27. Page 27Page 27
Strategic context
Australian Government & COAG Energy Council
• Review of RET Development of new Energy White Paper
• Aust Govt and jurisdictional policies COAG Energy Council priorities & work streams
AEMC
• Power of choice program Expanding competition in metering & services
• DNSP pricing arrangements Retail competition review …… and LOTS more
AER
• Better regulation reform program Cost allocation guidelines
• Service target performance incentive scheme (STPIS) review
AEMO
• Value of customer reliability
• Distribution network annual planning reports
28. Page 28Page 28
COAG Energy Council
Strengthening Network Regulation
• Fairer network rules
• A stronger AER
• Improvements to the appeals
mechanism
Empowering Customers
• Strengthening opportunities for
consumer engagement
• Enhanced access to better consumer
data
• Opt-in TOU pricing
• Greater demand side participation
opportunities
• Enhanced consumer protection
Enhancing Competition and Innovation
• Greater retail competition and
innovation
• ‘Fair and reasonable’ return for all
microgeneration
Ensuring Balanced Network
Investment
• A national framework for reliability
standards
• Investigating demand responsiveness of
the regulatory framework
• Ensuring efficient transmission
investment
31. Page 31Page 31
High level strategic themes
Existing COAG
Energy Council
market reform
program
Cost reflective
pricing for
consumers
Jurisdictional
government
and industry
leadership
Consumer
education and
industry
training
Innovation in
technology and
product
deployment
Need for
interoperability
standards
32. Page 32Page 32
Fault Detection, Isolation & Restoration FDIR
• has the potential to deliver significant economic
benefits
• heavily dependent on the value of customer
reliability (currently being reviewed by AEMO)
33. Page 33Page 33
Smart Meter Infrastructure (SMI)
• Two value propositions modeled:
• Full deployment, termed stand-alone
• Customer-led, with the smart grid
case assuming uptake with
installation of DG or DS
• Enabling infrastructure
34. Page 34Page 34
SMI – (stand-alone or full deployment)
• Not yet economic (with the exception of some
long-rural network topologies in some states)
• Avoided billing, metering and customer service
costs for urban and short rural network not
sufficient to offset capital costs for SMI
35. Page 35Page 35
SMI + Dynamic Tariffs + Cust Feedback
• Clear positive economic case for immediate
deployment of dynamic tariffs in Australia
(requiring SMI)
• If dynamic tariffs are voluntary, not all
customers will adopt the offer
37. Page 37Page 37
SMI + Dynamic Tariffs + Cust Feedback (2)
• Without dynamic tariffs customers will be presented
with a strong financial incentive to install larger
distributed generation systems
• If inclining block (or flat) tariffs are maintained in
Australia it is unlikely that distributed storage will be
deployed due to a lack of financial incentives
38. Page 38Page 38
Customer Research Survey Results
Key findings relating to dynamic pricing
• High satisfaction with SGSC Customer Applications network
& retail products
• Most popular trial products involved discrete peak events
• BudgetSmart also popular
• Financially vulnerable customers derived more benefit and
satisfaction from products than other households
Engagement with feedback technology vs. overall
savings
0.54
0.3
0
0.2
0.4
0.6
Daily or 2-3 times per
week
Weekly or less often
Overallsavings
39. Page 39Page 39
DG + DS + SMI + Dynamic Tariffs
• Dynamic pricing drives the deployment of smaller
solar PV systems and CHP compared to BAU
• Balanced by the deployment of around 3.5 GW of
storage capacity
• Under BAU, negligible storage is likely to be
deployed
40. Page 40Page 40
Electricity bill impacts (residential)
$1,712
$244 $47 $2,003
$156 $2,159 $420
$332
$1,407
0
500
1,000
1,500
2,000
2,500
3,000
SG Bill
Customer with
DG/DS
Cost of DG/DS Cross Subsidy
SG
SG Passive SG Benefits BAU Passive
Customer
Cross Subsidy
BAU
Cost oF DG/DS BAU with
DG/DS
AnnualBillImpact($)
Average Bill - SG Average Bill - BaU
41. Page 41Page 41
Electricity bill impacts (business)
$8,390
$1,711
$3,083 $13,184
$2,108 $15,292 $9,251
$2,620
$3,421
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
SG Bill
Customer with
DG/DS
Cost of DG/DSCross Subsidy
SG
SG Passive SG Benefits BAU Passive
Customer
Cross Subsidy
BAU
Cost oF
DG/DS
BAU with
DG/DS
AnnualBillImpact($)
Average Bill - SG Average Bill - BaU
43. Page 43Page 43
Transitioning industry and consumers
• Balancing:
• Risks and opportunities from new smart grid
investment
• Financial, reliability and environmental benefits
and issues
• People
• Industry and electricity consumers -
understanding, education and change
44. Page 44Page 44
Maximising the benefits and opportunities
• Need for interoperability standards
• Managing greater volumes of distributed generation
and introducing distributed storage
• Examining the business case for:
• Cost reflective consumer prices
• In-grid smart grid technologies
• Consumer feedback technologies
• Key costs and risks of inaction
48. Page 48
Thank You
Arup Energeia
Level 10
201 Kent Street
Sydney NSW 2000
Level 23 Gold Fields House
1 Alfred Street
Sydney NSW 2000
P +612 9320 9647
E ranelle.cliff@arup.com
W www.arup.com
P +612 8097 0070
E bbosler@energeia.com.au
W www.energeia.com.au