Australia: New directions proposed to optimise smart meter rollout

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The Australian Energy Market Commission (AEMC) has set out recommendations to accelerate the smart meter rollout to households and small businesses.

In a new ‘directions paper’, the Commission points to the slow rollout of smart meters over the past decade, which has resulted in their potential benefits remaining largely unrealised both for electricity users and the grid.

Moreover, consumer awareness remains low and research has indicated that it is likely that one-third of people who have a smart meter are unaware it exists, let alone getting any benefits from the data.

Smart meters were made mandatory in Victoria in 2011. However, the penetration in New South Wales, ACT, Queensland and South Australia is only around 25%, while Tasmania is slightly higher at 35%.

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“At a community level, smart meters are a crucial enabling tool for the reforms we all need to decarbonise the grid. They are a gateway to enabling a more dynamic and flexible market,” says AEMC Chair Anna Collyer.

“We need the aggregated data that sufficient numbers of smart meters could provide on usage and power quality before we can really rely fully on these resources to power the grid.”

The Commission considers that a penetration in excess of 50% is required to start realising the benefits.

At the current rate of installation, which is comprised mainly of customer requests usually when installing PV systems, meter replacements and new connections, a 50% penetration would take at least another four to five years and full deployment not occurring until after 2040.

The Commission says that changes to the regulatory framework are needed and four potential options are proposed for comment:

  • ● Removing inefficiencies in the installation processes by improving the customer experience and reducing delays in meter replacements among other actions
  • ● Requiring meters to be replaced once they have reached a certain age, e.g. 30 years
  • ● Setting rollout targets for retailers
  • ● Introducing a ‘backstop’ date by when all accumulation meters or manually read interval meters must be replaced.

Other options proposed to assist in aligning incentives include the development of additional revenue streams from smart meters, a spreading of the installation costs across the parties that benefit or making multiple parties responsible for metering. For example, the retailer is responsible for the provision of metering services but the network provider, which is a beneficiary, currently bears none of the costs.

The directions paper is open to comment, and a draft report is planned for later in the year with a final report to follow early in 2022.