Smart grid market progressing, but fractured: Logica

New energy company report shows business case, lack of standards and the consumer obstacles to commercial-scale smart grids

Victoria’s failed smart meter rollout has prompted a radical shift in the way that smart grids are viewed by the energy sector, according to Logica.

The project, which suffered additional costs and strong criticism from community groups, has prompted electricity providers to consider the potential impact of smart grids on consumers, says a Logica-funded study into the Australian smart grid market.

“Much of the impetus in Australia for this change of thinking came about because of the lessons learnt from the Victorian smart meter rollout, which attracted substantial criticism,” the study reads.

“The bad press focusing primarily on cost rather than the benefits of energy management has heightened consumer awareness, more negatively than positively.”

Despite the issues with the Victorian project, smart grids are progressing at a fast pace in Australia with major energy providers including Integral Energy, EnergyAustralia, SP AusNet, Western Power, Aurora Energy, Hydro Tasmania and Ergon Energy all either trialling or having trialled smart grids in some form.

However, the report found there was “little commonality” between the projects with some being based around smart meters, demand management, integration with the National Broadband Network (NBN) or “other aspects” of communications infrastructure.

“EnergyAustralia’s Smart Grid, Smart City project is the largest and most high profile projects, but there are many others,” the report reads. “Some have cut back because of this project, which they see as essentially conducting a large scale pilot on behalf of the whole industry.

“Some pilots have been discontinued because it was realised they were not yielding results. But other pilots have been completed, or are complete enough that lessons can be drawn from them.”

On top of the need to get consumers on side, the challenges to commercial-scale smart grid rollouts included the need to develop stronger business cases and managing information.

“Everyone believes [smart grids] to be the way of the future, but there is still uncertainty about how to justify speculative expenditure with no clear and immediate benefit,” the report reads.

“A key aspect of the smart grid is that it will generate vast amounts of data about network performance and customer usage. There are significant concerns about how this information will be managed. How will the smart grid integrate with new communications technologies like the NBN? Will information be managed locally or centrally? How will the information be structured and accessed?”

In addition there were concerns that smart grid technology is as yet unproven.

“There are few standards and a lack of a clear roadmap,” the report reads. “There is some concern that products are taking too long to get to market – distributors hear the sales pitch from the vendor and then find they can’t yet buy the product.”

Security has also emerged as a major issue too, with EnergyAustralia backflipping on plans in November to build a WiMAX wireless broadband network, instead choosing long term evolution (LTE) as a technology base.

Also in November, Victorian electricity distributor SP AusNet said it was progressing with its use of smart meters, nearly completing phase one of its rollout of some 680,000 devices in the state.

Follow Tim Lohman on Twitter: @TLohman

Follow Computerworld Australia on Twitter: @ComputerworldAu

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