Australian Smart Energy Market


Disruptions in the energy market are taking place with increased frequency. These changes have been dramatic over the last seven years. In the past we have thought of these changes as ‘modernisation’, or ‘transformation’, but with the changes accelerating, ‘disruption’ is a more suitable way to describe what we are experiencing. And it is not expected to slow down in 2016 and beyond.

With a better understanding of the complexity involved in the transformation of the electricity industry the words ‘smart or future energy’ are becoming more prominent. BuddeComm believes that the term ‘smart grids’ is too narrow and that ‘smart energy’ is better suited – especially once the communications developments in national mobile and fixed broadband networks start to converge with smart grid developments. Smart grids unfortunately have become synonymous with smart meters, again leading to too narrow a view on this market.

Smart energy signifies a system that is more integrated and scalable, and which extends through the distribution system – from businesses and homes and back to the sources of energy. Developments at the edge of the network will increasingly determine its future direction. A smarter energy system has sensors and controls embedded into its fabric. Because it is interconnected there is a two-way flow of information and energy across the network, including information on pricing. In addition to this it is intelligent, making use of proactive analytics and automation to transform data into insights and to efficiently manage resources.

This links with the telecoms development known as M2M or the ‘internet of things’ (IoT). For this to happen various functional areas within the energy ecosystem must be engaged – consumers; business customers; energy providers; regulators; the utility’s own operations; smart meters; grid operations; work and asset management; communications; and the integration of distributed resources.

With energy consumption expected to grow worldwide by more than 40% over the next 25 years demand in some parts of the world could exceed 100% in that time. This will produce an increase in competition for resources, resulting in higher costs. In an environment like this energy efficiency will become even more important.

Quite apart from any increased demand for energy in specific markets, the move to more sustainable technologies – for example, electric vehicles and distributed and renewable generation – will add even more complexity to operations within the energy sector. As was again confirmed at the COP21 in Paris, technological innovations will have to play a larger role in climate change adaptation.

Concerns about issues such as energy security, environmental sustainability, and economic competitiveness are triggering a shift in energy policy, technology and consumer focus. This, in turn, is making it necessary to move on from the traditional energy business model. Renewable energy, linked to distributed energy systems and battery storage, is going to be the game-changer here.

As a consequence electricity utilities could end up in a ‘spiral of death’ situation similar to that of the companies that invested in the building of the internet infrastructure – they may own the means of delivering electricity and associated services, but may not be able to take advantage of the new business opportunities that will arise. This will limit their opportunities for future growth. Instead companies should develop a ‘vortex of opportunities’.

Another problem will surface when, due to users reducing consumption and producing energy themselves through energy efficiency strategies, the traditional pricing models become inadequate in terms of maintaining the energy infrastructure.

The potential for transformation of the energy industry to smart energy is still at a very early stage. Valuable advances have already been made in some areas but consensus needs to be reached regarding a collective approach to interoperability and technical standards.

Key Developments:

Smart cities, smart communities, smart buildings, connected communities, M2M, drones, IoT, big data, data centres, cloud computing, smart grids, broadband, smart meters, smart homes, EV, PV, batteries, storage, 4G, 5G.

Organisations mentioned in this report:

NEM, NBN, AGL, Google

Table of Contents

  • 1. Synopsis
  • 2. From UtiliTel to Smart Grid to Smart Energy and Smart Cities.
  • 3. Market and industry analyses
    • 3.1 No smart energy policy for Australia
    • 3.2 The grid itself is slowly becoming smarter
  • 4. Electricity utilities and IoT
  • 5. Progress hampered by lack of smart energy policies
  • 6. Problems ahead for the smart meter rollout in NSW
  • 7. Will telcos become the OTT players in smart energy?
  • 8. Industry Transformation
    • 8.1 The Five Disrupters
    • 8.2 Identifying the Five Disruptors
      • 8.2.1 Ecosystem of the Grid
      • 8.2.2 Distributed Generation and Storage
      • 8.2.3 Future of Transportation
      • 8.2.4 Renewable Economics
      • 8.2.5 Cost to Value
  • 9. Community owned energy retailer.
  • 10. Disruptive retail plan for renewable energy
  • 11. Energy distribution Challenges for the future
  • 12. Delighting and exciting electricity customers
  • 13. Electricity ‘death spiral’
  • 14. Key trends and Developments
    • 14.1 The effect of storage technologies on smart grids
    • 14.2 Google's acquisition of Nest will affect the utilities
    • 14.3 Resource and energy management are hot issues all around the world
    • 14.4 Energy Internet of Things
    • 14.5 Transactive Energy
    • 14.6 Driving smarter energy usage through consumer education
    • 14.7 Smart technology to improve generation performance
  • 15. Business analyses
    • 15.1 Australian Smart grids from a global perspective
    • 15.2 Business case for smart grid appears strong
    • 15.3 Home Automation Service Strategies
  • 16. Market Analyses Australia
    • 16.1 Ground-breaking standard for smart grids
    • 16.2 Investments in the Australian smart grid market
    • 16.3 New business opportunities for mining and energy industries
    • 16.4 Energy in Australia remains cheap
    • 16.5 Peak demand requires a smarter energy distribution concept
    • 16.6 Government should show leadership in smart energy policies
    • 16.7 Smart technologies challenging traditional energy scenarios
    • 16.8 The business case for solar energy is getting closer
  • 17. Key developments Australia
    • 17.1 AGL launches battery storage
    • 17.2 Households can save $100-$200
    • 17.3 Spending increases to $2.4 billion in 2012
    • 17.4 NBN facilitates wind farm
    • 17.5 Fuel Poverty
  • 18. Surveys and statistics
    • 18.1 Energy supply and use statistics
    • 18.2 2014 Australian Energy Update
      • 18.2.1 Energy consumption
      • 18.2.2 Energy production
      • 18.2.3 Electricity generation
      • 18.2.4 Energy trade
      • 18.2.5 UBS: Tesla Powerwall can deliver six-year payback in Australia
    • 18.3 Australian energy survey
    • 18.4 Worldwide smart grid spending reached $46.4B in 2015
    • 18.5 Microgrids revenue to reach $17.3 Billion by 2017
  • 19. Industry reform
    • 19.1 Two decades in the making
    • 19.2 Retail reform
    • 19.3 Deregulation of retail prices
    • 19.4 NEM Review
    • 19.5 Network Costs
    • 19.6 Network pricing reform
  • 20. Separate background reports
  • Exhibit 1 - Example - Solar PV

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Number of pages 61

Status Archived

Last updated 21 Mar 2017
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Analyst: Phil Harpur

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