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Smart Grids would make a lot of sense in Chile, an energy-poor country facing a power crisis. Hydroelectric plants have been producing 60% of Chile’s electricity, while the remaining 40% has come from natural gas imported from Argentina. Due to a reduced supply of Argentine gas and lower hydroelectric reservoir levels caused by scant rainfall, Chile has had to look for alternative sources of power. In March 2008, a law was passed requiring electricity companies to invest in nonconventional energy sources (NCES), including wind, solar, geothermal, and hydraulic power. By 2010, at least 5% of all the electricity supplied by any one of Chile’s utilities must come from NCES, gradually increasing to 10% by 2024. The law is an attempt by the country to diversify its supplies as it tries to feed a booming industry, particularly in the copper mining sector.

Smart Grids are intelligent IP overlays of the electricity grid by means of which utilities can better manage their network, limit electricity loss, reduce carbon emissions, prevent outages, and provide customers with in-house information and tools (smart meters) to better manage their own energy use. Broadband Powerline (BPL), fibre-optic, fixed-wireless, and mobile can all be used to link a smart grid backbone to a customer’s premises, and such a network also offers opportunities to sell excess capacity (on a wholesale level) to other telcos and ISPs.

The idea of broadband in conjunction with their electricity networks is not an entirely new idea for Chilean utilities. In the 1990s, when BPL solutions looked promising, three Chilean electricity companies (Chilectra, CGE, and EMEL) undertook BPL tests. In 2001, Subtel granted Compañía Americana de Multiservicios Limitada, a subsidiary of the Enersis group (a Chilean utilities conglomerate with Spanish ownership interest), authorization to implement a pilot project based on BPL technology, exclusively for exhibition purposes and not to be implemented commercially. But tests globally came to a standstill due to problems in relation to international standards and radio interference. In 2004, technological developments spurred renewed interest in BPL, but further delays in standardisation, the relatively high cost of hardware, added to the fact that moving further into the broadband access market was outside their core business, put a virtual stop to new deployments over 2006-2007.

In March 2005, Chilean triple player VTR (provider of converged telephony, broadband, and cable TV) was the first company in Latin America to launch an In-House BPL service commercially for its residential clients. In-House BPL, also known as Power Line Indoors or Internal Telecoms (PLIC), is a home networking technology that uses devices developed by HomePlug Powerline Alliance. VTR’s system converted a dwelling’s electrical wiring into an Internet access network, allowing users to connect a WiFi transmitter or cable port to any power point in their homes. The service was however expensive and short-lived, and had disappeared from the company’s offerings by 2007.

Chile’s main electricity distribution firm Chilectra has toyed with BPL technology on a broader scale, across its entire grid. Lacking a telecom service licence, the company aimed to offer the system as a backhaul alternative for licensed carriers, but commercialisation of the system is on hold despite extensive testing.

A ‘Smart Grids Latin America’ conference, to be held in Santiago de Chile, is scheduled for November 2008. The purpose of the conference is to sensitise Latin American utilities, regulators, consultants, and vendors to the huge changes taking place globally in utilities’ power delivery and metering markets, and to understand the future impact these changes will have both nationally and within the region. It is to be hoped that the conference will spur Chilean utilities to invest in Smart Grid infrastructure.

See also: Chile - Convergence, Broadband and Internet market

Lucia Bibolini - Senior Research Analyst - BuddeComm

I certainly believe that our industry should have, and could have, made a greater contribution to the Summit. We could have played an important role in generating visions and strategies for e-health, tele-education, smart grids and e-government.

By failing to be more prominent part of the Summit we missed the opportunity for really effective participation. Telstra seems to be the only company that was represented with several delegates. Many more from our industry were nominated, but in the end they didn’t make it onto the Prime Minister’s final invitation list.

Having said that, the reality is that our industry will be the facilitator in many of the issues raised by the Summit.  Every item identified by the ten groups will require input from our industry.

The fact that telecoms and the digital economy were grouped under infrastructure was reasonable and correct. This further highlights the fact that the government needs to ensure we have structurally separated infrastructure from the telecoms services, to facilitate what this group put on it top priority list – a world-class broadband system to foster full participation in the digital economy.

Proposals currently on the table from Telstra could jeopardise this, as the access price to that broadband infrastructure would be out of the reach of most Australians.

I would suggest mini-ICT summits, bringing the various industries and government organisations together to address some of the issues as a follow-up to the 2020 Summit.

Of course, one could argue that the telco industry is conducting its own 2020 Summit at the moment, trying to achieve the right outcomes for the Minister’s plan for a National Broadband Network. This debate is far from over.

Another key outcome from the various groups at the Summit was a more collaborative government and, again, these are issues that our own ‘Summit’ has been addressing. One could almost say that we are even a step ahead, having brought together four federal departments in our smart grid debate (Climate Change, Environment, Energy and Broadband).

The Smart Grid Australia alliance will take a coordinating role in this process from here on. There was another link from the Summit to this topic. Under the Summit topic of ‘Sustainably’ the Climate Change group also listed smart grids with true intelligent meters at people’s homes as a key item.

Next month at the FttH Applications Roundtable we will begin to make strategic plans (under the banner of the FttH Applications Workgroup – part of the FttH SIG). We will be discussing how we can also bring the Departments of Education and Health into dialogue with the broadband infrastructure developments.

Both health and education featured strongly on the Summit’s topics list and I hope that this will also be followed up within our industry. If we are building a nationwide broadband infrastructure why aren’t we talking more about the need for this infrastructure to facilitate health and education? These services have nothing to do with high-speed Internet to peoples’ homes. The organisations/authorities involved need to be able to use the broadband infrastructure to deliver their services, independently and at a very low cost. If that was brought home more clearly to the decision-makers in these departments they would better understand the importance of getting the management and structure of that broadband infrastructure right, so as to facilitate real wins in these social sectors. A vertically-integrated telecoms industry cannot deliver an economically viable broadband infrastructure for healthcare and education – it’s as simple as that.

On the positive side, there is now more political will at the top to build more collaborative government structures, but at the same time the reality is that these departments are already overloaded and have little time left to look beyond their own borders. Unless direction comes from the highest levels of government this will not happen, beyond token gestures and lip service.

I judge these to be the key issues for our industry, and I will be exploring how we, as an industry, can further contribute to the work that will now follow the Summit.

Your ideas and suggestions are very welcome.

Paul Budde

See also:

• Australia - Competition Issues – 2008
• Australia - Labor Government Policies – 2008
• Australia - Operational Separation of Telstra
• 2008 Australia - Government, E-Health, Energy and Tele-education Markets
• 2008 Australia - E-Commerce, Marketing and Advertising
• FttH Special Interest Group
• FttX Plans from Telstra and G9
• Australia - Smart Grid Australia
• Australia - Utilities Broadband - Smart Grids Moving into 2008
• Australia - Revenue Statistics, Analysis & Forecasting (by provider) - 2000-2009
• Australia - Revenue Statistics, Analysis & Forecasting (by service) - 2000-2009

At the Smart Grid Roundtable we were provided with an excellent introduction – one that set the scene for the day.

Shayleen Thompson, A/g First Assistant Secretary of the Strategies and Coordination Division Department of Environment and the Department of Climate Change, outlined the fundamental shift in environmental policies that has taken place since the new government took over.

The conclusion I drew from Shayleen’s introduction was that the policies that were developed prior to the election now need to be considered in relation to the new climate change and environmental realities – and for the ICT and energy industries this will involve checking government initiatives such as smart meters and the NBN against the new directions.

The two presentations that followed enabled the Roundtable to discuss these initiatives and, indeed, to touch them against the information provided by Shayleen. These presentations were given by:

• Mishael J Assistant Manager Demand Response Energy and Environment Division - Department of Resources, Energy and Tourism.
• Brian Kelleher, Manager NBN Taskforce - Department of Broadband, Communications and the Digital Economy.

Smart grids require regulatory changes
Mishael J provided an overview of the Federal Government’s proposal in relation to the smart meter project. While significant progress has been made in defining the functionalities of smart meters the delegates remained seriously concerned that the project is not properly addressing the issue of smart grids – in particular with a renewed focus on the climate change situation. For example, the need for the facilitation of more distributed energy in the network requires nothing less than a fully-fledged intelligent network (smart grid).

We also asked the representatives of the Department of Climate Change to use their influence in making sure that this unique opportunity and significant investment ($2 billion government funding in Victoria alone) incorporates the smart grid network requirements needed to facilitate the management of distributed generation requirements.

There is serious concern that, by maintaining a narrow focus on smart meters, the massive new project about to be launched in Victoria could, within a few short years, end up a massive stranded asset.

Since the project was initiated in Victoria in 2004 most utilities are now in agreement that under the right regulatory regime they would prefer to embark on the broader vision of smart grids, rather than having a narrow focus on smart meters. However it is the current very short-sighted and out-of-date regulatory regime that is preventing the development of smart grids.

With the stroke of a pen the regulatory regime could be changed so as to facilitate the development of smart grids. The utilities are ready and the technology is available;  it would be catastrophic if at this stage Australia were to miss the opportunity and embark on a dumb solution.

NBN requires regulatory changes
While the outcomes of the NBN are far from decided the Roundtable believes that the scope of the NBN is so broad that it will have implications for the electricity industry as it moves towards Smart Grids. Changes to the availability of existing telecommunications infrastructure and services will either enhance or retard the development of M2M, Machine to Machine communications required for Smart Grids an other applications in e-health, e-learning and e-government.

All of these essential applications require very low cost access to this infrastructure for telemetry type IP applications which are needed for interactive energy meters (Smart Meters), interactive diagnostic equipment to the network and so on.

The Smart Grid Roundtable concluded that the NBN RFP was seeking input in the “Regulatory Submissions” round which would provide the opportunity for Smart Grid Australia put forward its value and need, to be assessed as part of the solution required from the NBN along with the envisaged traditional Telco services such as Broadband Internet Access, Voice and Video.

International benchmarks
The presentations by Dr Jürgen Bender and Professor Robin Eckermann both supplied an international perspective on where these developments are heading. In Europe, in particular, a watershed in European policies is forcing governments to be far more proactive in the field of climate change, and these policies are stimulating the development of smart grids.

Also, there is now overwhelming evidence that, taking the wider climate change issues on board, the economic benefits of smart grids far outweigh the costs involved.

For us to now, at this historical juncture, ignore these wider benefits would be one of the dumbest decisions we could make.

The Smart Grid Australia alliance has formed two working groups. One will provide a submission for the Department of Energy on the regulatory changes required to make possible the introduction of smart grids, and the other will prepare a proposal to the Department of Broadband in relation to the regulatory requirements needed to facilitate telemetry IP applications for developments such as smart grids.

As always, your ideas and suggestions are very welcome and I will gladly pass them on to these workgroups.

If you are interested in joining the Smart Grid Australia alliance, see Australia - Smart Grid Australia.

If you missed the Roundtable these issues will also be addressed at the Breakfast meeting on May 6th . For more info see: BuddeComm Breakfast Meeting.

Paul Budde

See also:

• Australia - Smart Grid Australia
• Australia - Energy Utilities Markets
• Australia - Utilities - Major Players and Projects
• Australia - Utilities Broadband - Smart Grids
• Australia - Utilities Broadband - Smart Grids Moving into 2008
• Australia - Utilities Broadband - The Market in 2007
• Australia - Government’s National Broadband Plan
• Australia - FttH Special Interest Group
• Australia - FttH and FttN Market and Industry Analyses
• Australia - Digital Media - E-health
• Australia - Digital Media - E-education
• Australia - Digital Media - E-Government