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By Anna Collyer, Chair of the Australian Energy Market Commission

As the once-in-a-generation transformation of the power system continues, the way customers interact with energy in their homes is also changing. The Australian Energy Market Commission is now recommending electricity smart meters in 100 per cent of households by 2030 as a critical step to realising benefits for both.

The past few years have been big for energy. We have seen widespread commitments from the Australian government and jurisdictions to achieve net zero by 2050. Industry, governments and market bodies are, for the first time, united in our collective effort to achieve Australia’s ambitious target and every other week there seems to be a new advancement, or initiative, edging us toward our goal.

One of the greatest advancements for the transition is happening in homes across the country. Customers are increasingly investing in what we call consumer energy resources, or ‘CER’ – such as solar panels, battery storage and electric vehicles at a rapid rate.

The changing landscape

A high proportion of Australian residences already have solar PV, with around 3.19 million total solar rooftop PV systems installed for residential and small business customers in Australia, while more than 50,000 total registered small-scale battery systems have been installed in Australia in the past seven years. There will also be a surge in electric vehicles in Australia, with 92 to 99 per cent of all vehicles expected to be electric by 2050.

As it stands, small-scale rooftop solar systems together provide more than 17GW of capacity across the national electricity market – that’s more than four times the generation capacity of Snowy Hydro. All of this consumer-generated power presents both a great challenge and opportunity for eastern Australia’s electricity system. But, if we can – pardon the pun – better harness the power of all of this CER, we can fill reliability gaps in the future to improve operation of the overall system.

Smart technology

What has this got to do with smart meters you might ask? And how does this lead to benefits for customers? Smart meters present clear benefits for consumers and form a crucial link for the wider energy system, paving the way for significant advances necessary to reach net zero.

While smart meters are not new, our recent review has found that they will be a vital building block in helping us transition to a more efficient, lower-cost and decarbonised energy system sooner.

As an independent statutory body and the rule maker for the energy sector, the AEMC’s job is to work with stakeholders including market bodies, industry groups and consumer advocacy bodies to make sure the right frameworks are in place for an affordable and reliable energy future for customers.

Smart meters offer consumers more opportunities when it comes to how they directly use and pay for energy. A number of Australians are already using smart meters to cut bills, from those who have CER to customers without solar, batteries or an EV who may be using smart meters to access cheaper tariffs such as the ‘solar soaker’.

In the not-too-distant future, smart home energy management systems could also help customers manage their energy use throughout the day leading to cheaper bills overall.

By monitoring energy use digitally and with accuracy, smart meter technology also creates the opportunity for greater data sharing and visibility of consumer assets for the energy market. This, in turn, leads to better system planning and decision-making and fewer unnecessary costs being passed down to consumers.

Accelerating for tomorrow

To date, the approach for rolling out smart meters has been slow, and less efficient than it could be. Outside of Victoria, the average smart meter take-up level in each jurisdiction is at around 35 per cent.

Deployment of smart meters in the national electricity market has largely been driven by consumer requests to install solar PV systems and by new connections, such as when a home is built. Retailer-initiated smart meter programs have been few and far between.

Where smart meters have been installed, the scope of services offered to consumers has been narrow. And it means some consumers without CER are not seeing enough direct benefits to want to request a smart meter.

The AEMC’s comprehensive review into smart meters has found that speeding up the rollout of smart meters to 100 per cent of households by 2030 would provide net benefits to the value of $507 million for national electricity market regions New South Wales, Queensland, the ACT and South Australia.

In our final recommendations, cost savings would be made through a coordinated rollout led by energy networks developing a legacy meter retirement plan, with retailers overseeing upgrades to smart meters between 2025 and 2030.

The first step in this plan would be for retailers and networks to map out a year-to-year schedule of the deployment program – focusing on how to minimise installation costs and maximise the benefits for customers.

Information, protections and data

Ensuring a positive experience for customers is key. That’s why the AEMC is recommending better information and protections. Among these, would be requirements for retailers to provide clear notifications ahead of installations and any changes to billing arrangements.

In addition, we’re recommending an overarching communication strategy so that customers are better informed about rollout plans and how they can use a smart meter to directly save money on their power bill. Without low-cost, timely access to data, many of the benefits available from smart meters and other reforms will simply not be realised.

Data opens up new possibilities for innovation, where new technologies and services can be provided for consumers, at home, in their community, and perhaps, even in coordinating or orchestrating the use of CER in the system. Another of our recommendations is in ensuring access to data for customers and networks.

We are recommending a mandate on free customer access to real-time data about their own energy usage, so that they can maximise their savings from the touch of a device in their own homes. We’re also recommending networks have access to granular power-quality data.

This information can improve the operation and use of existing infrastructure to assist networks in lowering the cost of CER integration.

Yesterday’s electricity system relied on the 19th century technology of accumulation meters, but for the net zero emissions system we aspire to build for tomorrow, we need more advanced technological devices. We need smart meter devices in every home to bring our system into the 21st century.

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