Australian case study: Cost benefit analysis for a mandatory rollout – lessons learnt


Conference: Metering, Billing/CRM India
Location: Mumbai, India
Presenter: Paul Sell
Abstract: Presented by Paul Sell at Metering, Billing/CRM India

In 2007 and early 2008 consultants advising the Ministerial Council on Energy in Australia undertook a comprehensive analysis of the costs and benefits of a national rollout of smart meters.  Energy Market Consulting associates was engaged to undertake the cost analysis for this project.

The project examined the costs and benefits state-by-state and costs were analysed separately for urban, rural and remote consumers.  It examined a range of communications technologies and also examined individually a range of “smart” functionalities, including remote connect and disconnect, supply capacity control, dedicated controlled circuit, quality of supply detection and outage detection.

The findings of the project were that there is likely to be a positive national net benefit.  In some states, however, a worst cost / lowest benefit outcome would lead to a negative net benefit.  The benefits were found to be based to a significant extent on savings in accumulation meter replacements, on meter reading cost savings and on distributor efficiencies which in turn are based largely off the “smart” functionalities.

The presentation will outline the components of the costs, the sources of the benefits and the range of overall net benefits that were assessed.  It will show the extent to which costs were found to be a function of communications technology choice and the range of smart functionalities that were found to have a net benefit.  Finally the paper will comment on some implementation issues, including the challenges of bringing in smart metering under a cost-recovery model for price regulation.