Transition to a smart, affordable, reliable future grid by implementing regulatory reforms, introducing incentives for customer participation in energy system management and planning cross-sector integration.
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Key messages
Energy, particularly electricity, underpins the Australian way of life. The grid is an essential infrastructure backbone that will only become more vital as more services, such as transport, start to rely on electricity. At the same time, the grid is transforming from a centralised one-way service to a decentralised two-way system.
Getting this transformation right is a major opportunity to shape a smarter, more affordable and more reliable energy system, but it will take national coordination and consumer participation.
State and territory energy departments and the energy industry can help improve affordability by demonstrating the value of smart meters to customers. The industry should incentivise smart meter installation, accompanied by customer education; user-friendly digital and mobile tools displaying electricity consumption; and a default time-of-use tariff with an opt-out option and exceptions for vulnerable customers.
Enabling zero-emission vehicle (ZEV) uptake by customers at scale is complex, requiring close cross-sector planning and coordination between the electricity and transport industries.
Smart regulation will deliver the future grid sooner and cheaper. Electricity transmission reforms should
be pursued so low-emission generation can be connected efficiently to the grid.
What are the impacts?
Accelerating access to smart meters and efficient pricing incentives alongside protections for vulnerable customers will unlock opportunities for users to reduce their electricity bills.
Enabling efficient connection of renewable generation and reducing the regulatory burden to enable faster project delivery by network businesses will make electricity more affordable by giving investors the confidence to invest in new supply.
Enabling ZEV uptake will reduce greenhouse gas emissions and environmental pollution. National coordination to integrate ZEVs at scale without adversely impacting the grid will avoid unnecessary additional electricity costs, allow efficient use of the grid and improve planning, collaboration and consistency in governance across jurisdictions and the transport and electricity sectors. Public consultation throughout these processes will add to the transparency of decision-making.
How easy is it to implement?
Implementing the reforms is not expected to significantly change overall costs, with long-term savings offsetting initial upfront costs.
However, complex cross-governmental, cross-jurisdictional, cross-sector coordination and potential regulatory changes are required.
Governments have the capacity in skills and expertise needed to build on concurrent coordination and reform programs – particularly by the market bodies – but additional resources may be needed to fully implement this smarter grid.
How certain are the outcomes?
A smarter, more affordable and more reliable grid is expected to reduce bills and environmental harm. However, pre-existing concerns regarding electricity costs will need to be overcome through mature and honest debate, and strong leadership.
Existing regulatory work programs have developed pathways to change and an evidence base for reform which provide confidence that the reforms can be achieved.
Some of the benefits of a smart grid will be realised through regulatory changes. However, customers will need to access new smart tools and, in some cases, alter their behaviours to take advantage of smart meters and participate in an efficient market. Government can drive the uptake of ZEVs, including fleet vehicles and electric buses, but this also depends on the actions of customers, as well as transport agencies. Some outcomes are therefore outside the direct control of government.
| Access |
Smart meter deployment
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| Environmental |
Transport electrification enablement
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| Quality |
RIT-T and RIT-D time to market
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Read more about this recommendation in 5.2 A smart, affordable, reliable grid in the 2021 Australian Infrastructure Plan.
Reform implementation pathway
This recommendation comprises of outcomes and activities, which form the reform's implementation pathway.
The implementation pathway is designed to guide change agents on the supporting activities necessary to achieve the overall reform.
For each outcome and activity, we propose change agents to act as:
- Proposed sponsor: facilitate, coordinate and champion the recommendation
- Proposed lead: deliver specific activities or lead related outcomes
- Support: share ownership, contributions or knowledge to enable the reform process.
Enable customers to manage their energy bills by incentivising smart meter installation, reforming pricing, and empowering them with the right information and tools.
0-5 years
Accelerate smart meter uptake and enable customers to access emerging energy management technologies by subsidising smart meters, where not already mandatory or provided for free by the retailer as part of an electricity plan.
0-5 years
Empower customers to harness information from the smart meter to reduce their electricity bills by mandating that retailers accompany smart meter installation with the tools customers need to get the most out of them.
- Include free, user-friendly digital and mobile tools that integrate with home energy management systems, give customers transparent real-time access to their energy data, and enable customers to share their data in accordance with the Consumer Data Right for energy.
- Retailers and energy agencies should educate customers on the benefits of smart meters and provide support on how to use energy management tools.
- Retailers and energy agencies should provide free, timely advice on the benefits of an energy management system at the time of installation and whenever customers switch providers.
- Tools and information should be nationally consistent.
0-5 years
Enable customers to actively participate in the energy system and reduce their long-run costs by agreeing a transition towards default time-of-use tariffs for all customers with smart meters.
- State energy departments should mandate that retailers transfer customers with smart meters (including customers who have moved to a premise with a smart meter) to the default time-of-use tariff without any charges, except when the customer opts out or is a vulnerable customer and will be worse off on the time-of-use tariff based on historic consumption patterns.
- Retailers and energy agencies should provide free, timely advice on the long-term benefits for all energy users participating more actively in the system whenever customers switch tariff or providers.
0-5 years
Enable the orderly uptake of zero-emission vehicles by undertaking national cross-sector coordination planning.
0-5 years
Enable the electrification of transport by forming a long-term national planning working group. This should build on the work by the Distributed Energy Integration Program Electric Vehicle Taskforces on improving data access and data standards that help allow for effective national planning.
0-5 years
Integrate zero-emission vehicles into the grid safely and cost-effectively by developing an electric vehicle integration strategy.
- This should build on the work by the Distributed Energy Integration Program Electric Vehicle Taskforces, and include the incorporation of demand management, increasing charging infrastructure visibility and ensuring uptake of smart charging and smart metering.
0-5 years
Enable the better understanding of locational electric vehicle charging patterns and facilitate efficient distribution grid investment by mandating electric vehicle charging infrastructure be added to the Distributed Energy Resource portal.
0-5 years
Secure electric vehicle adoption across the distribution grid and reduce user and taxpayer costs by providing network businesses with limited flexibility to invest in at-risk distribution grids for locations with high electric vehicle uptake.
5-10 years
Safeguard the reliability and security of electricity supply by implementing electricity transmission reforms.
10-15 years
Enable new renewable energy to connect to the grid by implementing the Energy Security Board Renewable Energy Zones reform framework.
0-5 years
Ensure transmission interconnector costs are allocated to the beneficiaries and help new generation connect to the grid more efficiently by implementing transmission access reform.
0-5 years
Fully realise the market opportunity of renewable electricity generation and increase certainty for investors and contractors by implementing the Integrated System Plan and reducing the risk and time for grid connections.
10-15 years
Reduce electricity network project delivery timeframes by streamlining the Regulatory Investment Test for Transmission (RIT-T) and Regulatory Investment Test for Distribution (RIT-D).
0-5 years
Reduce project delivery timeframes and regulatory duplication by exempting planned component upgrades and renewals or projects with unviable non-network options that are included in approved five-year regulated revenue determinations from the Regulatory Investment Tests for transmission and distribution.
0-5 years
Focus regulatory scrutiny on higher-value projects by reviewing the cost threshold for the Regulatory Investment Tests for transmission and distribution with a view to increasing the threshold to only capture material investment.
0-5 years