With the Australian Energy Market Commission (AEMC) pushing for changes to demand side participation, few doubt the impact Power of Choice will have on national energy markets.
Energy Source and Distribution talks to Andrew Thomas, Australasian executive director of EDMI, about Power of Choice and how EDMI’s partners are coming to grips with the new paradigm.
Power of choice identified opportunities for consumers to make more informed choices about the way they use electricity. What does this mean for EDMI?
It means a paradigm shift for distribution companies. Sure, there is a loss of control, but it is also an opportunity for distributors to focus on delivering their core business of electricity network services. There are big upsides for companies that adapt to the change quickly.
How does Power of Choice recommend distributors change the way they manage networks?
Rising costs, population growth and solar deployment are putting significant pressure on the distribution companies as costs continue to increase. Power of Choice will mean distribution companies can focus on what efficiencies can be achieved through the functionality or services that are delivered by smart meters installed by Power of Choice, rather than be stuck in a massive roll-out project.
Traditionally, distribution companies have seen smart meters as a critical component of a functional smart grid. If they don’t own the meters, how can distributors leverage smart capabilities?
The efficiencies I just mentioned are derived from the smart grid. One of the challenges for distribution companies is changing the common perception that retailers can be the only customer in a “power of choice” roll-out.
In reality, we know a lot of the benefits of smart metering will revolve around reducing the cost for distribution networks. Distributors want to understand what functionality and service stack will drive cost reduction efficiencies. A good place to start is looking at the basic data sets that are needed and when this data is needed. At EDMI, we have developed meters with specific measurement engines to deliver the right data for distribution networks and combined it with communications networks that can deliver this data to the right places at the right time.
How important is communication when looking at smart, future networks?
We need to look at a comprehensive solution; an answer that includes meters (and other devices), communications and some software. The real trick is to deploy smart meters in a way that the deployment can evolve to a smart grid implementation. It starts with the right communications. Smart meters should be deployed with communications that might initially only allow a client/server concept, but later allow peer-to-peer communication. The best and most standard way to do this is to deploy communications supporting the Internet Protocol suite. Of course you also need the right security.
Do devices need the capacity to evolve in time?
Certainly, the devices you deploy need to be smart enough, with headroom to allow evolution. As I mentioned before, the devices might be deployed initially to just talk back to a server, while the communications network is limited. More advanced smart grid functions have not been commercialised.
However, once the devices have access to more bandwidth and are connected to ubiquitous IP networks, the distributed intelligence-type functionality of a smart grid can be activated if the device has the processing power.
EDMI has always delivered products that can evolve in the typical 10-15 year life span. It is critical to ensuring a return on the investment. You also need a way to ensure the devices can talk to each other. EDMI is investing in the support of the Smart Energy Profile (SEP) 2.0 standard, an application layer standard that can operate over IP networks for smart grid services and functions.
Power of Choice represents a significant change to company asset profiles. This reduces costs, but it also reduces the revenue base. How can distributors best-manage this change?
There are a few ways to do this. As a deliverer of network technology, there is no reason a distribution business could not deploy communications networks that could be used in the Power of Choice smart meter roll-out.
Not only would this make sure distribution equipment and the smart meters were connected to the same network – to help the transition to the smart grid and, therefore, to the services needed by distribution companies – but also it could deliver another revenue stream for the distribution company.
Power of Choice is a new playing field for distribution companies. Our consultants have been doing a lot of work to understand the new world and how distribution companies can get the best from the new framework.