By Robin Eckermann, Chairman, Smart Grid Australia
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 organization 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 Au$100 million (US$104.6 million) 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. It’s a powerful recipe for price increases!
At a more technical level, the popularity of distributed generation (especially rooftop 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” – it’s 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 modernizing 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 provides 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 organizations, or simply consumers wanting a reliable supply at the most efficient cost.
By way of some insight into the key directions, the vision statement puts forward the following five recommendations:
- Establish a common direction for all government policies and initiatives, forming a single cohesive view recognizing that the smart grid is the foundation for unlocking Australia’s energy future.
- Develop a framework that creates incentives for industry innovation to encourage breakthroughs in consumer engagement.
- Review institutional arrangements to identify barriers that need to be dismantled to provide the most appropriate incentives for investment in modern technologies.
- Promote broad collaboration to progress the above recommendations, recognizing that the active participation of many stakeholders is needed to deliver these benefits.
- Review and update education and training programs to reflect the more pervasive role that ICT will play in the electricity sector of the future.
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.