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Australia - Smart Meters in Victoria - Case Study

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Last updated: 4 May 2015 Update History

Report Status: Archived

Report Pages: 14

Analyst: Paul Budde

Synopsis

What at one point looked like a disaster story is rapidly turning into a success story. While things have certainly gone wrong in the deployment of smart meters in Victoria the lessons that have been learned have led to a turnaround of affairs and the State is currently looked upon as an example of the benefits that can be gained from smart meters.

With the benefit of hindsight it is clear that the vision of smart grids and smart meters we share today did not exist when the legislation for the rollout was passed in 2008. This led to some of the underlying elements of the plan being built upon the wrong foundations.

This Victoria rollout was prompted by serious electricity outages earlier in that decade. With temperatures more frequently soaring into the 40s an increasing number of air-conditioning systems were being installed and the capability of the electricity supply to deliver sufficient energy during these peaks was being seriously tested.

In 2006 the Council of Australian Governments (COAG) launched a cost benefit analysis for the rollout of smart meters. At that time BuddeComm argued that the MCE (Ministerial Council on Energy) should consider the broader option of smart grids rather than look at smart meters in isolation.

The program ran into serious difficulties after the Auditor-General of Victoria questioned the cost-effectiveness of the project, as costs were blowing out, from $800 million to $2.3 billion. Furthermore, a consumer revolt was brewing, similar to those taking place elsewhere in the world. Consumers were forced to pay for the rollout which they perceived did not supply them with any benefit – there had been no consumer consultation or involvement at all. At the same time electricity prices were increasing significantly and it was perceived that meters only served to benefit the electricity companies, who were using them to increase costs further.

The debate was heavily influenced by a media frenzy, fuelling the discontent.

To the credit of the Victorian government they made some tough decisions about the rollout and got the project back on track. They learned from the lessons. Not all the mistakes could be undone and to a certain extent they will have to live with that, but the lessons are extremely valuable for the other states where such rollouts are still to take place.

In December 2011 the government decided to continue with the rollout; however it is implementing the recommendations of the Auditor General. By late 2012 they had turned the corner and turned the project into a positive one. By early 2014 the roll was for 90% completed.

In 2015, an analysis made of the benefits of the roll out was added to the report.

Hot topics in this report include:

Smart meters, AMI, smart grids, super grid, energy internet, internet of things, M2M

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Paul is by far, the leading telecommunications analyst in Australia. Not only is his company's research first class and timely, it is superbly contextual to the complexities of today's modern media and communications technology. He is always extremely generous in sharing his knowledge with others and has a great ability to connect people together and be a thought leader on topics of National interest such as the NBN, FttH and Smart Grids.

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