14 September 2010

The Australian

Australia's $60 billion energy sector will, for the first time, have a national, co-ordinated strategy to build and operate next-generation smart electricity networks.
The peak body for energy networks will tomorrow unveil its grand design to help operators build "modern" electricity networks that will give them access to information which was previously unattainable.

The Energy Networks Association includes ActewAGL, Aurora Energy, Country Energy, EnergyAustralia, Envestra, Ergon Energy, RailCorp NSW, SP AusNet and TransGrid.

Smart networks will show power flows in networks so utilities can automatically detect and repair faults, manage energy demands, easily detect ageing network assets and ultimately avoid crippling power blackouts.

Homes will be equipped with smart meters to monitor power usage and consumers would also be able to go online to check their power consumption patterns.

"The foundation infrastructure to build smart networks is available now," the strategy paper said. "However, before infrastructure deployment can take place electricity distribution businesses need to: perform tests, pilots and trials; develop standards and protocols; and develop commercial, policy and regulatory frameworks.

"The deployment of infrastructure will take place gradually over the next 20 years as ageing assets need replacement and as businesses are able to develop a commercial and regulatory case for investment.

"In parallel with the deployment of the smart infrastructure, businesses will need to change their processes and adapt to

new business models to fully realise the benefits of the smart network."

The ENA estimates it could take up to 30 years for the full potential of smart networks to be realised.

The two-year strategy has four priority areas for action -- the most important being consumer education and participation.

ENA will develop literature to explain the benefits of smart networks as most consumers aren't aware of its advantages and show customers how the technology can help track and eventually reduce power consumption.

ENA chief executive Andrew Blyth told The Australian he would like to model its education drive on the federal government's Digital Ready campaign, which had simple, straightforward messages four years ahead of time to explain the analogue to digital TV switchover.

"A study by McKinsey confirmed that we're neither behind nor ahead in smart networks . . . you don't want to be too ahead because you need to get the consumer with you (as a utility player)," Mr Blyth said.

The second area will focus on "customer protection mechanisms" which will see the group work alongside government to ensure new pricing arrangements don't burden consumers.

"It will be important for stakeholders to work together to ensure that the introduction of new service offerings is well understood and accepted by customers. Where a need is identified, governments will need to work with stakeholders to develop customer protection mechanisms, such as concessions, to ensure that vulnerable customers are protected from any hardship that results from new pricing arrangements that facilitate the delivery of the other smart network objectives.

"ENA's activities in this priority area involve working with other stakeholders to ensure that equity issues are addressed," the paper said.

The third area will touch on network capabilities -- the association will develop a library of commercial smart networks research and trials by the end of the year, to be updated quarterly.

The ENA will develop and advocate an industry position on spectrum needs of smart networks and work with NBN Co to deliver smart network communications.

The final point covers the development of commercial and regulatory frameworks so energy distribution companies will have a strong business case for investing in smart networks.

The ENA has been working on the strategy for the past 12 month, said Mr Blyth, who will present the strategy at the National Energy Conference in Sydney.

Meanwhile, the government's $100 million Smart City, Smart Grid project is well underway. In June EnergyAustralia was announced as the preferred applicant to trial the technology.

The government said it would sign a contract with the NSW utility to provide up to $100m in funding for the pilot.

EnergyAustralia spokeswoman Kylie Yates said the agreement was expected to be signed "very soon".

Mr Blyth said he looked forward to the results of that trial, and added that the ENA enjoyed a good relationship with new Climate Change and Energy Efficiency Minister Greg Combet, and Martin Ferguson, who retains his energy portfolio.