last seen in August 2024, when wholesale power prices spiked sharply.
Most retail customers were protected because their power companies were hedged.
However, some industrial users buying from the wholesale market were under huge strain from soaring spot prices.
Toki acknowledged that could be an issue when buying wholesale, and said the company worked with its customers to explain how the wholesale system worked.
“In terms of sequencing, when we onboard customers, we always make sure that we take their bills and we get the consumption load profile and really kind of ragdoll their consumption and loads against that month in particular.”
However, he said the company had extensively stress-tested its system to see how it would cope with another month like August 2024.
He said costs were higher than the standard retail programme that month, but overall, the system performed well.
“Across a whole year, I think the average cost per kilowatt hour is about 6 cents. And that’s taking into consideration all that kind of dry-year risks and long tails that you have on the wholesale market.”
Tama Toki said he also felt some of the issues that contributed to the August 2024 spikes had been addressed, and there was now a tailwind for concepts like Aotea Energy.
The company is backed by Sir Stephen Tindall’s K1W1 fund and Vend founder Vaughan Fergusson and has appointed former Tesla Energy operator Antoine Riboulon as chief operating officer.
Toki said the company had proprietary ownership of the hardware, including the batteries it assembled in New Zealand.
This story was first published on rnz.co.nz
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