Universal smart meter rules put on fast-track in race to harness consumer resources

The push for universal smart meter uptake by 2030 is being fast-tracked by the Australian Energy Market Commission, with a draft determination on how to make this happen now expected to be published within weeks by the market rule maker.

In a “notice for initiation” issued on Wednesday, the AEMC said it had decided to use the fast-track process following a September 2024 rule change request from SA Power Networks, Intellihub and Alinta to speed up smart meter deployment.

The move to hurry things along follows the August 2024 release of the final report on the AEMC’s review of the Regulatory Framework for Metering Services, in which it recommended a program to install smart meters at all homes and small businesses in the National Electricity Market (NEM) by 2030.

The AEMC concluded that the NEM-wide rollout of smart meters will be crucial to bed down the “digital foundation” of Australia’s modern renewable grid – and the sooner the better as households turn to solar, home batteries and all-electric appliances and transport.

But speeding things up can take a long time in the world of energy market reform.

The AEMC first made the call for a 2030 target for universal uptake in November of 2022, following publication of the first draft of its lengthy and long-running review.

Almost a year later, after consultation with industry and stakeholders and feedback from the public, it pledged to work with energy advocacy bodies on next steps in the rule change process to make it happen.

A month later, the AEMC received the rule change request that is required for it to proceed from the South Australia transmission company SA Power Networks, smart meter outfit Intellihub and utility, Alinta.

“The AEMC has decided to use the fast-track rule change process,” the rule maker said on Thursday, noting that the request from the three companies was consistent with the recommendations from its own review, and that  “extensive consultation with the public” had already been undertaken.

“Stakeholders will have a further opportunity to provide feedback on the proposed rule change once our draft rule determination is published, expected in early April,” the AEMC said.

Smarter faster

Smart meters, typically installed by consumers as a requirement for installing rooftop solar, provide real-time data on a household’s electricity usage, but are increasingly valuable as a digital two-way communication line between households and the grid.

Australia has relatively low uptake of smart meters at around 30%, despite reforms in 2017 by the AEMC to try and increase numbers.

The only state to buck this trend is Victoria, where the government implemented a blanket rollout in 2006. But the rollout was poorly executed, and did not encourage access to the data, leading to consumers missing out on the benefits. The experience in Victoria was also a bit of a failure on costs.

As One Step Off The Grid reported, the AEMC’s review found that a rapid, well coordinated rollout of smart meters could provide net benefits to the value of $507 million for all of the regions of the NEM.

This money would come from savings through reduced costs for meter reading, reduced installation costs due to the scale of the rollout, and through simplified grid maintenance and fault and load management.

For consumers, benefits might include better access to the latest innovations in energy efficiency, energy management, eMobility, demand-side flexibility services, and solar and battery optimisation.

“Smart meters can collect more granular data about the condition and capacity of the lower voltage network, which can be used to maximise CER hosting capacity and minimise the need for future network upgrades,” the report said.

“A high take-up of smart meters will enable innovation in energy markets and in converging sectors such as electric vehicles (EVs).”

Getting there

While the AEMC’s draft rule determination is still to come, in its final report on the review the AEMC proposed to require distribution network service providers (DNSPs) to develop an annual schedule to retire legacy accumulation and manually read meters.

The plan would need to be developed by DNSPs in consultation with key stakeholders following set requirements, and be checked over by the market regulator, the AER.

Retailers would then be responsible for installing smart meters at these sites over the five-year acceleration period. Retailers would also need to report their annual performance on meter replacements.