How Heat Pumps in New Zealand are Replacing Gas & Support the Grid – Michael Richardson Part 1
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What's up everybody. So we got Michael Richardson from New Zealand. He goes by the name Nick for short. Now we've had Michael on the podcast before, uh, about a year or so back. So he's back to talk about energy management in the country of New Zealand specifically. And he's also going to talk to us about how their transition to heat pumps has been pretty decent so far. The other thing that you're going to hear me talk about is.

If you're going to have a heat pump, this is going by experience, what happened to me this past weekend. If you're going to have a heat pump with a compressor and it's going to start up and you lose power and then have to run a generator to provide heating for your family during that power outage, you're

It's always good to have an inverter style heat pump or put a soft start on the single speed compressor because you don't want to draw that initial lock rotor amps when that heat pump goes to start when you're running off the generator. So we're going to get into this conversation with Mick and we'll get to part two in a few days.

Welcome to the HVAC Know It All Podcast.

recorded from a basement somewhere in Toronto, Canada. Your host and HVAC tech, Gary McCready, will take you on a deep dive into the industry, discussing all things HVAC, from storytelling to technical discussion. Enjoy the show. Welcome back, Mick. So, New Zealand, New Zealand. Last time we talked about how your country has a lot of renewable energy sources, and you reached out again and you wanted to

have a follow-up conversation or a secondary conversation to that. So what's on your mind? Like, what do you want to, what do you want to discuss? Where do you want to take it? Yeah, I think, I think last time we talked about, um, some of the trials that we had underway here, uh, regarding heat pumps, um, uh,

I guess those who are dialing in my background is HVAC but also in the energy industry. I work for the national grid owner operator here but also have a small business that we're starting up as well Capital Coast HVAC and so passionate about two things energy and air conditioning and I think when I initially reached out to you Gary was it last year was more on the

I guess the energy side feedback to the uptake of electrification and sort of my take on it and some of the things that we're seeing on the national grid side of the fence. And yeah, I just thought it'd be good to have a follow up and chat a little bit more about some of the other activities going on and some of the technologies that we're seeing in HVAC, especially around heat pumps and

Yeah. So I just thought it'd be good to maybe open up a conversation about that. Yeah. So what, I mean, I've had many conversations with many different people on heat pumps and it's still, when you get on online and read through some comments on social media, there's people that still think that a heat pump can't work.

in a cold climate. So just give me your feedback over the last year on what you're seeing with heat pump technology yourself. Yeah, definitely seeing a big uptick in installations throughout the country here in New Zealand, both in sort of medium and colder climate areas. It seems to be a tendency

technology that's being, I guess, widely adopted across New Zealand as a solution for predominantly heating. We have a few areas up north on the North Island. New Zealand's split between two islands, North and the South Island.

The North Island where cooling is used here in Wellington, which is the capital. I think this year I used a cooling like five or six days out of the summer period. So it doesn't get heavily used for me personally. In our house, we have a ducted system as well as a small heat pump downstairs, ducted upstairs. And so the predominantly peak period for us here is winter for HVAC business. How cold are you getting in the winter?

Uh, so I guess some of the mornings can get, get frosty. So in Wellington, we're, we're sort of, I think they, the design period is down to about a zero degrees Celsius for ambient outdoor. Um, so not, not too bad then. Not too bad. Nothing like what you got there. Hey, if this, if the sun is out. So I was at a soccer training two weeks ago, the sun was out and it was negative one.

And I went outside just in a pair of shorts and a zip up and just to talk to a few parents and I was perfectly comfortable because the sun was out because we bared such a cold winter all season, zero degrees C with the sun out beating down on you. It was bliss. It was perfect. It was balmy, was it? Yeah. And I guess the work that I do with Transpower is around flexibility. So I'm the flexibility services manager there.

And what I guess what that does is that I look at ways that we can use heat pumps or other consumer devices that absorb energy or use energy and take that energy that's either stored or could be shifted away to help benefit the grid. New Zealand is pretty unique in essence that we've horizontally and vertically integrated market. So we have an energy market.

We have 29, we distribute energy to 29 energy distribution businesses. So that's basically taking the power, coordinating that from the generation and distributing out to like 29 utilities, I guess you'd say there in Canada or the States.

which is quite a lot when you think about a nation of 5 million people. So New Zealand is distributing power to North America? Is that what you just said? No, no. Oh, sorry. I misheard that then. I misheard that. No, we distribute energy between our own network companies. And so Transpower takes power from the generators, coordinates energy and moves it around the country. And that gets distributed out to North

in home users like myself via 29 edbs and so it's it's quite a lot when you think about it yeah if you look at the either uk or other parts of the world they're in australia most um land masses don't have that many edbs involved but then we also have energy retailers too which sit in the middle of that so it's for a small nation it's energy market is quite complex um

And so what we're, I guess what we're seeing a lot more now of energy retailers getting involved, energy gen tailors, a generator could also be a retailer here as well. So I guess it's, if you think about it, like California, Southern California Edison, they own the Polza wires all the way down to the smart meter and the generation. Well, it's all broken up here in New Zealand. There's different companies and different assets.

And what we're seeing a lot more now is these energy retailers getting involved in taking these distributed energy resources like heat pumps that can shift and move energy around at different times and offer solutions to their customer base, signing them up into demand response programs and basically energy arbitraging that resource on the market and earning some money from it or putting it into the reserves market. So

It's a pretty exciting time to be honest with you because heat pumps here are sort of an untapped resource for

for a CER, consumer energy resource or distributed energy resource. It can be flexed and it can be flexed in both directions. So in some cases you might have oversaturation of renewables where you need to turn things on or go the other way or shift them or turn them down. And because of the technology and heat pumps now with inverters and whatnot, they're a little bit more forgiving than the blanket, just turn them off.

Yeah, I've got a few questions though. So yeah, yeah. Question one, when the install of heat pumps are happening in your country of New Zealand, being that the coldest you're seeing is 32F or 0C,

Are you implementing any form of backup or auxiliary? Yeah, so in other parts of New Zealand, it gets colder than that. So on the South Island, we have alpine range and skiing and snow and good snow. But yeah, typically, most of those probably houses or cabins up there would have some sort of backup wood fire here, for instance. It could be electric element heating that would go on, but

What about like a gas furnace, like a dual fuel application gas furnace paired with a heat pump? Yeah. So furnaces, there's no, we have no natural gas resources on the South Island. So we don't have light gas, but on the North Island we do.

So we see a lot more of the furnaces installed on the North Island. There is a feeling or I'm seeing it from customers that come to me that are sort of when they get to their, when their furnaces are having issues, let's say they're 10, 12, 15 year old furnace, the consideration now shifting away from gas to a heat pump is conversation, which is happening pretty often.

It's quite interesting. There's definitely feelings on both sides of how long gas is going to be here around the country, what type of gas that might be, you know, and when it would be moving away. I think we're

because we're high like as you mentioned at the start we're highly renewable anyway getting to that last 20 percent 10 percent of renewable is pretty hard without some sort of transition gas something to get you to that 100 electrification so I don't think it's going away anytime soon but there is a push here to shift away from gas things like you know connection costs are going up so we just had an energy

connection costs that have just gone up, I think this month actually from retailers and that's a pass through from the cost of transmission to lines charges to the end consumer pays. And then we've also gas line charges are going up too. So there's that side of the fence that's pushing to make that transition if you can. There's some resistance, but

But yeah, the North Island, going back to your question, we do see a lot of furnaces. And they're very similar to what you have there, I guess, Gary. The majority of the ones are more sort of horizontal, laid down. We don't do the DX coil often much on the front of them like you would do there to add the cooling. They tend to be just for heating purposes only. Gotcha. Yeah. I have a thought. It's funny because

It was just this past weekend. We had an ice storm, basically just freezing rain, but it was, it was pretty bad. Like there's, there's a North of me, uh, I guess North East of me a little bit in a town called Barry. I just read a post on LinkedIn. Some of those neighborhoods are still without power and this was on the weekend. So we're talking three days in with no power. So you go outside, if you went outside on Sunday, uh,

All day, all you hear is generators running because everybody's, everybody's plugging in generators, the ones that have them, but you can hear them going. And I was thinking, cause some people are taking their generators, they're running extension cords into things like their refrigerator, maybe like a TV and a power bar to charge phones and, and going into their furnace for heat. And I'm thinking if I had a heat pump, that could be a bit of an issue off a generator. That's only got 3000 Watts, 4,000 Watts, something like that. But then,

When you think about it, there's a couple of things you can do there. And I just want to bring this up because it was fresh in my mind. If you have an inverter heat pump and it's, it'd be hard to run a heat pump that's not inverter or doesn't have a soft start because of that lock rotor amp that it draws right off the bat. It could potentially trip your generator, right? But if you had a soft start mechanism put on, I've, I've experimented with one on mine. This was like a, this was an ICM controls product. I put it on in the, just at the end of the summer that dropped my lock rotor amps in half. Right.

on startup with that compressor, which I thought was pretty significant. The other thing is a lot of the heat pumps now for cold climates, they're inverter based. So they're going to start soft and ramp up. So these are some considerations you got to think about when you have a power outage. You're going to put in a heat pump and you're reliant on that heat pump. You might want to put soft start. You might want to use inverter technology because if you do have a power outage,

and you got to run a generator, then these are things that are going to come to mind and pop up and cause you issues if you don't think about these things and implement them properly. Supplyhouse.com is your shortcut for part shopping. They have thousands of HVAC parts from all

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Since last time we talked, we had a fairly prominent solar company that went out of business here, a company called SolarZero, and they were deploying residential-scale solar

combined battery storage for customers. And the largest one in the country, mind you as well, I think they got up to around about 15 or was it 20,000 installations. They had an interesting business model where they would, I guess, they did a survey of the country, identified rooftops that suited their business model. So there was no out-of-pocket expense for the homeowner, but they would sign them up into these contracts that would be

long term. So it could be 10, 20 year term contracts to basically lease that roof space off the homeowner and sell the energy back. Now I'm not a fan of that type of business model but it was really interesting because they were making pretty strong headway, sort of investor backed and have recently gone out of business which means for us, for Transpower, if we wanted to use that type of resource as for a flex or demand response or whatnot,

that sort of 32 megawatts went away instantaneously. So, you know, going back to sort of the risks around resources that you can use to flex or these power outages or companies that go out of business, it's quite risky, especially if you're

you know, national grid owner operator that's reliant on not just that customer, but maybe, you know, a bunch of others to be there when you need it to help keep the lights on. You've got to find these other

I guess other options. And yeah, so that was sort of fairly big news that happened down here. And also, you know, those companies too, they're sort of getting more into the energy efficiency and combining these resources and gathering everything in the home. You know, they're tapping into the hot water, electric hot water heater

because it can you know it's like a thermal battery that and it can store in it as in store energy as in energy in the form of heat but you can delay that for a period of time and and use that flexible power like heat pumps pool pumps you know spas and and so these companies are going in there sort of you know dicing up the house and and using those resources and and and and doing it in a way for

hopefully the customer is not impacted, right? You know, at the end of the day, they have to answer the calls if something happens. They're the first line of defense. But as you know, when you're the last one in to touch something, you own it, you know. Of course you do. It's your problem. I know you know that. And so I think they'll experience some of that burn and some of that challenge as well as they start to put on these IoT devices and

wanting to take that ownership of, I guess you'd say it's somewhat of control, you know, away from the end user. The other thing I can touch on sort of is that sort of the heat pump trial that we did for internal Transpower staff and get up to like, I think 40 at the end and

The technology that we deployed was by a company called AmbiClimate. They had sort of an agnostic controller that could communicate to virtually any type of manufacturer heat pump.

Yeah, and it sort of converted Wi-Fi into infrared signals. So you might use Sensible, or I've heard that term, Sensible is another brand that does something similar. Sensible? Sensible, yeah. I don't think I've, no, I've never heard of it. Oh, okay, yeah. So they're a small little device. It's kind of a nice upsell for a heat pump system. I'm talking more like the ones that you see, like a Fidget Zoom, Mr. Bishi Panasonic, the

wall mount type or anything that's got like a hand remote. I do know what you're talking about because there's another company here in Canada, in Newfoundland, that has something similar. I don't recall the name of it right now, but it does something similar. Okay. I'll call out a few different brands because we've done a whole bit of work around them. So Tardo is a UK-based brand, T-A-D-O. They make something similar.

Sensible, Ambiclimat was one that unfortunately went out of business and that's the one that we were trialing. And that was the most technical and had all the really cool kind of AI features and their smart user interface app was pretty awesome. So these are add-on devices, fairly low cost. So if you come across a sort of an older generation Mitsubishi Panasonic Fujitsu Toshiba kind of heat pump system,

You could potentially upsell a customer and giving them capability to use their smartphone, tablet, be anywhere in control there. Yeah. So I just want to reveal to the audience what you're talking about just so they get a glimpse of it. So I found out about this technology in January when I was at a local show and it was Copeland. It was at the Copeland booth.

And I don't know what their affiliation is with the company at the moment, but it was there and they had it on show. So the way it works, just for the audience's sake, is basically you can have this wall mounted device basically that can control your ductless unit, but you can also control it via Wi-Fi.

Because you said Wi-Fi into an infrared signal because that's how the remote control works on the ductless. So basically, you could control any ductless system you put in by adding this device from anywhere in the world, just like you can with a Wi-Fi thermostat. So it's pretty cool technology, I thought.