It’s time to get smart

Paul Budde, Smart Grid Australia chief executive officer
Paul Budde, Smart Grid Australia chief executive officer

Article by Australian Smart Communities Association executive director Paul Budde

Now is the time to review smart meter/smart grid strategies.

A slow but steady development is taking place in the smart grid arena. The story starts in 2006/2007 when the Coalition of Australian Governments on Energy (COAG) launched a smart meter project on the back of serious electricity outages in Victoria and South Australia.

Despite lobbying from the broader ICT industry, COAG decided to simply concentrate on smart meters that would be able to intervene in people’s electricity use in the case of high electricity demand. This was done in order to prevent blackouts.

The ICT industry argued a smart meter is only one element, and that a smart grid is needed for smart meters to be truly effective. While COAG accepted the industry submission the end result of this was that in the final document the words ‘smart grid’ appeared only once, in an insignificant section of the document.

The project was launched in Victoria with the aim of providing the blueprint for the national rollout. Unfortunately the project turned into a nightmare. There was a total lack of communication with the customers, who were slammed with an extra charge at a time when energy prices already increased by 10-20 per cent per year.

Fortunately the energy companies involved did understand the need for smart grid and significant extra investments were made along those lines. However, this in turn led to a budget blowout and resulted in a deepening of the political disaster. The storm has since died down – the energy companies now have a much smarter network and customer opposition has largely gone – but all those involved are still licking their wounds and the national rollout is no longer talked about. Energy companies elsewhere in the country didn’t dare to embark on a similar program, resulting in widespread inertia throughout the industry.

The key to smart grids is ICT – ‘smart’ has nothing to do with electrons. By adding telecommunication to the network data can be gathered and with the latest technologies in cloud computing, big data and data analytics a more efficient and effective electricity system can be operated.

However, if you talk ICT you start talking about standards, interoperability and in general open systems. Co-operation between telcos and utilities has always been difficult, utilities traditionally work within their proprietary systems, which vary from one company to the other and telcos were never co-operative in providing affordable wholesale services to the utilities. As a result most of the smart meter projects around the world are based on proprietary systems. Sometimes different proprietary technologies are even used within one utility.

The utilities believed these smart meter systems would be more than enough for their purposes, since they envisaged that all that was needed was the occasional connection to the meter to see what was happening in the home. Despite the knowledge that was available when these meter networks were installed they believed there was no need for anything more than that. Very clearly they were thinking ‘not-so’ smart meters, and certainly not smart grids.

A decade and many billions of dollars later, energy companies are starting to understand more is needed than a meter that reads the usage at five or 30 minutes intervals. Throughout the least decade other smart grid technologies have been implemented throughout their infrastructure and significant investments have been made in the IT infrastructure. At the same time they have learned the difficult lesson that the customer should not be ignored.

So now we are finally seeing a real interest in the broader concept of a smart grid environment. Energy companies have a much better understanding of what ICT can do to their operations and some of the leading utilities around the globe are even venturing into developing new business models built around their new ICT capabilities – and are venturing into smart building, smart city, smart community and smart campus offerings, often also integrating other elements such as water and waste management, street lighting for councils, zero-net communities and transport (EVs). They are already generating new revenues from building, managing, organising and facilitating these new developments, even going so far as to offer the end-users ‘free energy’.

Of course, in this newly emerging smart grid environment the old way of thinking about the proprietary low-data telecoms systems is on the way out. Most energy companies are facing the reality that for several reasons – such as spectrum restrictions in relation to their proprietary networks, coverage issues and the lack of capacity – these networks will have to be replaced with a much higher quality telecoms network, and the modern 4G LTE and soon to arrive 5G networks are an obvious sign of where this is going.

For the transition, and perhaps even beyond the transition, the solution will include heterogeneous wireless network configurations in which RF-based mesh networks can also have a place. The utilities now understand having an always-on meter connection that allows them to better monitor and manage their network leads to significant cost savings and happier customers. These meters are becoming critical ‘sensors’ in their networks.

Companies are now looking at transitional processes – how to arrive at this new smart grid environment – helped by the fact the telcos have also learned their lesson and are now prepared to talk affordable wholesale products with the electricity companies. As well as more flexibility in the telecoms technologies there has to be unlocked SIMS and new M2M and IoT technologies and applications. There is still some way to go but it looks as though the combination of the new mobile networks, together with new advances in IoT/M2M (more competitively-priced products), now brings a successful transition to the new smart grid environment within reach.

Now is the time to take a new strategic look at where the future energy developments are going. We have a good idea of the disruptive elements that are shaking the industry on its foundation on the technology side. They include large-scale renewable plants, PV, EV, battery storage, microgrids, data analytics and cloud computing. On the strategic side they include the need for much more serious energy efficiency, CO2 regulations, smart cities, smart buildings and, through new telecoms devices such as smart phones, tablets and home management tools, much greater customer involvement in all of this.