The Australian Energy Market Commission (AEMC) has put forward recommendations to drive 100% smart meter uptake in Australia by 2030, as part of a suite of reforms aiming to put customers at the heart of the transition to net zero.
The draft report outlines key recommendations for accelerating the rollout of smart meters and shows that a 100% uptake would deliver net benefits to the tune of AU$507 million ($318.5 million) for all National Electricity Market (NEM) regions, including New South Wales (NSW), the Australian Capital Territory (ACT), Queensland (QLD) and South Australia (SA).
Key recommendations in the draft report, the Review of the regulatory framework for metering services, include potential changes to energy rules to support a more coordinated programme of meter replacements in addition to ensuring appropriate safeguards for privacy.
Specifically, the 20 recommendations laid out by the AEMC include:
1. Set a target and mechanism
There is an economic opportunity to accelerate smart meter deployment for completion by 2030. This timeframe is likely to be the earliest time realistically achievable by industry while maintaining an affordable and reliable energy system.
2. Accelerate smart meter uptake to 100%
The Commission recommends the target of universal uptake of smart meters by 2030. This applies mainly to NSW, ACT, QLD and SA. Victoria has already achieved universal uptake of smart meters and Tasmania is well on its way.
3. Utilise legacy meter retirement plans as an acceleration mechanism
This includes adopting a legacy meter retirement approach under an industry-developed plan. The plan would be coordinated initially by DNSPs (Distribution Network Service Providers) to accelerate deployment and include regular milestones, like yearly targets. Retailers and metering parties would be required to complete the replacement within a set timeframe.
4. Do not change current industry structure
Retailers and metering parties should remain responsible for metering services for small customers.
5. Remove opt-out provisions
These include provisions for customers to opt-out of a retailer-led smart meter deployment under standard retail contracts.
6. Do not include an opt-out provision
Direct provisions allowing customers to opt-out of an accelerated deployment should not be added to a regulatory framework.
7. Reduce the number of retail notices
Retailers should only provide one notice for a retailer-led deployment. This would reduce administrative burden and costs and enable greater flexibility, planning and coordination – likely without customer impacts.
8. Remove testing and inspection requirements for legacy meters
Regular testing and inspection requirements should be exempted for the legacy meter fleet once the AER approves the legacy meter retirement plan.
9. Consider a process to encourage customers to remediate site defects and track sites that need remediation
The Commission proposes for customer to implement a notification and record-keeping process for customer site defects. Better-defined arrangements are needed, especially for the accelerated deployment of smart meters.
10. Consider arrangements to support vulnerable customers
Funding support should be considered for vulnerable customers who need to carry out site remediation. Vulnerable customers not having access to smart meters has efficiency and equity impacts.
11. Improve industry coordination and minimising negative customer impacts in shared fusing
The Commission recommends further developing and using a ‘one-in-all-in’ approach to meter replacements to improve efficiency and customer experience in scenarios where meters for customers on a shared fuse need to be replaced.
12. Retailers should provide important information in a clear, streamlined and consistent way to small customers before any smart meter upgrade
Up-front and customer-friendly information should be supplied to customers to support the deployment of smart meters and empower customers to make the best of their meter upgrades. Retailers should also inform customers about any up-front costs and changes to a retail offering resulting from the meter exchange. This would help address the risks of customers facing higher costs in the short term before the longer-term benefits of accelerated deployment are realised.
13. Develop a ‘primary source’ smart energy website to enable consistent and customer-friendly information
A known and trusted authority should develop a smart energy website to enable this information for customers. The website should detail why deployment needs to be accelerated and the role of the smart meter in the energy transition.
14. Allow for and accept customer’s requests for a smart meter from the retailer for any reason
Customers should be able to request a smart meter for any reason. The current framework does not specify that a retailer must install a smart meter at a premise upon a customer’s request. Although common practice, the Commission seeks to clarify that customers can request and receive a smart meter for any reason.
15. Implement appropriate replacement time-frames for meter malfunctions
A longer replacement timeframe is recommended for family failures than for individually identified malfunctions. Separate time-frames for individual and ‘family’ failures of meters are needed to reflect the different nature of the failures and the resources required for replacement.
16. Remove malfunctions exemptions
Improve compliance with time-frame requirements for replacing malfunctioning meters and preventing a backlog of malfunctioning meters in AEMO’s (Australian Energy Market Operator’s) exemption register.
17. Address customer risks
The Commission recommends a consumer safeguard for tariff reassignment upon meter exchange, including either strengthening consideration of consumer impact principles or prescribing a new transitional arrangement.
18. Implement a power quality data access and exchange framework
DNSPs should be given a provision to procure power quality data (voltage, current and power factor) from Metering Coordinators (MCs), which MCs must provide at least once a day in a standard format and exchange architecture. DNSPs can also procure additional services, like a multi-meter ping or data enquiry.
19. Enable innovations in access to (near) real-time data
Customers should be able to access real-time data sooner.
20. Evaluate consumer concerns about privacy
Privacy concerns were the second most significant barrier to consumers requesting a meter in the Newgate study. This is an existing risk that may grow under accelerated deployment as more consumers receive a smart meter sooner. Using the ESB’s (Energy Security Board’s) consumer risk assessment tool, a line can be drawn between information transparency measures and market participants’ compliance with the privacy principles and policies.
AEMC Chair Anna Collyer stated on the importance of driving smart meter rollout: “You can’t run a smart system on the old, ‘dumb’ technology like traditional accumulation meters.
“Smart meters are foundational to a more connected, modern and efficient energy system that allows all consumers to get data about their household energy use. They also allow providers, in a secure way, to get the information they need to provide better service to consumers.
“Smart meters really are the gateway to a more dynamic and flexible market where energy is traded both ways. The sharing of power quality data with distributors would also help manage supply and reduce future spending on expensive poles and wires.”
The draft report is now open to submissions with a final report expected early to mid-2023.