news The Federal Government’s Auditor-General has published an extensive report on a trial of smart grid and other innovative technologies which was funded in the 2009 Federal Budget at a cost of $100 million, finding that quite a few components of the overall trial were delivered successfully, although some aspects did not quite deliver up to spec.
In May 2009, as part of that year’s Federal Budget, Communications Minister Stephen Conroy announced that $100 million worth of funding would be allocated to assist the development of smart grid technology that would help to create a “smarter and more efficient energy network”. Smart grid technology allows electricity utilities and customers of those utilities to better track their energy usage, allowing for more efficient use of the electricity network.
The concept has been heavily pushed since November 2008 by IT industry giant IBM, starting from November 2008, when the company’s then-chief executive Sam Palmisano first outlined the company’s “Smarter Planet” agenda, which includes among its aspects, a push to implement smart grid technology.
To implement the project, in June 2010 the Federal Government awarded a substantial grant to a consortium led by then-NSW energy utility EnergyAustralia (now Ausgrid). Other consortium partners include IBM, GE EnergyAustralia, AGL Energy, Sydney Water Corporation, Hunter Water Australia, and Newcastle City Council.
In October 2010, IBM issued a media release stating that it would play what it described as “a pivotal role” in the development of “Australia’s first smart grid network”.
This three-year project, according to IBM, was to begin immediately across five sites in Sydney and the Hunter (Newcastle, Scone, Sydney CBD, Ku-ring-gai and Newington) and represent “Australia’s first commercial-scale smart grid”.
“The technology will allow residents to see real-time analysis of electricity usage for their households and even for individual appliances, to help them make better decisions about energy efficiency in their homes and minimise their environmental impact,” the company said. “The smart grid demonstration will also test real-time, complex information about grid performance in order to improve control over the network for Australian energy transmission and distribution companies.”
“IBM is extremely proud to be a part of the successful consortium, and we’re delighted with the Government’s investment and support to broaden Australia’s smart grid,” said Glen Boreham, then-IBM Australia & New Zealand Managing Director. “The Smart Grid, Smart City demonstration is a critical step in developing the necessary infrastructure required to meet the energy demands of Australian citizens into the future.”
“One of IBM’s key priorities is to help utility companies transform energy, environmental and sustainability issues into opportunities that positively impact the world. Being a member of the consortium that will carry out this project is a reflection of IBM’s commitment to the energy industry and our vision for a smarter planet,” said Boreham.
According to an extensive audit report produced by the office of the Federal Auditor-General and published yesterday about the administration of the program (PDF), the project was largely successful, but with caveats.
The key deliverables were the deployment of smart meters into consumers’ homes; the trialling of new electricity tariff regimes and feedback technologies (such as an internet portal showing real‐time electricity consumption and costs); testing new technologies in the electricity network to enhance reliability and assist in the integration of renewable energy sources (referred to as grid‐side applications); a trial of 20 electric vehicles (EVs) to gather information about their potential broader rollout in Australia; and testing potential smart grid compatibility with the National Broadband Network (NBN), and other technologies, such as ‘smart’ gas and water metering.
The auditor noted that aspects such as the grid-side applications, energy resource management (such as roofstop solar panels or wind turbines and trial storage batteries), electric vehicle and smart meter trials deployed to customers’ homes were “completed largely in accordance with the funding agreement”.
However, other aspects were not delivered as planned, including the $20 million large-scale retail trial of smart meter technology. The auditor’s report states:
“Ausgrid’s grant application and the funding agreement had foreshadowed a retail trial involving ‘up to’ 20 000 participants. A trial design study commissioned early in the program by Ausgrid, and verified by RET consultants, reduced the target to a minimum of 4453 (with a ‘stretch target’ of 8333). However, challenges in the retail trial implementation included customer resistance to the technologies, delayed availability of appropriate smart meters, technological issues and difficulties in securing an electricity retail partner for the trial.
As a result, the final number of participants in the retail trial fell just short of the minimum target (at 4000 participants), and the trial was not fully in place for the optimal two summers (to gather the most comprehensive range of data).
Notwithstanding the reduced number of participants, the planned cost of the trial remained unchanged, primarily due to increased implementation costs. The estimated cost of the retail trial (around $20 million—or $5000 per participating customer) accounted for just over one‐fifth of the total expected expenditure for the program. The retail trial did, however, help to identify some of the issues that government and industry will need to consider if implementing a broader rollout of smart meters and their associated technologies.”
In terms of recommendations stemming from the audit, the report recommended that the two major departments involved — the Department of Industry and the Department of the Environment, enhance their internal controls to better control such projects in future.
This report comes at an interesting time. If I could make a broad and completely unscientific guesstimation about what it represents in the context of the wider industry, I’d say that what we see here is that smart meter technologies are indeed useful and can indeed be implemented in the way which companies like IBM have been telling us for some years.
However, given the way that all the hype around these technologies has completely died over the past several years, and the way that a lot of retail consumers in the Ausgrid trial dropped out, I would also say that the smart grid issue is increasingly looking like it was overhyped back in 2009. In 2014, what we can see is that it seems like it’s primarily a technology that electricity utilities — and not their consumers — need to pay attention to.
And, given the lack of other smart grid trials in Australia over the past half-decade, what we could probably also say is that smart grids are not yet really a mature technology. It’s probably not quite time for them to become really important just yet.
Now, I don’t know a lot about this sector, so I could be completely wrong about this. In addition, this audit report doesn’t go into the implications of the trial as much as I would like. It more deals with the administration of the project, rather than analysing its outcomes per se.
In this vein, I’m happy to be corrected — would welcome input on this issue from people who work in the energy sector with this kind of tech. These are just my broad impressions. Are smart grids important? And to what extent? I’d be interested to hear your thoughts.