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Author's profile photo Phillip Vaughan

Managing Power of Choice in Australia

Deregulation and industry separation has been an effective model for creating efficient utilities in the energy sector over the past twenty years. However, some problems with this model have emerged in recent times with introducing smart grid technologies.

Notably in Australia the distribution networks are responsible for installing and maintaining the meter. However, not all of the benefits of expensive smart meters, which can be remotely controlled and operated in real time, accrue to the distribution utility. Some benefits might be only realized by retailers and their end consumers. For example, introducing a software pre-paid solution that uses the smart meter to monitor consumption in real-time.

Hence Australian regulators are moving to address this problem.

The Power of Choice is a set of market reforms that will allow Australian consumers to make more informed choices about the way they use electricity based on the benefits that end use services provide. The Australian Energy Market Operator is reviewing changes to the rules:

  • Reforming distribution network pricing
  • Expanding competition in metering and related services
  • Improving customer access to data about their electricity consumption
  • New demand response mechanism
  • Expand consumer access to competitive offers in embedded networks

SAP can play an important role in helping the industry adapt to a new business model, become more efficient, and deliver against core obligations. By moving to a single integrated technology solution “SAP MPMU for Utilities” (f.k.a IDEX), the Australian industry players will:

  • Align to new processes of the deregulated market as they arise, without the delays that bespoke and legacy systems can suffer, because SAP platforms have already embedded processes into the software and utilizes an extensible framework
  • Adopt a system that can readily accommodate new market roles
  • Adopt a platform that will allow entrepreneurial flexibility for enterprises to roll out new products and services envisaged by Power of Choice
  • Join a global network of SAP customers with similar requirements and aspirations

When will all this happen? The new rules have yet to be finalized, but expected later this year. There is an important new role of the meter provider, which will be another interesting development. So stay tuned for more updates.

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