Of all new demand management technologies, smart meters are a somewhat surprising candidate for one of the most talked about and controversial. Nevertheless, in Victoria, the smart meter rollout is now more than 98 per cent complete, with more than 2.6 million metering units installed, and consumers are beginning to have a greater understanding of the benefits they offer.
Victoria led the way on smart meters, with all five electricity network distributors rolling them out in accordance with state government legislation. Utilities around Australia have since begun their own rollouts, or are considering or trialling the new meters along with other network technologies.
Smart meters are also in use in much of NSW, and have been installed on the ACT power network since 2007.
Learning from the Victorian rollout, electricity providers have primarily decided not to complete a mandated rollout with compulsory time-of-use pricing, but to offer voluntary flexible pricing options.
The Victorian rollout
The Victorian smart meter program is a major infrastructure upgrade intended to replace old meters with newer technology with a wider range of capabilities. After meeting initial resistance, the program was reviewed in 2011 to rein in costs and a campaign was launched to make customers more aware of what smart meters were, how they worked and what benefits they offer.
The Victorian Government also launched the My Power Planner tool to make it easier for Victorians to make informed choices about power deals and the possible flexible pricing options available with smart meters.
A key benefit of smart meters is the extra information they give consumers about their power use. Through tools like web portals, in-home displays and smartphone apps, many Victorians are now able to access the half hourly readings of their smart meter, giving them a detailed and up-to-date picture of their power use.
This information can be used by customers to make significant savings by informing decisions and changing behaviour.
Smart meters have also enabled the introduction of new flexible pricing options, giving Victorians more choice when they are looking for power plans that can save them money.
Flexible pricing is now available as a voluntary option, with those who choose it being charged different rates for their power at peak, shoulder and off-peak times.
Victoria has one of the most competitive electricity markets in the world, which means there are significant savings on offer for consumers who are willing to shop around.
My Power Planner, which has been endorsed by consumer group Choice, allows people to create a personal profile of their power use and then use this to compare all the available offers out there in Victoria’s highly competitive market.
Customers can either upload data from their smart meter into the tool or answer a series of questions to create a personal profile of their power use.
There are more than 3,000 plans now loaded into My Power Planner, making it simpler and easier for Victorians to find the deals that will save them the most money.
One of the problems with the early stages of the smart meter program was that the benefits of the new meters had not been explained to the public.
The current Government has moved to address this with the launch of a significant public information campaign explaining how the electricity market works and how smart meters and new options like flexible pricing can help people save money.
This campaign has included the establishment of the Energy Information Fund, designed to make sure all Victorians get the facts they need to make good decisions about electricity.
Smart meters also have a role to play in dealing with one of the key challenges in the Victorian electricity space – peak demand.
Spikes in electricity demand at peak times in Victoria (such as on hot summer days when air conditioner use is greatest) can put pressure on the grid and require investment in expensive generation and network infrastructure that is only necessary for a very small part of the year.
With the voluntary introduction of flexible pricing, enabled by smart meters, we are seeing for the first time price signals to help shift demand outside of peak times.
Shifting demand out of the peak period will allow the deferral of expensive new investments in generation and network infrastructure which will help save money for both utilities and customers.
What do smart meters do?
The ENA describes smart meters as an enabling technology to support timely information to customers on their energy use and enhanced ability for networks and retailers to manage their energy market roles and responsibilities.
Smart meters measure and record (at 30 minute intervals) how much electricity a household or business is using. They can enable customers to make informed choices about how much energy they use by providing accurate real-time information about electricity consumption. They enable customers to have greater control over their energy use and cost.
Smart meters can also reduce some of the costs for energy companies which feeds into customer bills. They can communicate meter readings directly to electricity distributors or retailers, eliminating the need for someone to come out and read the meter – whether that is for each quarterly bill, to change electricity retailer or to reconnect power when moving house – and this provides better service to the customer.
Smart meters can also notify the electricity distributor where power is out in real-time, which can speed up power reconnection because the source of the problem can be pinpointed instantly. Smart meters also support consumer generation (eg by solar PV installations).