Smart Meters between Innovation Promise and Consumer Benefit. Anne Kallies, RMIT and Lee Godden, Melbourne Law School

Transcription

1 Smart Meters between Innovation Promise and Consumer Benefit Anne Kallies, RMIT and Lee Godden, Melbourne Law School

2 Presentation is based on a book chapter co-authored with Lee Godden, Smart Infrastructure: Innovative Energy Technology, Climate Mitigation and Consumer Protection in Donald Zillman et al(eds), Technological and Legal Innovation in Energy Law (OUP, 2018)

3 Smart meters and innovation Three examples: Victoria, NEM, Germany Roll out and cost-benefit New roles introduced Consumer protection Questions

4 What is a smart meter? Smart meters monitor energy use in homes and buildings in real time can transmit data, receive commands, monitor supply and communicate with appliances Consumers can monitor and adapt electricity use Utilities can remotely read, connect, disconnect Businesses can use data collected to offer new services

5 The Smart Meter Promise: Climate Protection and Energy Efficiency and consumer savings! Energy efficiency encouraged by smart metres, smart technologies and smart cities IT controlled energy use: designed to reduce GHG emissions A range of applications: managing consumption, electric cars, peer to peer trading, generally providing information to supply new energy products and services

6 The Promise: Consumer Benefits Origin Energy website Smart technology will help you to remotely switch off your appliances before you arrive home so your house can be cool in summer and warm in winter. Smart meters are a game-changer. They have the potential to change the relationship we have with energy.

7 Easy to Achieve? Victoria has infrastructure [smart meters] in place that might lead to future innovation and benefits to consumers. Government's role must now be to help consumers to get the most out of what they have paid for. Achieving these benefits relies heavily on the majority of consumers changing behaviour, including by finding a better electricity deal and changing consumption patterns. Victorian Auditor General, Realising the Benefits of Smart Meters (September 2015), Victorian Government Printer at viii.

8 Three Models of Smart Meter Introduction Victoria s Smart Meter Rollout Early adopter mandatory rollout Shifting narrative from demand side management to consumer choice AEMC Power of Choice Rollout About to commence market-led rollout Focus on innovation through competition Germany: A reluctant adopter Scaffolded rollout (depending on energy user) Focus on managing the energy transition

9 Focus on three issues: How does law enable and regulate the rollout? What new roles and responsibilities have been added and for whom? How is consumer privacy protected?

10 Victoria: Rollout ( ) Facilitated through wide ranging discretionary powers for government to make orders (s 46D Electricity Industry Act 2000 (Vic)) Rollout responsibility of distribution network providers As significant public funds were used two Auditor General Reports (2009/2015) heavily critiqued lack of stakeholder involvement, unclear economic estimates and lack of consumer benefit Problem: benefit realisation relies on savings being passed on to consumers not automatic process

11 Victoria: New Roles and Responsibilities/Consumer Protection Roles: Distributor-led - No new contestable roles! (unlike in other examples) One problem no consumer relationship with the distributor Privacy: Ch 7 National Electricity Rules set out requirements around data collection, handling, access and confidentiality Retailers and distributors are bound to industry codes of practice as part of their licence under state law Consultancy report found that this protects sufficiently but layers of protection need rethinking if third parties other than retailers/distributors get access in the future

12 AEMC Rule Change: Rollout AEMC s power of choice market recommendation to introduce competition in metering services Rule change to commence on 1 December 2017 (Victoria exempted) Market-led rollout: Where new and replacement meters are required of where energy businesses and consumers want access to advanced metering services Expected to head off consumer backlash

13 AEMC Rule Change: New Roles and Responsibilities Reassigning and extending existing roles in regard to metering Distributors used to be responsible person : Metering costs and assets were part of the distribution cost on the bill Now three new, potentially separately contestable roles: Metering coordinator Metering provider Metering data provider Also potential access by energy companies offering services via metering coordinator

14 AEMC, Competition in metering services (Information Sheet, 2015)

15 AEMC Rule Change: Consumer Protection All new roles require accreditation and registration with AEMO depending on a list of capabilities including the capability to maintain data security Access to metering data will only be provided as far as permitted under the rules Entities authorized to access metering data services are the retailer, the distribution network service provider and parties with a small customer s prior consent

16 Germany s Smart Metering Act 2016: Rollout Reluctant adopter implementing EU directive requirement to install smart meters to at least 80% of consumers by 2020 if positive cost-benefit analysis CBA requirements means staggered rollout only mandated once annual metering charges fall under a designated amount per year Also even if costs are low enough rollout is subject to being technically possible this is only the case if three independent businesses offer them in the market which meet certification requirements by Federal Office for Information Security

17 Germany s Smart Metering Act 2016: Roles and Responsibilities Further unbundling, similar to AEMC model Meter operation as discrete role, meter management to be separated from data management and security Meter operator becomes contestable (existing role currently with distributor, but to be administratively separated from distribution) Smart meter gateway administrator: technical management of the communication unit central for guaranteeing data security, currently part of the meter operator role, but needs separate certification through Federal Office for Information Security

18 Germany s Smart Metering Act 2016: Consumer Protection A precautionary approach Privacy by Design Constitutional right to informational self-determination Ch 3 of the Act as well as technical directions by Federal Office for Information Security strictest rules in Europe - certification requirements by Federal Office are not currently achievable If financial and technical requirements are fulfilled no opt-out possible for consumers

19 Final Remarks: Smart meter management as further unbundling increasingly fine-grained delivery of contestable services Not yet clear if the three models offered can realise the innovation promise: Is the introduction of new contestable role sufficient? Huge task to properly protect consumer data and privacy with influx of potential new capabilities and services and associated entities delivering those Consumer benefit is assumed, but not easily realised may require to educate consumers to make most of the options

20 Thank you! Questions? You can contact me at