Just as the global demand for energy is steadily increasing, so too are the recognised costs of power generation. A recent report1 into the possibility of creating a low-emissions future by Australia's Treasury noted that electricity production currently accounts for 34% of the nation's net greenhouse gas emissions, and that it was the fastest-growing contributor to greenhouse gas emissions over the period from 1990 to 2006.
This growing realisation of the true cost of energy production will be brought into stark relief, with the likely implementation of a national Emissions Trading Scheme in 2010.
Australia's energy producers are entering an era of great change, with increasing pressure to drive efficiencies in both the supply and demand sides of their businesses.
These pressures manifest themselves in the operation of energy and utilities organisations in three basic needs:
- To tighten the focus on delivering value, within the paradigm of achieving more with less and while concentrating on their core businesses.
- To exploit the opportunities of an industry in transformation and to build new capabilities.
- To act with speed in terms of driving leadership, setting the agenda, managing change and leveraging experience, all while managing risk.
The net effect of the various government initiatives and mandates around energy production is to drive energy and utility companies to deliver power more responsibly and more efficiently. The most obvious evidence of this reaction is the development of Advanced Metering Infrastructure (AMI) and Intelligent Network (IN) programs across Australia. Yet a more fundamental change is also starting to emerge - a change that is leading companies to work more openly and more collaboratively toward a smarter energy value chain.
This renewed sense of purpose gives energy and utilities organisations an opportunity to think and act in dynamic new ways as they re-engineer their operations to:
- Transform the grid from a rigid, analog system to a responsive and automated energy delivery system by driving operational excellence.
- Empower consumers and improve their satisfaction by providing them with near real-time, detailed information about their energy usage.
- Reduce greenhouse gas emissions to meet or exceed environmental regulatory requirements while maintaining a sufficient, cost-effective power supply.
An Australian approach to a global issue.
In Australia, Country Energy, a leading essential services corporation owned by the New South Wales Government, is leading the move to change not just their own organisation, but the entire electricity supply industry.
With the strength of around 4,000 employees and Australia's largest power supply network covering 95 per cent of New South Wales' landmass, Country Energy recognised the scale and scope of this industry challenge meant no single player could find all the answers by themselves.
A Powerful Alliance
Formed by IBM, the Global Intelligent Utilities Network (IUN) Coalition represents a focused and collaborative effort to address the many economic, social and environmental pressures facing these organisations as they shape, accelerate, and share in the development of the smart grid. Counting just one representative organisation from each major urban electricity market, the Coalition will collaborate to enable the rapid development of solutions, adoption of open industry-based standards, and creation of informed policy and regulation.
Not only does the Coalition believe these three streams of collaboration will help drive the adoption of the IUN or 'Smart Grid' in markets across the planet, but the sharing of best practice information and creation of a unified direction for the industry will help reduce regulatory, financial, market and implementation risks. And, like all productive collaborative relationships, the rewards for individual members are likely to become amplified as the group grows, learns and shares.
A global coalition producing local results
s Australia's only member of the Global IUN Coalition, Country Energy has been quick to capitalise on - and contribute to - the benefits of the global knowledge base, adapting the learnings from overseas operators in both developed and emerging markets and applying them to the unique challenges of a huge landmass with a decentralised population.
From its base in a nation rich in natural resources, the Australian energy and utilities industry is quickly moving to adapt to the emergence of a carbon economy.
One of Country Energy's key projects in this realm is the development of its own Intelligent Network, providing the platform for developing Country Energy's future network strategy, incorporating distributed generation and storage, as well as enabling consumer interaction through the provision of real time information on energy consumption, cost and greenhouse footprint.
A collaboration with the community
Keen to understand how the Intelligent Network will work for customers and it's own employees, Country Energy is moving the smart grid off the page and in to real life.
Designed to demonstrate, measure and evaluate the technical and commercial viability of Intelligent Network initiatives, two communities have been identified by Country Energy, with the primary goal of learning from both the suitability of the solutions implemented and the operational partnership models by which they will be delivered.
These two Intelligent Network communities are intended to provide a live research environment to evaluate current understandings and technologies, and will include functionality across nine areas, including smart meters, electrical network monitoring and control, and consumer interaction and response.
Demonstrating the future
In preparing to put the digital age to work, and to practically demonstrate to stakeholders what an Intelligent Network will deliver, Country Energy has developed Australia's first comprehensive Intelligent Network Research and Demonstration Centre near Canberra.
This interactive centre shows what the power network of the not-too-distant future will look like and how it will change the way power is delivered, managed and used.
The Centre includes a residential setting to demonstrate the 'smart home of the future' while giving visitors a preview of a energy network that automatically detects where a power interruption occurs, providing up to date information to network operators and field crews.
An initiative as far-reaching as the Intelligent Network will rely as much on human understanding as it does on technology and infrastructure.
Implementing an innovative regional delivery model
In addition to the Global IUN Coalition, IBM and Country Energy developed and implemented an innovative new business model to transform its application development and support capability. In 2008, Country Energy signed a four year agreement with IBM to establish a Regional Development Centre, located in the regional city of Bathurst.
The Centre is designed to help maximise cost efficiencies, accelerate the pace of skills transfer through close links with the local higher education facility, Charles Sturt University and support Country Energy's application needs as it moves forward on its Intelligent Network journey. The centre is also providing services to other IBM clients.
Through the Development Centre, Country Energy aims to improve service levels and innovations delivered to their business via skills transfer to Country Energy. The outcome also allows Country Energy to meet its commitment to support regional areas and offers a viable alternative to global delivery models.
Looking to the future
In many ways, the energy and utilities industry has come to symbolise the crossroads that many of the planet's systems find themselves at this moment in time: legacy systems are operating in an economic and environmental ecosystem that is simply unable to sustain current levels - let alone the projected demands of global growth.
Yet help is at hand: infusing these systems with the instrumentation to extract real-time data from every point in the value chain; interconnecting these points to allow the constant, back-and-forward flow of information; and finally, employing the power of analytics to give these systems the gift of intelligence.
In real terms, IBM and Country Energy are harnessing the depth of knowledge and expertise of the Global IUN coalition, collaborating to help change the way the industry operates at a fundamental level in order to create an Intelligent Network. This new 'Smart Grid' will operate as an automated energy delivery system, empowering consumers and improving their satisfaction by providing them with near real-time, detailed information about their energy usage.
And for the planet that these consumers - and billions of others - rely upon, Country Energy's efforts will help reduce greenhouse gas emissions while maintaining that most basic building block of human development: safe, dependable, available and cost-effective power.
1. Australia's Low Pollution Future
The Economics of Climate Change Mitigation
© Commonwealth of Australia 2008
ISBN 978-0-642-74484-5
Commonwealth Copyright Administration
Attorney-General's Department
Robert Garran Offices
National Circuit
BARTON ACT 2600
