Presentations at ENA’s meetings held on 18 November 2009

Last week, ENA played host to our members at a number of meetings and functions here in Canberra over two days. On Wednesday 18 November, the Regulatory Affairs Committee (RAC), Asset Management Committee (AMC), Smart Networks Committee (SNC), and Joint Committee met for their final meetings for this year.

At the RAC meeting, committee members discussed the importance of preparing itself to respond to the ongoing work of the National Energy Customer Framework (NECF). The Second Exposure Draft of the NECF is due out soon and the RAC considered it important for industry to examine its development in the context of current jurisdictional and national regulatory arrangements. The RAC also considered the importance of prioritising and monitoring different projects to ensure that enough resources could be utilised to respond to the large number of work streams facing the regulated energy infrastructure sector.

At the AMC meeting, committee members agreed to pursue further work on a major project to investigate the impacts and benefits of embedded generation on electricity networks. AMC members also discussed the new Standards Australia business model and how ENA would participate in the review and development of standards in the future.

At the SNC meeting, members focused on a presentation delivered by Ezra Beeman (Energia) on developing a smart networks roadmap. This roadmap is designed to provide energy network businesses with a greater understanding of the development of smart networks both domestically and internationally, and to assist in guiding the industry through this complex transition to a smarter energy network.

Members of RAC, AMC and SNC joined for the annual Joint Committee Meeting. The Chairs of each committee provided an overview of the key focus areas and activities of each committee, as well as outlining the work program moving forward into 2010.

The following presentations were produced at the ENA joint committee meetings last Wednesay 18 November 2009:

• Cameron O’Reilly, Energy Retailers Association of Australia  [473kB]
• Chris Spangaro, AEMC, Review of Energy Market Frameworks in light of Climate Change Policies [132kB]
• Mark Lendich Overseas tour 2009 [1.7MB].

* If you would like a higher resolution copy of these presentations please email us.

Submission to Smart Meter Customer Protection and Safety Review

On 29 September 2009, ENA lodged a submission to the Ministerial Council on Energy—Standing Committee of Officials (MCE-SCO) in response to its Smart Meter Customer Protection and Safety Review—Draft Policy Paper One. While supportive of the review, ENA does have some concerns with a number of the policy positions that MCE-SCO has proposed, including:

• Smart metering infrastructure (SMI) provides a range of new pricing options, potential products and services. The submission expressed the importance for the developing National Energy Customer Framework (NECF) to create effective commercial arrangements between networks and customers to foster positive developments relating to smart meters.
• Energy distribution businesses may be subject to the National Energy Marketing Rules under the NECF because of the potential for distributors to directly market initiatives for controlling the customer’s usage of energy. Industry noted that these initiatives already operate, without requiring governance by marketing rules. Therefore it is premature to enhance regulation until the details of how these initiatives will operate in a smart metering context become clear. ENA suggested that these issues should be considered by the National Stakeholder Steering Committee (NSSC), which is the national committee in charge of evaluating prospective aspects of the National Smart Metering Program and providing advice to the MCE.
• When metering data is lost, retailers use an estimate to bill customers for the period that corresponds to the lost data, based on historical data. Given the capability of smart meters to influence customer behaviour, industry considers that it would be inappropriate to use historic estimates during times of extreme price volatility. ENA therefore submitted that the use of a different estimation algorithm during critical peak pricing events would not be appropriate and the estimation algorithm must be consistent at all times.
• Customers will need to be able to verify that their smart meter is working properly and reconcile their bills against the meter. At this stage, it is not clear how these arrangements will work in practice. Industry considers that the NSSC process is the appropriate forum for developing the operational aspects of this regime. Once these aspects are better understood, industry will be in a more informed position to offer robust consultation.

Smart Meter Customer Protection and Safety Review—Draft Policy Paper One [66 kB]

Smart networks position paper

Smart networks position paper is a high level document aimed at generating discussion on the development and implementation of smart networks (smart grids). It canvases a range of issues all of which are thought provoking and designed to enable the discussion to commence.

The electricity industry is poised to make the transformation from a centralised, producer-controlled network to one that is less centralised and more consumer-interactive. The move to a smarter network promises to change the industry’s business model and its relationship with all stakeholders, involving and affecting utilities, regulators, energy service providers, technology and automation vendors and all consumers of electric power.

Smart networks position paper

Electric vehicles statement

On Tuesday 7 September 2009, Andrew Blyth, CEO of ENA released the ENA Electric Vehicles Statement.

ENA recognises:

• the future introduction of electric vehicles
• that electric vehicles facilitate smart networks
• that the initiative must be managed carefully, and
• it is essential for stakeholders to work together.

ENA Electric Vehicles Statement

National smart meter policy submission

On 21 August, ENA made a submission to the National Stakeholder Steering Committee (NSSC) on its Smart Metering Infrastructure Policy Issues Consultation Paper. The main issues raised in the submission were:

1. that the issue of distribution network security should be the priority consideration in determining the most appropriate policy outcomes
2. a vertically integrated smart metering infrastructure (SMI) supply chain will deliver the greatest benefits over the medium to long term
3. the benefits of allowing metering contestability for small retail customers following a mandated rollout are theoretical and have not been achieved globally anywhere
4. it is not currently technologically feasible to implement competition for each functional element of the SMI supply chain
5. the costs of allowing metering contestability include lost economies of scale, higher network security costs, greater risk of cyber crime and some distribution network reliability concerns, and
6. ENA considers it would be prudent to provide exclusivity for SMI to distributors until such time as competition for elements of the SMI supply chain can be demonstrated to be effectively contestable.

For these reasons, the submission recommended that the NSSC should adopt the following policy principles for SMI to small customers, namely:

1. distributors should be responsible for all functional elements of a fully vertically integrated SMI supply chain for small customers, including after a mandated rollout
2. the SMI network should be treated as part of a distributor’s network assets for the purposes of price regulation
3. a discretionary rollout to small customers should not be possible in a geographic area subject to a mandated rollout
4. following a discretionary rollout of SMI, distributors should retain control of elements related to distribution network system reliability and security, and
5. where an entity other than a distributor undertakes a discretionary rollout of SMI to small customers, there should be appropriate regulatory arrangements for access to the SMI network by distributors and rival retailers.

ENA will also provide the NSSC with further concrete technical examples of the issues identified above.

Smart Metering Infrastructure Policy Issues Consultation Paper

ENA lodges submission to National Electricity Law amendments for smart meters—6 August 2009

This week, ENA lodged a submission to the Ministerial Council on Energy (MCE) proposed legislative amendments to the National Electricity Law (NEL) to facilitate national trials and roll outs of smart meters.

ENA appreciated that the MCE had accommodated a number of industry’s suggestions from previous consultation. However, industry had a number of concerns with the current draft proposal. Broadly, these concerns were:

• the need to enact legislation for the roll out of smart meters was premature and without full consideration of all the issues arising from the underlying regulatory framework, which had not been developed, risked compromising the greater reforms
• businesses expressed concerns that cost recovery mechanisms were uncertain and required further development, however, delaying the legislative amendments to accommodate smart meter trials could delay businesses’ ability to recover their costs when participating in these trials in the short term
• businesses expressed concern that the proposal to publically release commercially sensitive and confidential information could be harmful, and the steps proposed to mitigate this harm were unclear and seemed undeveloped, and
• there seemed to be potential difficulties for distribution businesses to contract with retailers to facilitate smart meter trials.

The MCE plans to introduce the legislative amendments in the September sitting of the South Australian Parliament. ENA’s submission suggested that the legislative amendments governing trials will be appropriate to introduce in this parliamentary session, but the legislative amendments for smart meter roll outs should not be introduced until all outstanding issues, including drafting the accompanying regulatory framework, are resolved.

Contact: Tim Kane

Smart Grid, Smart City Consultation Workshops

ENA recently attended a workshop for industry stakeholders, held by the Department of the Environment, Water, Heritage and the Arts, to inform the pre-deployment study of the National Energy Efficiency Initiative (NEEI): Smart Grid, Smart City. It is expected that the pre-deployment study for the NEEI will be completed by the end of August.

The Smart Grid, Smart City initiative will be delivered through the Department of the Environment, Water, Heritage and the Arts (DEWHA), in conjunction with the Department of Resources, Energy and Tourism, the Department of the Prime Minister and Cabinet, and the Department of Broadband, Communications and the Digital Economy.

The NEEI Smart Grid, Smart City initiative aims to demonstrate the potential of smart grids to:

• build a more economically and environmentally efficient national grid;
• provide customers with improved energy use information, automation, and savings;
• provide environmental and economic benefits by helping to reduce energy use during peak demand periods;
• facilitate the connection of additional renewable and distributed energy generation and hybrid vehicles to the grid;
• improve network reliability; and
• provide information about the business case and return-on-investment for investment in this type of infrastructure.

Workshops were structured around a series of sessions designed to gather the views of industry and community representatives across four broad themes:

1. Objectives for the Smart Grid, Smart City (SGSC) demonstration
2. Potential benefits of the SGSC
3. Program design
4. Potential barriers to overcome for broader Smart Grid roll-out in Australia

Plenary and breakout sessions were held throughout each workshop, and participants were split into groups to facilitate discussion within similar industry categories (like with like), and then across industry categories (to encourage broad discussion and networking). Facilitators from McKinsey & Company and the Department were on hand to encourage discussion, ensure all voices were heard, and record the key issues discussed.

Any persons interested in obtaining a summary of the Smart Grid, Smart City Initiative workshops or a copy of the workshop presentation slides are welcome to contact Simon Bourke of ENA via email sbourke@ena.asn.au.

Contact: Simon Bourke

Telecommunications Legislation Amendment (National Broadband Network Measures No 1) Bill 2009 – ENA Submission

The Australian Government recently introduced into the Senate the Telecommunications Legislation Amendment (National Broadband Network Measures No 1) Bill 2009.

The Senate has referred the Telecommunications Legislation Amendment (National Broadband Network Measures No 1) Bill 2009 to the Senate Standing Committee on Environment, Communications and the Arts for inquiry and report by 17 August 2009. The inquiry will consider the scope of requirements, powers conferred and whether confidentiality provisions are adequate to ensure privacy protections.

Due to the fact that Australia’s energy network businesses are major stakeholders in the National Broadband Network initiative, this Bill is of direct relevance to energy networks as it extends a range of new information collection powers to utilities, to support the Implementation Study and rollout of the NBN.

The rationale for this extension of information gathering powers is that the NBN Implementation Study will require detailed information on utility ducts, poles and other facilities to enable it to study the best way for the NBN to be rolled out. The Bill will also provide a capacity for the government-owned NBN Company to require information over the next decade to assist it in carrying out the rollout.

ENA consulted with its members and lodged a submission to the Senate Inquiry on 16 July 2009. The main issues for ENA members were the timeframes allowed for energy network businesses to provide information to Government, the costs of providing this information and the security measures surrounding the disclosure of commercially sensitive information.

The ENA submission has been approved for publication by the Senate Standing Committee on its website.

Contact: Simon Bourke

Leadership & Influence: Opportunities & Challenges

ENA’s work and advocacy program continues to focus on influencing and driving the national energy reform agenda. This includes the impact of regulation, the challenge and adoption of new energy technologies and the importance of securing Australia’s energy future in a lower carbon economy. Feedback suggests our opinion is respected and our views are sought on important industry issues. Read more

ENA driving SmartNetwork Policy development

With a requirement to think long-term and put in place an energy system that allows us to build the next generation of ‘smart’ network assets to serve our community effectively, ENA has established a new ENA Smart Networks Committee, to be chaired by ENA Board Member Terry Effeney, CEO ENERGEX. The ENA Board Subcommittee has been formed to provide advice to the ENA Board and ENA on policy relating to the development of a national smart network. Read more