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Australia - Smart Meters in Victoria - Case Study


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Australia - Smart Meters in Victoria - Case Study

What at one point looked like a disaster story is rapidly turning into a success story. While things have certainly gone wrong in the deployment of smart meters in Victoria the lessons that have been learned have led to a turnaround of affairs and the State is currently looked upon as an example of the benefits that can be gained from smart meters.

With the benefit of hindsight it is clear that the vision of smart grids and smart meters we share today did not exist when the legislation for the rollout was passed in 2008. This led to some of the underlying elements of the plan being built upon the wrong foundations.

This Victoria rollout was prompted by serious electricity outages earlier in that decade. With temperatures more frequently soaring into the 40s an increasing number of air-conditioning systems were being installed and the capability of the electricity supply to deliver sufficient energy during these peaks was being seriously tested.

In 2006 the Council of Australian Governments (COAG) launched a cost benefit analysis for the rollout of smart meters. At that time BuddeComm argued that the MCE (Ministerial Council on Energy) should consider the broader option of smart grids rather than look at smart meters in isolation.

The program ran into serious difficulties after the Auditor-General of Victoria questioned the cost-effectiveness of the project, as costs were blowing out, from $800 million to $2.3 billion. Furthermore, a consumer revolt was brewing, similar to those taking place elsewhere in the world. Consumers were forced to pay for the rollout which they perceived did not supply them with any benefit there had been no consumer consultation or involvement at all. At the same time electricity prices were increasing significantly and it was perceived that meters only served to benefit the electricity companies, who were using them to increase costs further.

The debate was heavily influenced by a media frenzy, fuelling the discontent.

To the credit of the Victorian government they made some tough decisions about the rollout and got the project back on track. They learned from the lessons. Not all the mistakes could be undone and to a certain extent they will have to live with that, but the lessons are extremely valuable for the other states where such rollouts are still to take place.

In December 2011 the government decided to continue with the rollout; however it is implementing the recommendations of the Auditor General. By late 2012 they had turned the corner and turned the project into a positive one. By early 2014 the roll was for 90% completed.

Hot topics in this report include:

Smart meters, AMI, smart grids, super grid, energy internet, internet of things, M2M


1. Synopsis
2. Plan for national smart meter rollout
2.1 Ministerial Council on Energy (MCE)
2.1.1 National Smart Metering Program (NSMP
2.1.2 Emissions Trading Scheme (ETS)
2.1.3 Other developments
3. The rollout of smart meters in Victoria
3.1 First cab off the rank
3.2 The consumer revolt
3.3 Mandatory features
3.4 The financial backlash
3.5 The retailers are turning around
3.6 Technical limitations
3.7 Regulator missing in action
3.8 Early 2014 - roll-out nears completion
4. State Government Reviews
4.1 Concerns from Auditor-General
4.2 AMI program review
4.3 Key outcomes and concerns from submissions
4.4 Continuation of the roll out
4.5 Introduction of Flexible pricing
5. Key lessons learned
6. Demand management of electric vehicle charging using Victoria's Smart Grid
6.1 Recommendations:
6.2 Smart Grid
6.3 Demand management
7. Other Reports
Table 1 - Smart meter uptake mid 2013

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