SGA Melbourne Conference & Industry Drinks | October 2013

SGA Launches Key Documents in Parliament on Tuesday November 27th 2012 

Energy White Paper only First step 

Energy monitoring for households 

In their recent report ‘Broadband Connected Homes’ the CSIRO is investigating a consumer-centric approach to household energy monitoring and control. CSIRO has, in collaboration with an Australian company, Saturn South, developed a low-cost energy monitoring and control system for households. The system consists of smart circuit breakers hat can monitor and control (in the form of on/off switching) energy use at a circuit level for a household. These smart circuit breakers can be installed into existing residential switchboards, and send data via a Zigbee wireless link to a home network via a gateway device.

This allows the occupants to dynamically view their energy consumption at a circuit level (e.g. stove, air-conditioning, lighting and general circuits) on virtually any network connected consumer display device. It also makes it possible for the householder to elect to use an energy services provider to be able to shut down particular devices or circuits, such as air conditioning or water heating, for short periods during times of peak load in exchange for reduced costs.

PC Report: Electricity Network Regulatory Frameworks 

The Productivity Commission's issued its draft report “Electricity Network Regulatory Frameworks” on how electricity networks should be regulated. It indicates upfront that the 'Clean Energy Future' package – the 'carbon tax' – is not the main driver of higher electricity costs.

It confirms that the increase in network costs is what has been pushing up electricity prices around the country and the Commission analyses these cost in great detail.

One of the reasons for this increase in network costs is to add a level of intelligence to the grid that will allow (among other things) for ‘demand management’. The Commission states that 25% of people's power bills cover just 40 hours of peak demand a year. The report also confirms - as has been argued by Smart Grid Australia for the last 5 years - that there are potential savings to be had in electricity distribution that outstrip the cost of  the price on carbon.

SGA vision document: Towards Australia’s  Energy Future - The Enabling Role of Smart Grids highlights the important role of smart technologies that will enable the country to reap the social and economic benefits of this process.

The report comes out very strongly in favour of privatising the remaining electricity distribution assets. 

SGA Vision Statement 

Six months ago, I was beginning to wonder just how SGA should position itself in what is becoming a crowded landscape with seemingly every man and his dog talking about smart grids, writing reports, undertaking trials,  launching research projects, forming interest groups, running smart grid conferences and the like.

When SGA was established as the first organisation of its kind in Australia some 5 years ago, smart meters dominated thinking - and it was a very real challenge to shift the focus to a broader view where smart meters were viewed as just one element in the network of the future. SGA rose to that challenge, and its efforts in lobbying both Commonwealth and State politicians and bureaucrats directly contributed to a budget allocation of $100m for the Smart Grid Smart City (SGSC) initiative. In turn, that initiative put Smart Grids squarely on the radar of every Australian utility. Whether directly involved in SGSC or not, most utilities are now well-advanced in assessing smart grid technologies and formulating strategies with the intent of factoring them into their next rate cases. To some extent, it was starting to look like a case of "mission accomplished!".

However, any thought that SGA no longer has a clear role going forward has been swept aside by recent developments. In particular, rising electricity prices have put a spotlight on the industry - consumer sentiment is running hot - and politicians are looking to score points with voters wherever they can. In this climate, there is a very real risk that progress towards upgrading Australia's electricity infrastructure to meet the needs of the future will suffer. The challenges are as real now as they were when SGA first formed - only the character is different.

Without doubt, the price on carbon is contributing to rising electricity bills. However, there are other factors that are less well understood - for example, the continuing rise in peak demand which is driving the need to upgrade both generation and distribution capacity. These investments need to be recovered over average consumption, and that tends to have been stable or falling in the past couple of years. Its a powerful recipe for price increases!

At a more technical level, the popularity of distributed generation (especially roof-top PV arrays) is changing the whole pattern of energy flows in the grid - and the looming generation of electric vehicles will further disrupt much of the relative predictability on which network engineers have designed and built networks in the past. Improving visibility and control in the grid is no longer simply a "nice to have" - its becoming increasingly necessary to support the reliable delivery of a quality electricity supply. The good news is that Smart Grid technologies can also unlock a whole raft of new efficiencies in areas such as asset management, operations and maintenance - and so there are prospective savings (albeit, not especially well quantified at this stage) that will flow from the investment in modernising Australia's electricity infrastructure.

In response to the changing environment, SGA has recently developed a Vision Statement to set a coherent and well-documented direction for the next chapter of its activities. The statement will be launched at the September conference - less than 2 weeks away now - and will provide the foundation for an action program to make a positive difference in Australia's progress towards Smart Grids. All stakeholders and members of SGA will benefit from the success of SGA's program - whether they be utilities looking to upgrade their networks, technology suppliers, research and development organisations - or simply consumers wanting a reliable supply at the most efficient cost.

By way of some early insight into the key directions, the Vision Statement puts forward the following five recommendations:

1. Establish a common direction for all government policies and initiatives, forming a single cohesive view recognising that the Smart Grid is the foundation for unlocking Australia’s energy future.

2. Develop a framework that creates incentives for industry innovation to encourage breakthroughs in consumer engagement.

3. Review institutional arrangements to identify barriers that need to be dismantled to provide the most appropriate incentives for investment in modern technologies.

4. Promote broad collaboration to progress the above recommendations, recognising that the active participation of many stakeholders is needed to deliver these benefits.

5. Review and update education and training programs to reflect the more pervasive role that ICT will play in the electricity sector of the future.

More of the background to these recommendations will be discussed at the September conference - and in the coming weeks a program of visits to key politicians, decision makers, bureaucrats and policy makers will be developed to serve as the spearhead for SGA's efforts on this front.

To see SGA’s vision stamen document entitled “Towards Australia’s Energy Future” please follow this link: http://smartgridaustralia.com.au/SGA/Documents/Publication_120914.pdf

Robin Eckermann
Chairman SGA

Government should show leadership in smart energy policies 

As discussed in the previous blog, the cost of energy itself is becoming an increasingly small part of the overall energy economy. When we look further into the future with more renewable energy entering the market these costs will, percentage-wise, be reduced even further.  Increased decentralised energy production will create a significant increase in self-reliance both amongst commercial users and residential users. But after the initial investments in renewable energy technologies are made, also for the traditional energy companies who will start integrating them into their business,  the costs of energy itself will percentage wise reduce.

From an economic point of view the focus of the industry should therefore move from a business model based on energy delivery to one aimed at energy management. Apart from all the other developments in the industry this will add extra complexity – it will require a total overhaul of the industry’s structure, plus a fundamental change in business models. Fortunately for the industry this process will take 20 to 30 years to complete. However, with very large-scale investments underway (according to the recent Ross Garnaut report, $250 billion over the next 20 years) it is essential that these investments be based on moving towards that new environment.

If that money were to be spent in the way that investments have been made over the last 50 years, then the outcomes we will simply be increasing our existing problems, as a far more radical new approach is needed that will lead to a the total transformation of the energy market. Those investments should therefore be based on such a transformation. Considerable discussion is taking place regarding the $27 billion investment of the government in the NBN over the next ten years, but such scrutiny is not being applied to the much larger and probably more important $250 billion in energy investments.

These enormous investments can create significant social and economic benefits, and these benefits do not show up on the balance sheets of companies that are making private investments. These are commercial companies are not going to make social decisions. As the representative of the national interest the government should make sure that the right policies and initiatives are taken in order to achieve these national outcomes; and they will have to work with the industry to find the right balance between the commercial interests of these organisations and the national interest.

It is unlikely that these companies will make their investments simply to ensure those social and economic benefits – certainly not within the current legal framework. One could argue that the current regulatory system would deliver the opposite outcome since, in many cases, energy companies would be penalised if they were to make investments that were aimed at the national interest.

Most parties involved in these debates are now pointing to clear government leadership on the various energy issues and a whole-of-government approach.

Also, with new financial guidelines based on the Basel III agreement, the borrowing of large sums of investment money by private companies will become increasingly difficult. In order for this to happen the government will have to show clear leadership; and they should drive the process. With such leadership in place, the industry is more than happy to follow a clear energy efficiency action plan.  The reason for the confusion in the market regarding the various energy policies and initiatives at the moment is a lack of clarity and coordination and it seems that this situation is unlikely to change, which will only prolong the period of uncertainty.

Paul Budde

Consumers have tremendous expectations for future energy services 

Global Smart Grid Federation Report

Power of choice - giving consumers options in the way they use electricity 

Building a smart energy future 

SGA welcome’s the government’s package of energy efficiency programs designed to drive smarter energy use in business, local government, households and communities for a clean energy future.

The programs include:

• The Community Energy Efficiency Program – $200 million to assist local government, not-for-profit and community organisations to undertake energy efficiency upgrades to community infrastructure.
• The Low Income Energy Efficiency Program – $100 million to support groups of service providers to demonstrate smarter energy use in low income households across Australia.
• The Energy Efficiency Information Grants program – $40 million to support small and medium sized businesses and community groups by providing information and advice to make smarter energy choices.

SGA has been a long time supporter of using smart technologies to address the issues of climate change, energy efficiency and sustainability and is keen to play a key role in these new programmes.

NBN statement from SGA - 10 Oct 2011

Change in services driven by Sensing and monitoring information

• the use of sensing and monitoring developments across particular industry sectors of the digital economy,
• potential implications of digital capabilities for users,
• while the information revolution can potentially empower both organisations and individuals, it is also creating a pervasive environment that is increasingly less private, shrouded in technology, and raising questions about ownership and use of gathered information.

SGA welcomes NBN developments

Media Release