Australia: Smart Grid, Smart City

Last Updated: 18 November 2009
Article by Mark Feetham

In May 2009 the Federal Government announced that it would provide up to A$100 million to develop a commercial scale smart grid demonstration project in partnership with the energy sector. The National Energy Efficiency Initiative: Smart Grid, Smart City demonstration project (Project) is designed to encourage the development of a smarter and more efficient grid network in Australia. The Federal Government has recently invited industry bids to deliver the Project.

What is a smart grid?

Smart grids are electricity power grids that integrate advanced technology such as smart meters, sensors, communications equipment, digital devices and analytic tools to enhance the energy efficiency and reliability of electricity grids. This is done by automating, monitoring and controlling the flow of energy from the point of generation to the plug.

What are the benefits of smart grids?

Practical outcomes of a smart grid can include enabling:

  • energy companies to accurately charge energy according to time of day or load factors using smart meters which measure power usage and report back to the network
  • energy companies to monitor the operation of networks on a real time basis
  • users to obtain real time information on energy usage and adjust their aggregate energy consumption or time shift consumption to take advantage of offpeak rates for both environmental and cost reasons
  • appliances to communicate with the energy network and automatically stop or reduce their power consumption during peak load periods (eg battery charging or high demand equipment such as clothes dryers)
  • a reduction in emissions and improved environmental outcomes by helping to reduce energy consumption
  • energy companies to defer expensive new generator investments by helping to reduce loads at peak times
  • energy companies to accurately detect where energy transmission systems have failed and also where and when they have been restored resulting in faster restoration of power outages
  • energy companies to monitor and respond to energy that is being fed back into the grid by small distributed systems (eg solar panels and wind turbines), and make quick adjustments at generation locations and switching points to compensate for changes (eg changes in cloud levels or wind levels during a day).

What is the Smart Grid, Smart City project?

The recently announced Project is a demonstration project that will result in the deployment of a live, fully integrated smart grid network on a commercial scale in a single distribution area involving up to 9,500 homes.

The Project will employ advanced information technology and telecommunications technology such as smart meters, sensors and digital devices to create a more efficient "smart grid" network. It will also gather important information and data about the potential benefits of smart grid appliances, network improvements and technological efficiencies as well as the effects of smart meters on consumer behaviour.

It is anticipated that this data will be made publicly available in order to facilitate broader industry investment in smart grids across the country.

The Project will explore the capacity of smart grids to integrate renewable energy sources into the network and the integration of smart grids with other infrastructure such as gas, water and communication technology, including possible interaction with the National Broadband Network (NBN). The project will also investigate other network improvements that can increase the reliability of supply and enable distributed storage of electricity.

The objective of the project is that it will illustrate the societal, environmental and economic benefits of smart meters and smart grids and identify potential barriers to broader industry adoption. The project should therefore reduce the risk and uncertainty for investors in smart grids by demonstrating how technology can improve network reliability, deliver environmental and economic efficiencies and drive customer behaviour.

Smart Grid, Smart City – Key Dates



28 January 2010

Closing date for consortia to submit applications

April 2010

Successful consortium to be announced

July 2010

Commencement of Project

June 2013

Project completes

What needs to change to facilitate Smart Grids?

One of the objectives of the Project is to shine some light on exactly this issue however, the answer is likely to lie in a combination of measures which include:

  • regulatory changes to facilitate investments in smart grids, particularly in relation to energy price regulation taking into account expenditures required to establish smart grids
  • investment incentives
  • facilitation of the essential radio communications links required by smart grids by making available appropriate radio communications spectrum
  • regulatory measures designed to ensure the proposed NBN investment can be leveraged to assist in the establishment of smart grids
  • policies designed to encourage trans sectoral cooperation (such as development of standards and certifications) to foster cooperation between traditional energy generators, renewable energy suppliers, distributors, telecommunications and IT companies and the manufacturers of domestic and commercial equipment and appliances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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