In his audit Australia’s auditor-general has given the government supported Smart Grid, Smart City program an overwhelmingly positive review, saying it has made a significant contribution of data and information to support further development of smart grids in Australia, with many of the program’s trials having been successfully implemented, and overall, the administering departments established appropriate arrangements to support its implementation.

However, key components of the program – such as the retail trial – have presented additional challenges, and there is scope for improvement in several areas of the government’s administration of the program, including aspects of the grant assessment and selection process, probity arrangements, and the measurement and reporting of program performance.

Smart Grid, Smart City was awarded following a competition to a consortium led by then EnergyAustralia (now SP Ausgrid) in mid-2010, with almost Au$100 million (then US$81 million) in funding from government to create an energy network integrating a smart grid with smart meters in homes. The selected areas were Newcastle (NSW) and surrounding districts in the Hunter Valley, and some areas of Sydney.

The auditor-general states that projects that were completed largely in accordance with the funding agreement included:

  • Grid‐side applications that tested new technologies to assist distribution network service providers to better manage electricity supply
  • Energy resource management projects to test the potential impact of wide scale renewable energy generation on the existing electricity grid, and trial storage batteries and other technologies that can assist to manage peak electricity demand and integrate with energy generated from renewable sources
  • The EV trial that involved the operation of 20 vehicles over short and longer range journeys for an 18‐month period, and
  • The rollout of smart meters to customers’ homes and testing their interaction with feedback technologies providing information on real‐time electricity use.

However, among the elements of the program that have not progressed as originally envisaged, the investigation of compatibility between smart grids and other infrastructure was affected by technological limitations, and at the time of the report, information was not available to help determine whether public and corporate awareness of the economic and environmental benefits of smart grids had been enhanced by the program.

The retail trial, which cost $20 million and was to provide information about customer engagement with smart meter technologies, achieved participation rates that were lower than established targets and did not run for the envisaged two years’ duration. This was due to a range of technological issues and higher than expected customer resistance to the installation of smart meters. Nevertheless, the trial has identified the challenges that government and industry will need to consider if implementing a broader rollout of smart meters and their associated technologies.

The report states that the audit has also highlighted the challenges in maintaining administrative continuity for complex programs that are transferred across agencies. In these circumstances, sound record keeping and regular program reviews help to ensure the continuing appropriateness of governance and program administration arrangements.

The program was scheduled for completion in September 2013 but due to extension of the retail trial, it is now set for completion by the end of March 2014.

Review the audit report, Administration of the Smart Grid, Smart City Program HERE

By Jonathan Spencer Jones