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Australia - Smart Grid Market

Attention: There is an updated edition available for this report.

This annual report offers a wealth of information on the emerging smart grid market in Australia. The report includes analyses, statistics, forecasts and trends. It provides a comprehensive insight into the progress of the developments and examines the key issues in the market and the business opportunities arriving from these new developments.

  Subjects covered include:

  •          Overview of the electricity utilities market and its key developments.
  •          The concept of smart grids, what it is, what it can do and who is involved.
  •          The reasons why smart grids are critical both for the country and the industry.
  •          The role of government and the role of industry.
  •          The range of applications of smart grids and its interaction with the various sectors.
  •          The activities of Smart Grid Australia in national policy and strategy developments.
  •          The latest developments in the smart meter projects.
  Researchers:- Paul Budde, Dominic Hebert, Kylie Wansink
Current publication date:- June 2009 (5th Edition)
Next publication date:- June 2010

BuddeComm’s annual publication Australia - Smart Grid Market profiles this emerging market. It provides policy and strategy analysis as well comprehensive market overviews on the electricity utility market and the added smart grid eco system that is rapidly developing around it.

  The report reveals that the Australian electricity market will undergo a massive transformation over the next decade. The transformation will be caused by environmental and climate change developments, as well as the fact that production of fossil fuels has reached its peak due to unprecedented demand. This will result in significant price increases which will accelerate the development of alternative energy resources.

  The electricity industry is therefore on the eve of the most important overhaul in its existence. It is one of the last industries to face digitalisation - this is essential to manage the above mentioned pressures.

  Furthermore, with higher end-user energy prices, customers will become more vocal and will need better ways to manage their own energy use and their carbon footprint. All of this leads to developments around intelligent electricity infrastructure or smart grids. These developments will bring with them enormous challenges, but also untold new business opportunities. Our report provides general background information on the electricity utilities market, focussing on the communications aspects.

  While privatisation will assist companies to be better prepared for these developments, major government policy initiatives are required to give clear direction to the market.

  Smart grids support the delivery of electricity to consumers using digital communications technology to improve efficiency and reduce costs. The next few years will be a crunch years for smart grids. Fortunately the implementation of the government’s smart meter project, planned for 2007 has been delayed till 2009, enabling the utilities involved to review their plans, while at the same time allowing for a national review of the regulatory regime. This needs to be changed so that utilities will be encouraged to invest in smart grids rather than just in smart meters. Victoria took the leadership in smart meters and that made many utilities also focus on the underlying infrastructure; building on this we will start seeing the first smart grids arriving in Australia in 2009

  The major players building smart grids in Australia are mostly large energy retailers and producers supported by IT and telecommunications firms. Country Energy and EnergyAustralia are perhaps the most active in this area. The period over 2009 and 2010 is likely to see significant development by firms relating to smart grids driven by government initiatives.

  Slowly some of the CO2 policies such as the Cap and Trade system as well as policies in relation to renewable energy started to become clearer. Intensive lobbying aimed at risk aversion rather than at looking towards new opportunities, is making it more difficult to drive changes through new technologies for renewable energy and for smart grids. It could well be that in the end, clean energy policies driven by photovoltaics are going to be the catalyst for the development of smart grids.

  Utilising the momentum of this development the government has earmarked a $100 million investment in a smart grid demonstration project which will be linked to the National Broadband Network initiative in Australia.

  This is a significant shift away from the smart meter debate which originated in 2004. This initiative was around the utilities’ need to be able to capture electricity usage in 30-minute intervals. This enables differential pricing by time-of-day and enables utilities to discourage certain types of ‘non-time-critical’ use during periods of high demand. Reducing peaks has a major impact on electricity generation costs - alleviating the need for new power plants and cutting down on damaging greenhouse emissions. However, based on the latest environmental policies, the debate needs to be shifted to smart grids.

  Key highlights:

  • In 2009 new business models are beginning to emerge as the players entering the smart grid space begin to seriously take note.
  • The market is shifting from a focus on energy savings to one on facilitating the feed in and the management of renewable energy.
  • This is closely linked to the rapid developments in photovoltaic technologies.
  • The government is supporting this with a $100 million trans-sector demo project which involves the Departments of the Environment, Energy and Broadband.
  • Until recently the market was stuck within the rather narrow context of smart meters. Good progress has been made, with Victoria now leading this development.
  • Utilities are also involved in the NBN and in particular plans to invest $250 million in the backbone network for this project.
  • Country Energy is set two launch two large scale smart grid projects in 2009. Most other utilities are now at least looking at pilot projects.
Data in this report is the latest available at the time of preparation and may not be for the current year.  

1. Smart Grids and the Communications Revolution
1.1 The communications revolution
1.2 Key role for utilities
1.3 How to proceed
1.4 What are the challenges?
1.4.1 Vision and strategies
1.4.2 The leadership role of the CEO
1.4.3 Telco monopolies
1.4.4 Slow-moving utilities
1.4.5 Egos and politics might get in the way
1.5 Conclusions

2. Where Energy Meets Comms
2.1 Climate changes issues
2.2 The sun is setting on fossil fuels
2.3 Regional distribution is lagging behind
2.4 The communications issue
2.5 User generated energy (UGE)
2.6 Energy Exchanges
2.7 Government direction is needed
2.7.1 Stimulus packages supporting smart grids
2.8 People power will drive developments
2.9 Solution coming from elsewhere
2.10 Energy retailers need to come onboard
2.11 Conflicting interests
2.12 New kids on the block
2.13 Conclusions

3. Energy & Environmental Issues
3.1 Smart grids and climate change
3.1.1 Catalysts for change
3.1.2 Vision for the future
3.2 The reality of global warming
3.2.1 Smart meters
3.3 Trillions to be spent on electricity grids
3.3.1 ICT solutions for global warming and energy saving
3.4 Smart grids at the centre of the energy revolution
3.4.1 A global movement
3.4.2 The climate change driver
3.4.3 Who will lead the industry?
3.4.4 Smart grids more than efficiency
3.4.5 Peak oil the economic driver
3.5 Will we get it right in 2009?
3.5.1 Industries need to work together
3.5.2 Global policies - Copenhagen Climate Council
3.6 2009 developments in the renewable energy market
3.6.1 A highly volatile market
3.6.2 China will dominate equipment supply market
3.6.3 European industry needs major overhaul
3.6.4 Government leadership is needed
3.7 Conclusion

4. Climate Change and Photovoltaics
4.1 Climate change policies
4.1.1 Global warming - a new important political consideration
4.1.2 Cap and Trade scheme
4.1.3 Renewable energy scheme
4.1.4 New technologies
4.1.5 Smart grids and carbon trading
4.2 Trans-sector approach to climate change
4.2.1 CO2 & Emission Trading Systems are becoming too esoteric for most
4.2.2 Home energy improvements
4.2.3 Smart grids
4.2.4 Smart communities and smart buildings
4.2.5 Empowering people to develop their smart community
4.2.6 Smart grid demo could be the catalyst
4.2.7 Government information and education campaign
4.3 Smart grids driven by user-driven photovoltaics
4.3.1 Good for the economy, the environment and saving energy
4.3.2 Government still stuck with dumb meters policy
4.3.3 Lack of trans-sector approach
4.3.4 Current grid can’t handle renewable energy
4.3.5 International examples of a failing grids
4.3.6 Customers want to be in charge
4.3.7 Without smart grids 20% renewable target will not be reached

5. Electricity Utilities Markets
5.1 Utilities markets
5.1.1 The Australian electricity utilities market
5.1.2 Regulatory overview
5.1.3 Industry investments
5.1.4 Utilities and telecoms
5.2 Trends in the electricity market
5.2.1 The industry in 2009
5.2.2 Growth in energy consumption eases
5.2.3 NUS Electricity Report and Cost Survey
5.2.4 ETS will finally push the market into action
5.2.5 Renewable energy
5.2.6 Competition might come from different directions
5.2.7 People-driven demand

6. Smart Grids Market Overview
6.1 Market analysis 2009
6.1.1 Budget 2009-2010 $100 million for smart grids
6.1.2 Smart grid economics
6.1.3 Where are we in Australia in mid-2009
6.1.4 The national smart meter debate
6.1.5 Industry issues
6.2 The national smart meter debate
6.2.1 The government’s Smart Meter policies
6.2.2 Analysis of smart meter policies
6.2.3 How to facilitate a smart grid
6.2.4 Industry push for smart grids
6.2.5 From smart meters to smarts grids
6.2.6 Automated Meter Reading (AMR)
6.3 Major players & projects
6.3.1 Smart grids overview
6.3.2 Major players and projects
6.3.3 Country Energy
6.4 Demand side management
6.4.1 Introduction
6.4.2 Home automation services - analysis
6.4.3 Demand Side Management (DSM)
6.4.4 Remote monitoring
6.4.5 Home networking
6.4.6 Wireless IP technology for the SCADA industry
6.5 Smart grids and BPL
6.5.1 Introduction
6.5.2 Full circle for utilities telecoms
6.5.3 Smart grids and BPL
6.5.4 BPL technology reports (separate reports)
6.5.5 Regulatory
6.6 Smart Grid Australia
6.6.1 Smart electricity grids assisting Australia in addressing climate change
6.6.2 Smart Grid Australia Vision Statement
6.6.3 What is Smart Grid Australia?
6.6.4 Smart Grid Australia members
6.6.5 Backgrounder - UtiliTel

7. Smart Cities, Buildings & Communities
7.1 Smart communities, buildings and cities
7.1.1 Introduction
7.1.2 Key components of smart cities
7.1.3 Strategies for smart communities
7.1.4 Brief examples of smart communities
7.1.5 Intelligent/smart technologies and systems
7.1.6 Intelligent Communities Forum

8. Glossary of Abbreviations

List of Tables
Table 1 - European investments in renewable energy - 2006 - 2007; 2020; 2030
Table 2 - Worldwide electricity consumption - 1973; 1980; 1990; 2000; 2020; 2030
Table 3 - Wholesale MWh prices - 2009 - 2011
Table 4 - Energy generation Australia - 2008

List of Exhibits
Exhibit 1 - Starting dates of the five technology cycles of the last 200 years
Exhibit 2 - Key elements of techno-economic revolutions
Exhibit 3 - Masdar City - Abu Dhabi
Exhibit 4 - Is this a case of regulatory failure?
Exhibit 5 - Three stages of smart grids
Exhibit 6 - Photovoltaics
Exhibit 7 - Who owns power?
Exhibit 8 - Energy market deregulation in Australia
Exhibit 9 - Utilities and telecoms
Exhibit 10 - Emissions Trading Scheme (ETS)
Exhibit 11 - The results of climate change by 2050
Exhibit 12 - What is a smart grid?
Exhibit 13 - Smart grid applications
Exhibit 14 - Smart air-conditioning control
Exhibit 15 - Country Energy: smart grid in action
Exhibit 16 - Non-regulated business (telecoms) activities
Exhibit 17 - Listed energy information/energy management services
Exhibit 18 - HomePlug from NetComm
Exhibit 19 - Mobile IP technologies available in Australia
Exhibit 20 - Smart Grid Australia - a new organisation
Exhibit 21 - Smart homes
Exhibit 22 - Learning from e-cars

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