Smart Metering in the Australian Landscape (Strategic Focus)

Overview 1
Catalyst 1
Summary 1
Key Messages 2
Smart metering technology continues to be a hot topic in Australia 2
A range of smart metering projects are already underway in Australia 2
The overall architecture of AMI spans networks, hardware and software 2
A range of technology-related issues are emerging 2
A range of delivery and customer processes are enhanced by smart meters 2
The cultural change required for AMI rollouts should not be underestimated 3
The competitive landscape is continuing to shift as vendors jostle for opportunities 3
Table of Contents 4
Table of figures 5
Table of tables 5
Market Opportunity 6
The Australian utilities sector is growing under national regulation 6
The ecosystem is heavily regulated by AEMO and its components 6
NEMMCO manages NEM transactions 7
AEMO has assumed control of six key industry bodies 7
But that is not the end of regulatory bodies 8
The overall utilities sector is still showing signs of growth within Australia 8
Electricity prices are continuing to rise for Australian consumers 9
The Australian utility value chain is typically structured around states 10
New South Wales is the largest electricity sector in Australia 11
Regulation 11
Electricity networks 12
Retail sector 12
Privatization issues continue to feature in industry and government discussions 12
Victoria is heavily deregulated 13
Regulation 13
Electricity networks 13
Retail sector 13
Western Australia is independent of the NEM 14
Regulation 14
Electricity networks 15
Retail sector 15
Queensland is a highly energy intensive economy 15
Regulation 15
Electricity networks 16
Retail sector 16
South Australia has just one distributor 16
Regulation 16
Electricity networks 16
Retail sector 17
Tasmania maintains a single distributor and retailer model 17
Regulation 17
Electricity network 18
Retail sector 18
The Northern Territory is dominated by Power and Water Corp 18
The Australian Capital Territory relies primarily upon ActewAGL 18
Smart metering technology continues to be a hot topic in Australia 18
The basic structure of smart metering implementations is network-centric 19
Deployment will depend on each distributor 20
A range of benefits are driving smart metering investments 20
Greater information around energy usage will benefit consumers 21
Distributors stand to gain from smart metering projects 23
Smart meters offer a range of initiatives for retailers in an increasingly competitive market 24
Smart meters and smart grids are often confused 25
Smart meters are part of a natural evolution for electricity networks 26
A range of smart metering projects are already underway in Australia 26
National guidance is being driven by the Council Of Australian Governments 27
Functional requirements are still being determined 27
Regulations are being put in place but questions remain 29
Utilities have been looking at smart metering for some time 29
Current projects in Victoria 30
CitiPower and Powercor 30
Jemena and United Energy Distribution 30
SP Ausnet 31
Current projects in New South Wales 31
EnergyAustralia 31
Country Energy 31
Integral Energy 32
Current projects in Queensland 32
Energex/Ergon Energy 32
Current projects in South Australia - ETSA Utilities 32
Current projects in Western Australia 33
Western Power 33
Current projects in Northern Territory - Power and Water Corp 33
Technology Evolution 34
The overall architecture of AMI spans networks, hardware and software 34
Conceptual data flows highlight the key requirements of smart meter implementations 34
The full architecture can be complex 35
Network technology offers a range of options to utilities 36
Meter data management is essential to handle the volumes of data coming from smart meters 37
Integration with core systems will be needed to extract benefits for utilities 37
Providing users with relevant information will be a challenge for businesses 38
Security needs to be considered throughout AMI implementations 38
Dashboards and decision support provide executives and decision makers with insight 38
AMI projects will rely upon middleware and datacenters 38
The resulting opportunity for vendors is significant 39
The in-home meter is the most desired method of interaction for consumers 39
A range of technology-related issues are emerging 40
Payment for AMI projects will be shared by value chain partners 41
Distributors should be responsible for holding meter data 41
Cloud computing is not expected to have a significant role in the smart meter market 42
The National Broadband Network may deliver future benefits but its impact now is low 43
Customer Impact: Smart Enablement 44
A range of delivery and customer processes are enhanced by smart meters 44
Meter accuracy has been an issue for utilities for some time now 45
Peak demand can be better managed to reduce overall costs for utility companies 47
The cultural change required for AMI rollouts should not be underestimated 49
AMI will affect almost all employees within a utility company 49
Infrastructure networks are being opened for the first time 50
Smart meter assets will need to be treated differently 50
Business processes are going to need refinement 51
Those consumers already using smart meters are finding benefit 53
Competitive Landscape 55
Services-centric vendors 55
Accenture 55
Bilfinger Berger Services Australasia (BBSAA) 55
CSC 56
HP 57
IBM 57
Logica 58
UXC 59
Software-centric vendors 59
eMeter 59
Itron 60
Oracle 60
SAP 61
Communications and network-centric vendors 61
Alcatel Lucent 61
Cisco 62
Silver Spring Networks (SSN) 62
Go to Market 63
Action points for enterprises 63
Action points for technology vendors 64
APPENDIX 66
Definitions 66
Methodology 67
Datamonitor MCI Index methodology 67
Further reading 74
Ask the analyst 74
Datamonitor consulting 74
Disclaimer 74
List of Tables
Table 1: Regulated electricity price increases by state 2007-10 10
Table 2: Organizational definitions 66
Table 3: Technology definitions 67
List of Figures
Figure 1: Australian National Electricity Market 6
Figure 2: Australian utility market size 2007-12 ($m) 8
Figure 3: Distribution of Australian utility market size, 2007 9
Figure 4: Quarterly index of Australian electricity prices 10
Figure 5: Australian state electricity competitiveness 11
Figure 6: Basic smart metering technology structure 19
Figure 7: Australian respondents that have actively tried to reduce energy consumption in last 12 months 21
Figure 8: Consumer attempts to reduce energy usage 22
Figure 9: Peak usage is an issue for utilities 24
Figure 10: Smart grids have broader functionality than AMI alone 26
Figure 11: Australian National Smart Metering Program structure 27
Figure 12: Conceptual data flows for smart metering implementations 35
Figure 13: Smart metering technology architecture 36
Figure 14: Functional areas of opportunities for technology vendors in AMI projects 39
Figure 15: Preferences for consumer interaction with smart meter information 40
Figure 16: Cloud computing as a service delivery option 42
Figure 17: Business process impacts created by AMI implementations 44
Figure 18: Meter reading accuracy is increased 46
Figure 19: Improvements created by more frequent meter reads 47
Figure 20: Peak energy comes at a greater cost 48
Figure 21: Time of use tariffs can reduce peak demand 49
Figure 22: NSMP BPPWG approach to AMI-driven process change within utilities 52
Figure 23: An example process flow drafted by NSMP BPPWG 53
Figure 24: Consumers are changing their habits thanks to smart meters 54
Figure 25: MCI assessment scale 68
Figure 26: MCI Assessment Framework 68
Figure 27: MCI Scales 69
Figure 28: Scale for MCI Assessment, Effectiveness of Regulator 69
Figure 29: Scale for MCI Assessment, Ease of Third Party Access 70
Figure 30: Scale for MCI Assessment, Pricing Regime 70
Figure 31: Scale for MCI Assessment, Wholesale Fragmentation 71
Figure 32: Retail Fragmentation 71
Figure 33: Scale for MCI Assessment, Traded Market Maturity 72
Figure 34: Scale for MCI Assessment, Access to Market Information 72
Figure 35: Scale for MCI Assessment, Consumer Representation 73
Figure 36: Scale for MCI Assessment, Propensity to Switch 73