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National Strategy for Smart Electricity Networks

Summary
September 2010
National strategy for smart electricity networks—summary September 2010

The electricity supply challenge


Electricity businesses around the world are facing a challenge—to supply increasing amounts of electricity while
meeting community and government calls for more reliable, environmentally sustainable and affordable energy
supplies. The demand for increasing supplies of electricity is primarily driven by a growing population, combined
with lifestyle choices to live in larger houses with fewer residents and an increasing number of appliances. In
particular, the level of peak demand (the maximum demanded at any given time) is growing significantly and, in
some areas, already exceeds the capacity of the electricity network for a few short periods each year.
Electricity distribution (poles and wires) businesses are meeting these challenges by changing the way they operate
and gradually modernising their networks with smarter technologies—in essence integrating information and
communications technologies (ICT) into existing network infrastructure and business systems to create a smart
electricity network (or smart grid).
These changes mean that electricity distribution businesses of the future will enable the provision of a greater range of
services than in the past. In addition to delivering an ‘essential service’, smart electricity networks will be an enabler of a
range of other products and services that will benefit customers, the Australian community and the environment.
Electricity distribution businesses will continue to have primary responsibility for delivering electricity to customers.
However, there are several other players that may also deliver energy management infrastructure and services to
customers, such as in‑home display units or web interfaces that provide detailed energy consumption information and
allow customers to manage their electricity supplies either themselves or through their service provider. These tools
provide a means through which customers can potentially alter their behaviour, such as reducing energy consumption
or shifting the timing of their electricity use, in order to reduce their emissions and minimise electricity cost increases.
Looking into the future, the widespread adoption of distributed and renewable electricity generation, energy storage
technologies and electric vehicles will facilitate a reduction in Australia’s carbon emissions. However, the large scale
connection of such intermittent power sources has the potential to adversely affect network performance, and
hence will require smarter networks to ensure the reliability and quality of electricity supplies is not diminished.
By optimising network operations and facilitating customer responses, smart network investments are a more efficient
means of meeting increasing demands for electricity than the alternative of investments in generation or network
assets that would only be needed for a few short periods a year. Reducing the load on network assets at peak times
will also reduce the risk of asset failure and improve the reliability and quality of electricity supplies at these times.

What is a smart electricity network?


The technologies, devices and systems that make up a smart network will vary across electricity distribution
businesses, just as existing electricity networks vary according to the geographic, climatic, ownership and business
parameters that the businesses operate within. Examples of smart network components include:
»» integrated communications infrastructure that enables near real-time, two-way exchanges of information and power
»» smarter measurement devices (including advanced metering infrastructure) that record and communicate
more detailed information about energy usage
»» sensors and monitoring systems throughout the network that keep a check on the flow of energy in the system
and the performance of the network’s assets
»» automatic controls that detect and repair network problems
»» advanced switches and cables that improve network performance, and
»» IT systems with integrated applications and data analysis.
There are a range of other technologies, devices and applications that are often associated with smart networks,
such as customers’ energy management systems, renewable energy supplies, electric vehicles and energy storage
technologies. However, it is important to understand that these are new opportunities that are enabled by smart
networks, rather than being a component part of smart networks.
The move to smart networks is not a revolution. Australian network businesses have always invested in smarter, more
efficient, technologies, business processes and systems as they become available. However, with ageing assets, a carbon
constrained future, and greater availability of intelligent solutions, it is time to increase the scale, scope and pace of
technological change. This means deploying technologies and network management practices, which are largely in place
throughout higher voltage electricity transmission networks, down to the lower voltage electricity distribution networks.
National strategy for smart electricity networks—summary September 2010

The Strategy
The electricity network industry holds primary responsibility for the deployment and operation of smart networks.
Individually, electricity distribution businesses are undertaking a number of activities, as appropriate to their
network’s and customer’s needs. These include tests and trials of technologies; developing a business case for
investment; and developing their own deployment strategies.
There are, however, a number of issues that are common to most electricity distribution businesses and that benefit
from the businesses acting together through the energy network industry’s peak body, the Energy Networks
Association (ENA). These include sharing insights and experiences and developing common messages, frameworks
and technical standards, which will assist in achieving a timely and cost-effective transition to smart networks.
ENA has developed this National strategy for smart electricity networks (the Strategy) to provide a framework for the smart
network activities that the electricity network businesses are undertaking jointly through ENA. The aim of this Strategy is to:
»» inform stakeholders of the drivers and objectives of smart networks
»» inform stakeholders of the priorities and issues ENA is looking to engage with them on, and
»» facilitate information sharing and coordination, which will contribute towards a timely and cost-effective
transition to smart networks.
ENA has identified four priority areas that help to organise, prioritise and bring a focus to the activities being
undertaken by ENA and its members. Two of the priority areas—customer support mechanisms (which
encompasses understanding the impact on customers of changes to service offerings, and protecting vulnerable
customers) and the commercial and regulatory frameworks (which encompasses the development of a feasible
business and regulatory case for investment)—underpin the other two priority areas, which are aimed at facilitating
customer responses and enhancing network capabilities.
In addition to providing overall guidance, the Strategy sets out specific critical activities that ENA is undertaking
throughout 2010 to 2012. This provides a coordinated focus for activities by providing stakeholders with an
indication of the issues that ENA will be looking to engage upon during this time. It should be noted that in
addition to ENA’s tasks there are many and varied activities underway within the individual electricity distribution
businesses that ENA represents and other stakeholders.

Priority areas Activities by Objectives/outcomes


stakeholder
Improve the cost
Network businesses effectiveness of network
operations and investments
Facilitate
main Enhance Create a platform
customer network
education and for customer choice
capabilities
participation
ENA
Develop Develop Improve the reliability,
underpinning customer commercial quality and security of
support and regulatory electricity supplies
mechanisms frameworks
Facilitate a reduction in
Other stakeholders carbon emissions

National strategy for smart electricity networks


National strategy for smart electricity networks—summary September 2010

Implementing the Strategy


The transition to smart electricity networks will require considerable effort, including customer awareness
campaigns; research and trials of technologies; the development of common standards and protocols (including
machine to machine communications, data security and privacy), and fundamental changes to the industry’s
skill set and core industry processes. While electricity distribution businesses are primarily responsible for the
development of smart networks, they cannot achieve this change alone.
The other stakeholders that are critical to this process are: governments, regulators, customer advocacy groups,
customers, retailers, generators, equipment and appliance manufacturers and importers, IT and communications
providers and researchers. To meet the challenges ahead in a timely and cost effective manner it is essential that all
stakeholders share knowledge and experience, cooperate and coordinate efforts.
ENA plays an important role in this process, advocating the Strategy, consulting other stakeholders about their role
in its implementation, and coordinating and facilitating the sharing of knowledge and development of technical
solutions policies, standards and procedures.
ENA welcomes the opportunity to work with all stakeholders throughout this process.

Next steps
As consideration of the policy, regulatory, technical and operational issues advances, ENA will continue to
contribute to discussions, release position papers and engage the views of other key stakeholders. ENA will
periodically evaluate and update the Strategy and will release issue/ technology specific roadmaps to ensure
stakeholders are kept informed of the current status, critical tasks, major issues, planning and deployment
timeframes, and industry’s progress against plans.
For further details, ENA’s National strategy for smart electricity networks is available at www.ena.asn.au.

Energy Networks Association


Level 3, 40 Blackall Street
Barton ACT 2600
Ph +61 2 6272 1555
Fax +61 2 6272 1566
Email info@ena.asn.au
Web www.ena.asn.au
ABN 75 106 735 406