Smart grid could save $28bn in power cost

A four-year trial of smart-grid technologies in NSW has found the potential for a net economic benefit of up to $28 billion over the next 20 years from the deployment of smart-grid technologies in Australia.

The analysis conducted by a consortium led by project design and engineering firm Arup was commissioned to examine the results of the Smart Grid, Smart City project. Backed by $100 million in federal government funding as part of its Energy Efficiency Initiative, Smart Grid, Smart City is one of the largest and most ambitious commercial-scale trial deployments of smart-grid infrastructure and applications ever undertaken in the world.

Centring on the use of information and communications to improve the efficiency of electricity generation, distribution and usage, the trials were led by Ausgrid with support from industry and government partners including IBM Australia, GE Energy Australia, Grid Net, the CSIRO, TransGrid and Energy Australia.

In its cost-benefit analysis, Arup and consortium partners Energeia, Frontier Economics and the Institute of Sustainable Futures (UTS) quantified the potential economic benefits from the mix of smart-grid devices, customer-feedback technologies and dynamic electricity tariffs trialled in the project and developed a business case for implementing the most effective of these at a national level.

They found the largest economic benefits came from technologies that improved the overall reliability of the network. Notably, fault detection isolation and restoration (FDIR) technologies which allowed for rapid detection and repair of network faults was found to have potential to deliver billions of dollars in benefits if used nationally.

The consortium also found the trial of in-home electronic and online tools for monitoring and adjusting electricity usage in near-real time, coupled with smart meters and alternate pricing models, gave households unprecedented control over when and how much electricity they consumed. This led to a smoothing of consumption over the daily cycle and reduced call on the grid at peak times.

The cost-benefit analysis was a rigorous examination of the Smart Grid, Smart City project that would feed into the ongoing reform of regulations governing electricity supply and distribution, said Dr Richard Sharp, Principal and Project Director, Arup.

“We estimate total net benefits across the grid in the order of $28 billion if the most promising smart-grid technologies were to be implemented nationally. That’s money that can be applied to other infrastructure and services, or shaved off bills for households or business,” Dr Sharp said.

“For example, at the household level, we can use technology to change electricity usage patterns so as to dampen demand at peak periods, reducing capacity requirements over the long term.

“Given the right mix of technologies, a smart grid is achievable. This means we get more out of our existing electricity infrastructure, and can stage investment in new infrastructure over longer periods,” he said.

Technologies and applications trialled included:

• Grid applications - grid-side monitoring and control technologies to reduce network operating costs and support the future planning and implementation of lower-cost networks;
• Customer applications - residential electricity consumption, reliability, customer behaviour and responses to feedback technologies and pricing models. This included an electric vehicle trial and investigations into the interoperability of electricity metering with gas and water metering;
• Distributed generation and distributed storage - distributed generation and distributed storage within electricity grids, at the level of small communities; and
• Supporting information and communication technology platforms - integration of various high-speed, reliable and secure data communications network and associated IT systems with the electricity distribution network, including interoperability with the National Broadband Network.

The findings have also underpinned development of a sophisticated set of interfacing models - believed to be the most advanced of their kind in the world - that will be made available to all industry participants to guide implementation of smart-grid technology.

“Industry participants now have at their disposal a suite of proven technologies to make electricity supply more efficient and less costly. The challenge now is for relevant jurisdictions and regulatory authorities to work together so that retailers and distributors and other participants have the flexibility to adapt and deploy these technologies where it is of benefit to consumers,” Dr Sharp said.