Introduction

Electricity distribution businesses (EDBs) in New Zealand are facing unprecedented change. Rooftop solar, home batteries, and electric vehicles are connecting at record pace.

 Electrification of transport and heating is accelerating, while customers demand fair access and regulators expect capex efficiency.

The challenge is clear: how do EDBs integrate this surge of distributed energy resources (DER) without resorting to expensive network reinforcement or blunt restrictions like zero-export rules?

The answer is Dynamic Operating Envelopes (DOEs) - a proven, scalable tool that is already transforming networks overseas.

The Problem With Fixed Limits

Today, most customers connecting solar or batteries are given a fixed export/import limit (e.g., 5 kW export cap). While simple, this approach creates three issues:

1. Unfairness – one household may have plenty of feeder headroom but is still capped.
2. Wasted capacity – feeders often have unused headroom at certain times of day.
3. Overbuilding risk – blanket limits don’t avoid reinforcement, they just delay it.

This outdated model holds back customer participation and undermines renewable integration.

What Are Dynamic Operating Envelopes?

A Dynamic Operating Envelope is a time-varying, location-specific import/export limit for each connection.

• Dynamic: recalculated based on real-time or forecast network conditions.
• Location-specific: different customers on the same feeder can have different limits.
• Technology-neutral: applies to solar, batteries, EV chargers, or any controllable device.

Example:

• Morning → Export up to 8 kW (feeder under-utilised).
• Midday → Export capped at 2 kW (high solar congestion).
• Evening → Import 6 kW (to support EV charging).

Instead of blocking DER, DOEs unlock flexibility and ensure safety.

Why DOEs Matter for NZ EDBs

1. Fair Access for Customers

Customers no longer face blanket caps. Limits reflect actual feeder conditions, providing transparency and trust.

2. Maximising Hosting Capacity

EDBs can safely connect more solar and batteries without reinforcement, increasing renewable integration.

3. Deferring Capex

Commerce Commission oversight requires EDBs to prove “least-cost solutions”. DOEs are a cost-effective alternative to traditional reinforcement.

4. Enabling the DSO Transition

As New Zealand moves towards a Distribution System Operator (DSO) model, DOEs provide the guardrails for operating flexibility markets and actively managing DER.

Lessons From Overseas

• Australia:
  • SA Power Networks rolled out Flexible Exports statewide in 2023 using CSIP-AUS / IEEE 2030.5.
  • Victoria mandated DOE-capable inverters for all new installs from March 2024.
  • AEMO’s Project EDGE proved how day-ahead and intra-day DOEs support DER and markets.
• UK:
  • ENA’s Open Networks Programme is testing DOEs as part of the DSO roadmap.
  • DNOs are combining DOEs with flexibility tenders to procure local services.
• US:
  • FERC Order 2222 enables DER aggregations to participate in wholesale markets. DOEs (or equivalent guardrails) are essential for distribution-level safety.

These jurisdictions show that DOEs are not theory — they are proven, practical, and scalable.

How EDBs Can Get Started in NZ

Step 1: Build the Data & Analytics Base

• Clean GIS network models.
• Integrate smart meter and substation monitoring.
• Deploy LV analytics to calculate feeder headroom.

Step 2: Adopt Standards

• Use CSIP-AUS / IEEE 2030.5 for device communications.
• Require DOE-capable devices for new DER connections.

Step 3: Prototype & Pilot

• Select 1–2 constrained feeders.
• Calculate day-ahead DOEs using smart meter data.
• Publish limits via an API/dashboard to customers and aggregators.

Step 4: Scale & Integrate

• Expand DOEs to all new DER connections.
• Integrate with flexibility procurement platforms.
• Link DOE dispatch with SCADA/ADMS for real-time operation.

Step 5: Report & Prove Value

• Hosting capacity uplift (kW connected without reinforcement).
• Capex deferral (avoided reinforcement spend).
• Reliability improvements (voltage compliance, SAIDI/SAIFI).

The Opportunity for NZ

New Zealand has a unique advantage: universal smart meters, strong DER uptake, and regulators signalling flexibility as a priority. By adopting DOEs now, EDBs can:

• Connect more renewable energy.
• Reduce network costs.
• Build customer trust.
• Prepare for the DSO future.

Final Word

Dynamic Operating Envelopes aren’t just an innovation - they are the foundation of modern distribution networks. For New Zealand EDBs, they represent a practical, low-regrets path to integrate DER, defer capex, and deliver fairer outcomes for customers.

The world is already moving - Australia, the UK, and the US are showing the way. New Zealand EDBs have the data, technology, and regulatory support to act now. The time to embrace DOEs is today.