Energy system needs to be more Apple than big-3 energy company

Image ex Canva for blog post by Wattwatchers CEO Gavin Dietz

This week a youngish tech billionaire is seeking to add new faces and fresh ideas to the Board of AGL, one of Australia’s oldest companies, and a pillar of the country’s traditional energy establishment.

Over at Origin Energy, a big-three energy gentailer along with AGL and Energy Australia, the Canadian mega-investor Brookfield is bidding billions to take over its energy retailing business, and says its planning to pitch a further $20 billion into solving the energy transition for Australia by 2030.

These are far from business-as-usual times in the energy sector.

Many in corporate Australia will be tuned in to the power games playing out at AGL, where its largest individual shareholder, Atlassian co-founder and climate activist Mike Cannon-Brookes, is backing four candidates for independent directorships.

His nominees’ names are interesting, but it’s the skill-sets they offer that are most revealing: customer experience, digital and technology transformation, business transformation, people and culture resets, consumer business models and engagement, energy markets and transition, behind-the-meter battery technology and renewable generation.

We need a technology step change

Our electricity system needs to become more Apple than AGL, Origin or Energy Australia.

This is true for a strongly-functional, affordable and resilient system to support the electrification of everything, underpinned by 100 percent-plus renewables. 

And it’s true if we want engaged and empowered consumers, equipped with the real-time information and smart homes they’ll need to participate in a digitised electricity system with many consumer-side energy resources – rooftop solar, on-site batteries, electric vehicles, and controllable loads like hot water and pool pumps.

The whole energy sector establishment needs more of these skill-sets, and many fresh technologies too.

People are focused on power prices

Of course, most of Australia’s 10 million-plus electricity customers couldn’t give a toss about the Board contest at AGL, or who ultimately owns Origin.

Right now, as revealed in last month’s Federal Budget, they are facing power prices rising by an incredible 56 percent over the two years to the end of 2023, on top of years of earlier rises, and now rapidly shrinking household spending budgets.

Such increases are incredibly corrosive for households and small businesses, socially and economically. They hobble businesses, terrify pensioners and other people on fixed incomes, place real stress on discretionary spending by struggling households, and force people into horrible choices for their health and well-being, like: Do I stay warm, or cool, or eat?

Reducing business and consumer energy costs needs to be at the forefront of decisions right here and now. There is no time to wait on this if we want to bring people into the energy transition, as we must.

Incumbency has reached its use by date. So has incremental change. It’s time for more revolutionary ideas and actions, implementing 21st Century technologies and business models which deliver consumer benefits now, rather than patching up failing 20th Century ones.

CDR and smart meters

Which brings us to a pair of long-term energy sector reform efforts that are on the agenda this month.

Both relate to so-called ‘smart meters’, an early digital technology for energy which utilities use primarily to bill customers, and neither will excite desperate consumers. Most people will be unaware they exist at all, just as they are unaware of most of what happens in the complex world of energy sector markets, regulations and operations. 

The first is the start of the Consumer Data Right (CDR) for energy, which has been in the making since 2017 at least. ‘Open Energy’ is meant to foster a brave new world of customer empowerment, making utility data easy to access and to share with third-party solution providers, like solar installers.

But here’s the catch. It’s really only useful for data from customer sites that are installed with smart meters.

Usher in the Australian Energy Market Commission (AEMC), the market rule-maker, and its release this month of the draft report of its Review of the regulatory framework for metering services.

The AEMC now hopes for completion of Australia’s smart meter rollout, which began in the 2000s (I know, because I was part of it back then), by 2030. 

Currently, outside of Victoria which hit full deployment a decade ago, the AEMC estimates that ‘average smart meter uptake’ is only around 30 percent, and warns at current rates it could take past 2040 to complete the job.

Its recommendations to speed things up come with the observation that: ‘Customers’ bills could increase in the short-term as a result of the accelerated deployment of smart meters.’

Good luck with selling that to electricity customers in 2023! 

We need customer-driven solutions

The smart meters being deployed don’t give energy users the data they need to understand their electricity bills, make changes, and take the journey to the smart energy home that optimises solar, battery, appliances and the grid.  A smart meter is a grid-driven solution that does not transition to a digitised energy system.

In a country that leads the world on rooftop solar, installed at a third of Australian homes, today’s smart meters only ‘see’ solar that is exported to the grid. They’re blind to the ever greater amounts being self-consumed and self-optimised as part of the electrification and digitisation of the home.

Even worse, the technology we’re getting is totally outdated. In consumer-facing terms, the smart meters being deployed now are less advanced than those selected for the Victorian rollout, which at least allowed a real-time connection to in-home display units.

Lower bills are still the priority

What consumers really want is lower energy bills and, in many cases, greener, more sustainable living. How do these metering reforms deliver these in 2023? Or even 2030?

They don’t. They overwhelmingly help incumbent retailers and the grid, and deliver very little in terms of consumer benefits (and a recent US report indicates utilities have turned off the main feature that could benefit consumers in 97 percent of cases for over 14 million federally-funded smart meters deployed there).

Changes don’t come for free. A smart meter mandate, maybe by 2030, costs someone: either us the consumer or us the taxpayer. Let’s make sure that whatever solutions we are going to pay for, they put energy users in charge, centre of the equation, and able to self-reduce energy costs once and for all.

In the two decades during which Australia has muddled metering, other more nimble technologies have advanced dramatically. Think smartphones, online platforms and the Internet of Things. And consumers who expect service and satisfaction in real time!

We can see the dynamics at play at AGL and Origin. But what would Steve Jobs have done?

Technologist Gavin Dietz has been CEO of Sydney-based scale-up Wattwatchers Digital Energy since 2016.