2007 Australia - Smart Grid - Energy Management and Broadband

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Last updated: 11 Jul 2007 Update History

Report Status: Archived

Report Pages: 139

Analyst: Stephen McNamara

Publication Overview

This report provides high-level overviews and strategic analyses of the telecommunication developments in the electricity utilities market within Australia. It identifies key trends and developments, major projects and business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions in a rapidly changing environment, in which global warming must be taken more seriously.

The subjects covered in the report include:

  • The market in 2007;
  • Forecasts of opportunities in this market;
  • Major players, projects and cooperative models;
  • Demand side management;
  • Broadband power line;
  • Network architecture, standards;
  • Interference issues and challenges.

Executive Summary

Telecommunications is not new to the electricity energy utilities. ‘Ripple wave’ communication was invented back in 1896 and has been used ever since in the electricity grid – for instance, to switch hot-water systems on and off.

This was later developed into Power Line Communications (PLC) and for more than two decades, utilities have been looking at utilising this technology to develop new applications, especially in the area known as demand side management. However, very little progress has been made and only in recent years have we seen the rollout of so-called smart meters over this (still not very smart) narrowband technology.

In a rapidly deregulated market (breaking up the vertical industry structures), utilities were forced to become more sophisticated in their business management in order to increase their revenues. Still heavily regulated in relation to the prices they are permitted to charge for electricity, they looked at using unregulated assets to generate revenues that would be unaffected by regulation.

This led them to look at the telecommunications market.

Many utilities began to make available to the telcos access capacity on their communications networks; others made their pole and wire infrastructure available – to cable TV companies, for example – to string their cables next to the electricity wires. Others looked at retail opportunities, either reselling telephone services or offering broadband services; however most failed, or steered clear of this, as it was outside their core business area, and therefore outside their comfort zone.

New opportunities arose when the PLC technology was developed into a broadband version – Broadband Power Lines (BPL). This caused excitement in the market, since BPL could be offered as an infrastructure-based service in competition with the telcos. The utilities are far more comfortable with this as BPL could be an integral part of their own electricity network. However, the technology costs remain high and global standards are still a year away.

At the same time DSL was rolled out deeper and deeper into the broadband market, decreasing the business opportunities for BPL. BPL still has good opportunities in niche markets and Aurora in Tasmania has a commercial pilot in Hobart to test the waters there.

However, in more recent times, global warming has become a hot political issue. Electricity generation and usage accounts for 40% of carbon emissions and it became clear that the utilities would have to get serious about this issue. Most utilities don’t have an intelligent network in place that can alert them about outages or problems with the wires. They have no capability to manage demand and supply. All of this will be essential if they want to become serious about energy saving, and their carbon bill could quickly become the highest cost element of their business.

This has led to the concept of smart grids – building an IP-based, intelligent, carrier-grade telecommunications network over the electricity grid, with sensors and routers that will allow them to better manage the network. This would assist them in limiting their carbon reductions and provide them with a lucrative position on the carbon trading market.

Electricity will become more expensive and customers will also become involved, directly or indirectly, in the carbon issue – either voluntarily, because they want to make their own contribution to limiting the onset of global warming, or driven by the fact that they, in this case business users, might have to pay carbon tax.

A smart grid can be extended to people’s homes and businesses through BPL, but also through wireless, fibre and copper-based DSL technologies. Customers will get an information panel (a true smart meter) in their homes, which will provide them with information about their energy use, about pricing – especially in peak periods, when the prices will go up – and they will be able to interactively communicate with their utilities to limit their energy use, shift their use and even insert their own wind or solar power into the grid.

The industry (telcos and utilities) are collaborating with the government in developing plans for the introduction of smart grids in the country. Sydney-based Energy Australia launched the country’s first smart grid in mid-2007.

Highlights

  • Telecoms developments are driven by the electricity companies’ core network requirements. Key developments will take place in relation to their own grid upgrades.
  • Utilities have no intelligence in the network to detect faults, outages – let alone prevent them from happening through early detection.
  • Electricity generation and usages accounts for 40% of carbon emissions.
  • Network leakage results in a 10% to 20% loss of energy.
  • IP-based interactive intelligent smart grids – not ‘if’ but ‘when’.
  • Customers and their retail electricity providers have a high demand for intelligent interactive energy applications. This can lead to 15-20% energy savings.
  • Broadband Power Line is one of the access options that utilities can use to link customers to their smart grids.
  • Aurora in Tasmania has a commercial BPL pilot in operation in Hobart.
  • Sydney-based Energy Australia launched Australia’s first smart grid in mid-2007.
  • The government is working on a cost/benefit analysis for the rollout of smart meters.
  • Meters can’t be smart if they are not linked to an interactive broadband-based smart grid.
  • UtiliTel is leading an industry workgroup promoting the implementation of smart grids.
  • BPL standardisation is still a year away, hampering the introduction of cheaper equipment.
  • Other technologies such as WiMAX might well be more suitable for end-user access.
  • Smart grids offer opportunities to on-sell excess broadband capacity to telcos.

This report provides high-level overviews and strategic analyses of the telecommunication developments in the electricity utilities market. It identifies key trends and developments, major projects and business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions in a rapidly changing environment, in which global warming must be taken more seriously.

Further information provided:

  • Analysis of the opportunities in this market for utilities and telcos;
  • Essential information for policymakers in environmental issues, energy savings and broadband infrastructure developments;
  • The unique structure of the electricity utilities market, and the issues involved - essential knowledge for those not familiar with this industry;
  • The major players in the market and opportunities for partnership options;
  • How to use the open network approach, which allows for cooperation with the players in the broader industry;
  • Insight into and detailed information about the technologies and applications in the utilities telecoms environment;
  • In-depth technology assessments and analysis of BPL.

Data in this report is the latest available at the time of preparation and may not be for the current year.

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As usual, you’ve done a splendid job of bringing an industry well and truly into the spotlight.

I think that without your input and passion, Australia would have barely scratched the surface of the benefits that can and will be achieved with the wholesale adoption of Smart Grid and Smart City concepts.

Glenn Latch, SKYZER TECHNOLOGIES

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