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:
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.
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