Why V2G, incentives, and pricing reform are converging in Queenstown — and why the rest of NZ should care
Queenstown is growing fast. Permanent population, visitor numbers, electrified transport, and electric heating are all rising together, and the local electricity system is feeling it. The existing high-voltage conductor feeding the region is approaching its limits. The traditional response is straightforward but expensive: build more transmission. In this case, Transpower has identified the need for a second high-voltage line into the Queenstown area, at a cost of around $160 million — a cost that would ultimately be paid by electricity consumers.
The Queenstown Electrification Accelerator (QEA) emerged precisely because that answer felt increasingly wrong. Instead of assuming Queenstown must always import more power from afar, QEA asked a different question: can we meet a large share of new demand locally, and manage peaks well enough to defer or avoid that upgrade altogether? The idea was to turn Queenstown’s rooftops, batteries, and flexible loads into an internal virtual power station, reducing stress on the upstream network at exactly the times it matters.
At first, the focus was on rooftop solar and stationary batteries. That made sense — they’re visible, familiar, and clearly useful. But over time, a much bigger insight has landed. Electric vehicles are not just loads. They are batteries — and big ones. A typical EV battery is five times the capacity of a home battery. The only difference is that it’s dual-purpose, on wheels.
Once you see EVs that way, the opportunity changes scale. Most cars are parked most of the time at home. In a place like Queenstown, with high EV uptake potential and strong daily peaks, those parked vehicles represent a massive, mostly untapped energy resource. When coupled with Vehicle-to-Grid (V2G), EVs can discharge small amounts of energy back into the local network during winter mornings and evenings, precisely when demand is highest and the conductor is most constrained.
That realisation is a turning point for QEA. But one critical ingredient has been missing until recently: a clear, immediate incentive for EV owners.
Technology alone doesn’t change systems. Incentives do. This is where AMBER-style retail models enter the picture. Retailers like Amber Electric expose customers to real wholesale electricity prices, minute by minute, and use software to automate charging and discharging. When prices are low, your EV charges. When prices spike, your EV can discharge — and you get paid at the actual spot price.
Sell into a price spike $65/kWh (red), buy back when the price crashes (green), automated by Amber software.
That changes everything. V2G stops being a nice idea and becomes a household income stream. Your car earns money while it’s parked, not because someone asked you to help the system, but because the price made it worthwhile. Multiply that across hundreds or thousands of vehicles, and the impact is no longer theoretical. Peaks are clipped, local congestion eases, and the case for a $160 million transmission upgrade starts to weaken.
The really interesting part is what happens next — beyond Queenstown.
Cash is the strongest trigger for consumer change. Once consumers are rewarded minute-by-minute for flexibility, downstream effects accelerate. Internal combustion vehicles start to look economically irrational, not just environmentally outdated. EVs aren’t just cheaper to run; they earn revenue. That alone disrupts the ICE market without mandates.
At the same time, the gentailer model comes under pressure. Scarcity pricing becomes harder to sustain when consumers can see prices and respond in real time. Retailers are forced to evolve, shifting from selling averaged kilowatt-hours to rewarding flexibility and offering services that help customers optimise.
True cost to deliver electricity
One more piece of the puzzle makes the Queenstown Electrification Accelerator potentially transformative for consumers across New Zealand: it creates the conditions to change how transmission and distribution (T&D) services are priced and paid for. Today, T&D charges are largely recovered through regulated returns — the Weighted Average Cost of Capital (WACC) + 7.5% — and averaged, socialised costs that take little account of where or when electricity is delivered. QEA’s emerging local virtual power station — rooftop solar, stationary batteries, and increasingly EVs with V2G — means much of the energy used in Queenstown is generated, stored and consumed within the local network, avoiding long-distance transmission and upstream congestion. That makes avoided network costs real and measurable, and naturally lends itself to flipping from WACC to Distribution Locational Marginal Pricing (DLMP), where electricity delivered locally is cheaper because it truly costs less to deliver.
5 Minute Settlement
At the same time, batteries and V2G-enabled vehicles can respond almost instantaneously to system stress, providing peak support and grid stability in minutes rather than half-hours. Under today’s 30-minute settlement regime, that fast response is blurred into an average and systematically under-rewarded, and it also enables strategic behaviour within the trading period that can keep higher-cost plant (coal/gas) marginal for longer than necessary. Combining DLMP with a move toward 5-minute settlement — pricing that reflects both where and when electricity is delivered — would align prices with physical reality: consumers providing local, fast flexibility would be paid fairly, gaming opportunities would shrink, and network charges would increasingly reflect the true cost of delivery rather than smoothed, WACC-based averages. The result is a compounding consumer benefit — households earn more from V2G participation, face lower network charges by avoiding infrastructure they no longer need, and help demonstrate a pricing model that can scale nationally as New Zealand’s electricity system becomes more distributed and flexible.
Live 5 minute pricing on the Amber phone app.
This is why Queenstown matters. QEA isn’t just an electrification project. It’s a preview of how incentives, technology, and pricing reform converge. By combining rooftop solar, batteries, EVs, V2G, and AMBER-style spot market access, Queenstown can show how consumers earn more, networks spend less, and the system becomes more resilient.
If it works here — in a fast-growing, constrained region facing a $160 million decision — it can work anywhere in New Zealand. And the most powerful part is that it doesn’t rely on lobbying for change. It lets behaviour lead, prices speak, and the system adapts because it has to.
References
Queenstown V2G Trial https://www.qea.nz/v2g
Queenstown Electrification Accelerator https://www.ea.govt.nz/industry/power-innovation-pathway/tranche-1-pathway-initiatives/queenstown-electrification-accelerator/
How Amber app works https://www.youtube.com/watch?v=POLAzkNjmbs&t=916s
EA: Marginal Spot Pricing https://www.ea.govt.nz/news/eye-on-electricity/how-marginal-electricity-spot-pricing-reflects-cost/
Locational Marginal Pricing https://static.transpower.co.nz/public/bulk-upload/documents/Mkts%20101%20-%20Locational%20Marginal%20Pricing%20WEB.pdf
Electricity Options to meet Queenstown growth https://www.energisingqueenstown.co.nz/options