I’m fond of including in talks I give a quote, somewhat amended, from T.S.Eliot: “Between the idea and the reality falls the shadow.”
It encapsulates, I think, the situation on smart metering in this country.
The debate and the literature is full of the prospects in the sunlit uplands of networks where customers are empowered and engaged while suppliers have a new grip on demand that starts to address costly investments.
However, only Victoria has embraced the roll-out of smart meters. Other States, as I reported in a post on this site earlier this week (see “Moonshine and meters”), are shying away from commitment any time soon.
The Victorian experience is not been an especially happy one. Someone highly respected in energy watchdog roles described it to me this week as “a debacle.” It had set back customer acceptance years.
The Baillieu government, of course, inherited the smart meters controversies – there are a number – from Steve Bracks and John Brumby.
Doing something to both sort out the Victorian hassles and to demonstrate more widely the benefits of going down this path is a job for both government and the supply industry.
Last month the State’s director of energy safety, Paul Fearon, issued a draft report in to consumer and media claims that meters in Victoria had exploded or caused fires. This was not supported by the evidence, Fearon said. “I have no hesitation in assuring Victorians that smart meters are safe.”
(More than 1.1 million meters have been installed in Victoria so far. The projected cost of the program exceeds $2 billion, rather more than the $800 million claimed by the Bracks government when it was launched.)
The other side of this coin is the community pushback against paying for something from which they are not receiving a benefit – because the costs are already appearing on their bills – and it here that the investor-owned distribution businesses in Victoria are starting to step up to the plate.
One of them, Jemena, which has so far installed 107,000 smart meters in its north-west Melbourne franchise area and is due to complete delivery of the technology to 315,000 households by the end of next year, is announcing today that it has launched a way for customers to save money by accessing information about their electricity consumption.
The company’s “Electricity Outlook” web portal will enable customers where the meters are installed to access daily data via computer, tablet or smart phone to find how much power they are using and when they are using it.
The set-up will enable them to compare their usage with past consumption as well as average demand in their neighbourhood.
They can set themselves consumption targets and measure how they are going – and they can shop around for the best retail offer that matches their usage behaviour.
The Moreland Energy Foundation, a local consumer ginger group, says the development is “an exciting step in demystifying electricity use.”
The critical element, I think, is that this, and other efforts like it being pursued by other Victorian suppliers and trialled elsewhere on the east coast, can start to demonstrate a clear value for the customer from the technology.
It begins to take us down a path, as described last month by CSIRO’s Energy Transformed Flagship in Newcastle, towards where customers won’t be asked to change their lifestyle but will have automated devices to help them manage their power consumption.
Victoria’s Department of Primary Industries provided a useful line, too, in a commentary on its website: “With growing energy demand and rising prices, there is a need to give electricity customers greater control over their consumption.”
Jemena technology manager Michael MacFarlane also puts his finger on a key point: “Everyone will learn something when they see their consumption for the first time (on the self-service web portal). Even if it is only setting a target and working out how to achieve it, this technology will change the way people think about electricity.”
He adds: “Turning off the lights when you are not in a room, understanding how much that beer fridge in the garage is costing you, discovering what appliances are still running in the middle of the night when they could be switched off or put on standby – everyone will have the opportunity to learn something.”
This sort of stuff adds up in money terms. I saw a report in the Australian Financial Review earlier this year quoting AGL Energy arguing that combining smart meters with time-of-use pricing could save customers up to $33 per megawatt hour.
Your average NSW home, for example, uses about 7 MWh a year. Consumption is a bit lower in Victoria because so many homes use Bass Strait gas, but there are more than a few south-east Queensland households, with multiple air-conditioning units and swimming pools, that consume 10 MWh a year.
Of course, we have to get to the stage where politicians pluck up enough courage to follow Victoria’s lead – and have learned from the roll-out mistakes there.
The Australian Energy Market Operator says the critical factor that will influence the success of smart meters in this country is the agreement of the jurisdictions to mandate the roll-out.
For this to happen, the community has to be persuaded that there is a net benefit to it, the cost recovery process has to be smart, too, and steps need to be taken to deal with payment problems for some customers.
AEMO is somewhat pessimistic.
It says “it is unlikely that the benefits of smart meters will be achieved in the medium term.”
However, it seems to me, that the game changes when consumers are starting to say “Why the heck are my friends or family elsewhere getting this benefit and it isn’t available to me – why is this roll-out taking so long?”
This is where Jemena’s “Electricity Outlook” program, and others like it now being started, takes on a national value – and, I think, there is a role for the federal energy portfolio to monitor the positive outcomes and trumpet them around the country while the Victorian government gets on with the job of re-assuring its voters that, despite the hassles to date, this game is worthwhile.
That’s potentially a good way out of today’s electricity shadowlands.