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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 key smart grid and smart meter developments.
  • The concept of smart grids, what it is, what it can do and who is involved.
  • Issues in relation to network efficiency, climate change and customer benefits.
  • The role of government and the role of industry.
  • Overview and update on the Smart Grid/Smart City Demonstration Project.
  • The activities of Smart Grid Australia in national policy and strategy developments.
 


This will be a crunch year for smart grids. By the middle of the year the outlines of the country’s first smart grid project should become visible, and over the next three years important lessons will be learned for a national roll out. This will also stimulate others to separately, from the demonstration project, progress their own smart meter and smart grid roll outs. Several projects in Victoria will start showing the first results of this process. They took the leadership with smart meters, which made many utilities focus on the underlying infrastructure - building on this we will start seeing their versions of smart grids arriving in Australia in 2010. There will be further pressure on the government to better align energy and environmental policies as well as electricity regulations. Governments can use their influence here to encourage electricity utilities to invest in smart grids rather than just in smart meters. The $100 million Smart Grid/Smart City (NEEI) project is discussed in a separate report. 

Smart City/Smart Grid ProjectThe previous government in Australia failed to embrace the smart grid concept, instead it launched a national (not so) smart meter policy. When it became clear that political change was in the air the industry became more interested in the development of smart grids. While in Opposition, the Labor Party had already demonstrated an interest in this and under the leadership of the Prime Minister the $100 million Smart Grid/Smart City project (also know as National Energy Efficiency Initiative - NEEI) was launched. Paul Budde from BuddeComm played a key role in this process. Paul established Smart Grid Australia, the industry alliance that was instrumental in lobbying for the project. In late 2009 the implementation study was presented and this has provided a sound basis for the project. The aim is to link 9,500 homes to a smart grid during the period 2010-2013. The project will become the blueprint for a national rollout.

 Major Players and Projects

Smart grids support the delivery of electricity to consumers using digital communications technology to improve efficiency and reduce costs. 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 firms in this area. The period over 2010-2013 is likely to see significant development by firms relating to smart grids driven by Government initiatives.

 Climate Change and PhotovoltaicsThe fundamental shift that has taken place in environmental policies since 2007 has a huge effect on the utilities market. Energy policies that were developed prior to this now need to be considered in relation to the new climate change and environmental realities - and for the ICT and energy industries this will involve checking government initiatives such as smart meters and national fibre telecoms networks against the new directions. By 2009 some of 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 more 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 the be the catalyst for the development of smart grids 

Demand Side ManagementPower Line Communications has been used since the 1890s to send low level telecoms signals out to activate or deactivate devices along the electricity grid. This technology was further developed over the last century and is used, for example, for the off-peak hot water service that most electricity companies offer their customers. Broadband Power Line started to arrive in the late 1990s. Simultaneously the energy companies are also being forced to look for telecoms solutions for their core business and are looking at Demand Side Management services to better manage their network, offer better services to their customers and handle the gigantic increase in electricity demand throughout the world and at the same time manage security issues and the environmental impact of all of that. It looks like DSM will only reach its full potential once combined with the development of smart grids.

 Smart MetersWhile developments in Automatic Meter Reading (AMR) and Demand Side Management (DSM) have been taken place over many decades, the current smart meter debate originated in Victoria in 2004. This started with the utilities to modernise the meter network which would amongst other things, allow them 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.  

Based on the latest environmental challenges, the focus needs to be shifted to smart grids, and smart meters should only be considered in the broader context of the modernisation of electricity networks through the introduction of sensing, communications and information technology into the grid. 

Smart Grids and the Communications RevolutionThe communications revolution is an important element of the broader ICT revolution, and it is unfolding before our very eyes. We are right in the middle of a transition from old communications structures (mainly one-way streets) to new intelligent structures that are fully-interactive and video-based. This is not simply a technology-based development - it brings with it massive changes in the way we live, work and communicate. It impacts on healthcare and education, as well as on environmental services such as smart electricity grids. This necessitates collaboration between the various industries such as utilities, telcos, IT, vendors and consultants. As well as the benefits the transformation brings to the nation it also brings with it massive new business opportunities. The energy industry will be one of the last on the planet to be affected by the ICT revolution. A total business transformation will be required over the next 5-10 years. 

Grid IT - Where Energy Meets CommsThere is now widespread agreement of the need for smart grids; however the regulatory system and the risk adverse electricity distribution structure are hampering a more rapid deployment. This is creating opportunities for other telcos and companies such as Google and Microsoft to enter this market. Energy and comms technologies offer a powerful coalition that could lead to an energy/comms revolution, resulting in unprecedented new opportunities that will benefit the planet, save energy and thus lower costs and create new business opportunities.  

National Broadband Network based on Trans-sector ModelTrans-sector thinking will be required to guide us through the next stage of human evolution. We draw attention here to the importance of looking across sectors to create synergy. BuddeComm has previously discussed at length the opportunities within the ICT industries of utilising new telecoms networks for e-health, e-education, smart grids (managing renewables, saving energy), etc. The Australian government is leading the world in trans-sector thinking. This also requires a new approach, towards all infrastructure projects, and to look at the potential synergies between the building of roads, sewerage systems, water and gas pipe networks as well as telecoms and electricity networks.

 Smart Cities, Buildings and CommunitiesThis then leads to the concept of smart communities, based on intelligent infrastructure such as broadband (FttH) and smart grids, so that connected and sustainable communities can be developed. However, before these smart communities can be built, trans-sector policies and strategies need to be developed. They can’t be built from the current silo structure that dominates our thinking; but require a holistic approach which includes environmental issues such as self sufficient energy buildings, energy exchanges for renewable energy and e-cars, delivery of e-health, e-education, e-government services as well as digital media and Internet services.

  Data in this report is the latest available at the time of preparation and may not be for the current year.

1. The Smart Grid Market
1.1 Latest news and developments
1.1.1 The Prime Minister on smart grids
1.1.2 Meters in Victoria not so smart
1.1.3 Smart grid: $5 billion in annual benefits
1.1.4 Electricity industry still not sure about smart grid
1.1.5 Smart grids and CO2 emission savings
1.2 Where are we in Australia in 2010?
1.2.1 Can we develop a holistic policy?
1.2.2 Smart grid concept gathering momentum
1.2.3 Smart grids require policy changes
1.3 Regulatory framework
1.3.1 Action needed
1.3.2 Facilitating smart grids
1.3.3 International benchmarks
1.3.4 New spectrum proposal boost for smart grids
1.4 ICT solutions for global warming and energy saving
1.5 Industry issues
1.5.1 Utilities need to be modernised
1.5.2 Technology solutions need to be followed through
1.5.3 The need for trans-sector approach
2. Smart City/Smart Grid Project
2.1 National Energy Efficiency Initiative (NEEI)
2.1.1 Launch of the project
2.1.2 Key reasons for the project
2.1.3 Implementation study
2.1.4 Recommendations
2.1.5 Key objectives of the project
2.1.6 Key applications
2.2 Analysis Smart Grid/Smart City Project - late 2009
2.2.1 Leadership from the top
2.2.2 Trans-sector approach on two levels
2.2.3 From vision to implementation
2.2.4 Congratulations to all parties involved
2.2.5 Two key problems ahead of us
2.2.6 Australian leadership on the line
2.3 Smart grid economics
3. Major Players and Projects
3.1 Smart grids overview
3.2 Key smart grid projects
3.2.1 Introduction
3.2.2 Fault Detection Isolation and Restoration (FDIR)
3.2.3 Substation and feeder monitoring
3.2.4 Distributed Generation enablement
3.2.5 Other applications
3.3 Country Energy
3.3.1 Overview
3.3.2 Radio over IP Solution
3.3.3 Smart grid initiative from Country Energy
3.3.4 EnergyAustralia
3.3.5 AGL
3.3.6 Powerlink
3.3.7 Western Power
3.3.8 Ergon - Nexium Telecommunications
3.3.9 SP AusNet
3.3.10 TransGrid
3.3.11 Integral Energy
3.3.12 ETSA
3.3.13 Smart electricity metering in FttH project
3.3.14 IBM’s Intelligent Utility Network Coalition
4. Climate Change and Photovoltaics
4.1 Climate change policies
4.1.1 Global warming - a new important political consideration
4.1.2 Copenhagen Climate Council
4.1.3 Australia is catching up
4.1.4 Cap and Trade scheme
4.1.5 Emissions Trading Scheme (ETS)
4.2 Renewable energy
4.2.1 Australia lagging behind
4.2.2 Solar cities
4.2.3 Renewable energy scheme
4.2.4 Competition might come from different directions
4.2.5 People-driven demand
4.3 Trans-sector approach to climate change
4.3.1 CO2 and ETS are becoming too esoteric for most
4.3.2 Home energy improvements
4.3.3 Smart grids
4.3.4 Smart communities and smart buildings
4.3.5 Empowering people to develop their smart community
4.3.6 Smart grid demo could be the catalyst
4.3.7 Government information and education campaign
4.4 Smart grid driven by user-driven photovoltaics
4.4.1 Good for the economy, the environment and saving energy
4.4.2 Government still stuck with dumb meters policy
4.4.3 Lack of trans-sector approach
4.4.4 Current grid can’t handle renewable energy
4.4.5 International examples of failing grids
4.4.6 Customers want to be in charge
4.4.7 Without smart grids 20% renewable target will not be reached
5. Demand Side Management
5.1 Introduction
5.2 Home automation services - analysis
5.3 Demand Side Management (DSM)
5.3.1 Services overview
5.3.2 DSM applications for residential users
5.4 Remote monitoring
5.4.1 Intermoco
5.4.2 AMRS (Aust) Pty Ltd
5.5 Home networking
5.5.1 Early trials
6. Smart Meters
6.1 The road from AMR and DSM to smart grids
6.1.1 Automated Meter Reading (AMR)
6.1.2 Demand Side Management (DSM)
6.1.3 In-home display devices
6.2 The Government’s smart meter policies
6.2.1 Ministerial Council on Energy (MCE)
6.3 Smart meter policies - analyses
6.3.1 Victoria first cab off the rank
6.3.2 The once-in-a-lifetime smart grid opportunity for Australia
6.3.3 Key to smart grids: the right vision from the government
6.3.4 Open networks
6.4 From AMR to smart meters
6.4.1 ENA takes smart metering policy initiative
6.4.2 The broader view of Smart Grid Australia
6.4.3 Overview of early smart meter developments
6.5 Smart meter projects
6.5.1 Western Power
6.5.2 Energy Australia
6.5.3 SP Ausnet
6.5.4 Country Energy
6.5.5 Integral Energy
6.5.6 Ergon Energy
7. Smart Grids and the Communications Revolution
7.1 The communications revolution
7.2 Key role for utilities
7.3 How to proceed
7.4 What are the challenges?
7.4.1 Vision and strategies
7.4.2 The leadership role of the CEO
7.4.3 Telco monopolies
7.4.4 Slow-moving utilities
7.4.5 Egos and politics might get in the way
7.5 Conclusions
8. Where Energy Meets Comms
8.1 Climate changes issues
8.2 The sun is setting on fossil fuels
8.3 Regional distribution is lagging behind
8.4 The communications issue
8.5 User Generated Energy (UGE)
8.6 Energy Exchanges
8.7 Government direction is needed
8.7.1 Stimulus packages supporting smart grids
8.8 People power will drive developments
8.9 Solution coming from elsewhere
8.10 Energy retailers need to come onboard
8.11 Conflicting interests
8.12 New kids on the block
8.13 Conclusions
9. National Broadband Network based on Trans-sector Model
9.1 Trans-sector awareness update 2010
9.1.1 Sectors are starting to understand the benefits
9.1.2 Commitment from the Prime Minister
9.1.3 The NBN can pay for itself
9.2 E-Services in the context of national broadband
9.3 Introduction into trans-sector thinking
9.3.1 Fragmented society requires cohesive leadership
9.3.2 Problems in most silos
9.3.3 National welfare depends on new ways of thinking
9.4 A matter of leadership
9.4.1 Obama’s leadership - a catalyst for change
9.4.2 Digital Economy Industry Work Group (DEIWG)
9.4.3 Work in progress: political leadership
9.4.4 Trans-sector thinking at highest levels in Australia
9.4.5 Towards trans-sector government
9.5 Barriers to Broadband Adoption
9.6 We lack the structures to implement trans-sector visions
9.7 Multiplier effect for the NBN
9.8 Trans-sector regulation
9.8.1 Regulations need to be rewritten
9.8.2 FttH will change telecom models
9.8.3 Utilities-based regulation
9.9 Taking away blockages
10. Smart Cities, Buildings and Communities
10.1 Introduction
10.2 Building smart cities to ease the stress
10.2.1 A population of nine billion people
10.2.2 The role of smart cities
10.2.3 We need to use people power
10.2.4 Education, information, empowerment
10.2.5 Changes are starting to drive action
10.3 Key components of smart cities
10.3.1 Smart grids
10.3.2 Next Generation Telecoms/National Broadband Networks
10.3.3 Open networks
10.3.4 Smart buildings/homes
10.4 Strategies for smart communities
10.4.1 Tran-sector thinking
10.4.2 Rebuilding communities
10.4.3 Greenfield communities
10.5 Brief examples of smart communities
10.5.1 India
10.5.2 China
10.5.3 Europe
10.6 Intelligent/smart technologies and systems
10.7 Intelligent Communities Forum
11. Glossary of Abbreviations
List of Tables and Exhibits
Table 1 - Market share of energy generation in Australia by energy source - 2006 - 2008
Table 2 - European investments in renewable energy - 2006 - 2007; 2020; 2030
Exhibit 1 - Proposed timeline
Exhibit 2 - Country Energy: smart grid in action
Exhibit 3 - Non-regulated business (telecoms) activities
Exhibit 4 - Emissions Trading Scheme (ETS)
Exhibit 5 - The results of climate change by 2050
Exhibit 6 - Photovoltaics
Exhibit 7 - Listed energy information/energy management services
Exhibit 8 - HomePlug from NetComm
Exhibit 9 - Smart grid applications
Exhibit 10 - Smart air-conditioning control
Exhibit 11 - Starting dates of the five technology cycles of the last 200 years
Exhibit 12 - Key elements of techno-economic revolutions
Exhibit 13 - Is this a case of regulatory failure?
Exhibit 14 - Energy market deregulation in Australia
Exhibit 15 - Smart City - Masdar City - Abu Dhabi
Exhibit 16 - Smart homes
Exhibit 17 - Smart shopping
Exhibit 18 - Example of trans-sector collaboration in a smart city
Exhibit 19 - Learning from e-cars

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