Smart Grid in Australia

Executive summary

Australia's first commercial-scale project - Smart Grid Smart City has commenced in 2009. It is a three-year demonstration project to test applications and produce data in order to be a reference case to smart grid projects afterwards in Australia. However, lack of common understanding on standards of applications may be an obstacle to smart grid deployment that Australia have to face. The main purpose of this report is to show the rollout of smart grid projects in Australia and find out potential opportunities as well as challenges.

1. Introduction

Energy requirement is dramatically increasing worldwide, which may not be satisfied by current electricity grid system, though it has served us well for a long period. A smart grid applies advanced technology to make it work more efficiently and bring us a low-carbon future.

Australia has commenced its work on smart grid project since recent years. In 2009, the Australian Government announced Federal Budget for initiating Australia's first commercial-scale smart grid project - Smart Grid Smart City (SGSC). As a demonstration project, it is of great significance to help the development of smart grid in Australia to move toward to the next stage by testing a number of applications and applying advanced technologies.

This report will cover a brief introduction to smart grid and the smart grid commenced in Australia, including the current status of smart grid in Australia, SGSC program, obstacles Australia faces and a perspective of Australia's smart grid in the future.

2. A Smart Grid

Smart grid is an electricity power grid that integrates advanced information and communications technology with electricity infrastructure such as smart meters, sensors, to enable two-way information flow between users and distribution substation; and real-time monitoring and control of the grid.

The benefits of creating a smart grid are not only to improve the efficiency and effectiveness of the generation, transmission and distribution, and usage of power; but also to better integrate renewable energy and distributed generation in current electricity network. Consequently it helps to alleviate global warming issue by accelerating the progress on reduction greenhouse gas emission. Besides, consumers can manage their energy consumption and control their costs when well using in-home display (IHD) devices or smart meters. About 7% of energy usage would be reduced and 15% in peak demand period [1]. In United States, when deploying these widely, up to 15% saving of the peak lads equals more than 100 GW, or the need to build 100 large coal-fired power plants over the next 20 years, which could save up to US$200 billion in capital expenditures on investment of new plan and grid [2]. Smart grid is essential to support wider use of plug-in hybrid electric vehicles (PHEVs) instead of gasoline cars. However, some countries put their efforts to modernize the grid to be smarter are mainly driven by specific goals based on different requirements of traditional electricity network. Taking United States for instance, more reliable system will help it reduce power outages of two hours per capita per year while it is only 16 minutes in Japan [3].

3. Smart Grid in Australia

The smart grid is in its early stage in Australia. It has evolved from concept to reality since 2009 and there was a general lack of clear understanding on how smart grids would play out in Australia. Energy companies were still at early phase of developing smart grid strategies, said Paul King, Logica's Smart Grid Industry Consultant [4].

There are two major reasons driving Australia to create smart grids. It has the world's longest interconnected electricity grid system across all Australia's states and territories except Western Australia and the Northern Territory. It will be an advantage when the smart grid is going to be promoted nationwide. Another driver is reduction of carbon-dioxide emission. Abundant coal resource in Australia leads to low cost of electricity, but high cost of environmental issues in terms of greenhouse gases. 200 million tons of carbon dioxide released in 2008 accounts for more than a third of Australia's total CO2-e emissions[5]. The per-capita greenhouse gas emission rate is in leading position among developed countries.

3.1 Status of Smart Grid in Australia

Many trials of smart grid applications have been conducted in Australia, such as smart meters, and distributed generation (DG) etc. The State Government of Victoria is rolling out Advanced Metering Infrastructure (AMI) program. More than 900,000 meters have already installed across Victoria until late 2011 [6], and it was announced that all households and small businesses would need to have their electricity meters replaced by smart meters by 2013 [7]. However, far more than in Australia, 7.3 million smart meters have installed in US by early 2011 [web 08], and it is estimated that even over 52 million smart meters will be installed by the end of 2012 [8]. In Italy, Italy's main power utility, Enel has deployed more than 30 million since 2001. Smart meter is now a major part of investment on smart grid worldwide. It costs California's investor-owned utilities US$4.5 billion on deploying smart meters, while Enel spent €2.1 billion in installation, however about €500 million is saved each year [1].

And as one of DG enablement implications, an Australian Government's program named Solar Cities is being implemented in seven separate areas around Australia. Moreover, other trials of customer applications are underway, for instance, Time of Use (TOU) and Critical Peak Pricing (CPP).

In early 2009, the Australian Government announced $100 million fund to develop, in partnership with energy sector, Australia's first commercial-scale Smart Grid Smart City demonstration project and the consortium led by Ausgrid won the bid. Meanwhile, a number of smart grid pilot projects have been deployed around the world, such as America's Smart Grid City in Boulder, Intelligent Energy System in Singapore and Isernia Project in Italy.

3.2 Smart Grid Smart City Program

Commenced in mid-2010, the three-year Smart Grid Smart City project is expected to improve energy efficiency and better integrate renewable energy, using advanced information and communication technology. The main demonstration site is in the city of Newcastle and other smaller parts of the trial are conducted in the Sydney CBD, Ku-ring-gai, Homebush and Scone.

The Smart Grid, Smart City project will lead to Australia-wide advances in energy management