1. Smart Cities Expo World Forum
The role of Smart Cities and Homes in the Australian National Energy Market
Ian McLeod
Smart Cities Expo World Forum
31 August 2017

2. Introduction: Ian McLeod
Director: Smart Energy & Digital Asset Management
Global Ambassador – Edison Electric Institute (USA)
Chairman – Queensland Futures Institute – Energy Committee
Advisory Board Member
Technology – Smart Wires & Energy Thought Summit
Academic – (Aust) Monash Energy Materials & Systems Institute & James Cook University Engineering
Leadership Group: Agenda 2026 (Spatial)
Edison Electric Institute 2015 International Edison Award for Innovation (spatial)
Climate Alliance’s 2015 Business Innovation Award (Climate Change Response)
EPRI Smart Grid Knowledge Transfer
Engineers Australia – 2016 Innovation (Battery)
Australian Institute of Management Regional Professional Manager of the Year
Former Chief Executive Officer
Ergon Energy Corporation Ltd ( )
Former Deputy Chairman/Director
Energy Supply Association of Australia ( )

3. Topics
The role of Smart Cities and Homes in the Australian National Energy Market
Liberating existing resources to fund a cleaner, secure and affordable future
Creating an energy market player that is truly customer centric

4. What Happened on the 8th March 2017?

5. What Happened on the 8th March 2017?
The Australian Prime Minister, Malcolm Turnbull, announced that the east coast of Australia was facing an energy crisis with potential for electricity shortfalls in 2018/19.
On the 30th August 2017 Prime Minister gets agreement from retailers to write to 2 million residential customers on standard offers to inform them on availability of better deals

6. How Did We Get Here?
A flat and dry continent
The constitution
Abundant energy resources – scarcity?
An energy market – 1998
Policy disruption – Regulation, Standards, Targets, Technology
Technology – disruptor or enabler

7. Disruption: Policy Network & Market
Network Policy Disruption
Energy Market Commences
Climate Policy
Disruption

8. Federal Policy & Strategy
Disruption: Policy
The Market vs Policy vs Subsidies
Federal Policy & Strategy
Carbon Reduction
5% off 2000 levels by 2020
25-28% off 2005 levels by 2030
Renewable Energy
33,000 GWH by 2020
Small Scale Renewable Energy Scheme
Large Scale Renewable Energy Scheme
National Energy Productivity Pan
40% increase by 2030
National Strategy On Energy Efficiency
States relying on National Grid for security to maximise intermittent renewables
Victoria will become net importer with Hazelwood closure
Victoria legislates Renewable Target
Vertical disaggregation & renewable policies & subsidies and deterministic supply standards drive inefficient deployment of capital
Energy only market drives inefficient use of resources - Hydro
50% by 2030
50% by 2025
40% by 2025

9. Energy & Infrastructure productivity dropping
Resource Underutilised

10. Round 2: The Utility Scale & Battery Race
Will it be a knock out ?
4000MW of Utility Sale Renewable projects in progress – Investment $8B. Huge pipeline.
The race is on but who will be the winner, and who pays
Federal: Snowy Hydro Pumped Storage – 2000MW & Base load coal in North Queensland
Victoria: $1.5B – Renewable tender
South Australia: $550M – Our Energy Plan
Queensland: $1.16B - Powering Queensland Plan

11. Inefficient Deployment Of Capital The Energy Supply Chain
GDP?
Supply
Demand
Inefficient & flat to contracting
Inefficient & growing? = =
Investment
Industry disaggregation, lack of planning, broken markets, poor policy & subsidies result in inefficient deployment of capital

12. Inefficient Deployment Of Capital The Energy Supply Chain
GDP?
Supply
Demand
Inefficient & flat to contracting
Inefficient & growing? = =
storage
Investment
Industry disaggregation, lack of planning, broken markets, poor policy & subsidies result in inefficient deployment of capital

13. Customer Fight or Flight The Energy Supply Chain
What happened to the economic rationalist
Customers trust bank is diminishing
Subsidies and substitution
Industry not organised to deliver their core product
Retail competition primarily on discounts. The real competition is happening in technology. It should “Make Things Better”
Flight is increasing

14. Smart Cities: Liberating Resources

15. Technology Maturity & Importance
Source: 4th Annual Municipal Utility Outlook: Zpryme July 2017
Many of the technologies associated with smart communities and cities are seen as less mature and not important to the industry

16. Tech Importance & Utility Understanding
Source: 4th Annual Municipal Utility Outlook: Zpryme July 2017
Utilities don’t understand Smart City enabling technology well and don’t see it as important to their success

17. Utility Tech Deployment In Next 3 Years
Source: 4th Annual Municipal Utility Outlook: Zpryme July 2017

18. Liberating existing resources for Smart Cities
A working example: Ergon Energy
Projects such as Townsville Solar Cities, Townsville Energy Sense Communities and Empower Mackay defer or avoid $660M & removed 139KVA off the peak.
Spatial Intelligence and Virtual World technology reduced operating costs and improved customer service
Regulated to require Demand Management Plans
Volume & revenue now separated for all networks
Savings from nexus of electricity, water and sewerage

19. Making Smart Cities Smart
Spatial, Digital, Virtual & Augmented Reality & Artificial Intelligence, Predictive Analytics and Automation
Spatial
Services
Works Program
Condition
Data
Assets
Energy
Social
Human Resources
Built Environment
Natural Environment
Customer
Fused,
Processed & Analytics
Green Canopy
Energy Map
Improved Risk Management & Insurance costs
Extend Asset Life Cycles
Increased return
Outcomes
Reduced vegetation costs
Improved customer service
Increased network resilience
Reduced outages
Community & Employee safety
Improved regulatory outcomes
Reduced costs

20. A Customer Centric Energy Market Participant
Leveraging Resources To Monetise and Influence The Energy Market
National Electricity Market
Smart City Co-operative
Energy Manager
Townsville
Ballarat
Newcastle
Adelaide
Hobart
Smart Cities

21. Thank You