“Policy designed to support smart grid investments should avoid setting unrealistic expectations, especially the belief that smart grid programs will reduce power bills.” - Lawrence Makovich in Issues in Science and Technology
In September 2013 I wrote an article for The Tasmanian Times questioning whether or not the Tasmanian government was giving us the real facts about a possible state wide smart meter rollout ( TT HERE ).
Well, with a new state government a smart meter rollout is a step closer with the issuing of a draft of the state’s energy strategy: Restoring Tasmania’s Energy Advantage. Tasmanians have until February 15 to comment on this draft. See: http://www.stategrowth.tas.gov.au/energy/strategy
As stated in the Mercury on December 22, 2014 smart meters, electric vehicles and a second Basslink cable look set to be part of Tasmania’s energy future. Energy Minister Matthew Groom said in the Mercury article that the aim was to drive down the cost of electricity prices for all Tasmanians. He saw the introduction of a smart grid would ensure that Tasmania would have the lowest sustainable power prices.
However, many of the positive claims made in the draft paper do not match up well with reality, especially if we look at the smart grid rollout in Victoria and elsewhere.
According to an article in The Herald Sun on December 13, 2014: Bill Shock: Smart meter charges set to cost most Victorians more in 2015, Victorians will be slugged smart meter fees of up to $226 annually. According to the article, the Victorian rollout could add up to $50 million more to the cost of the project. In addition the full smart meter bill for homes and small businesses could exceed $2.4 billion, once inflation and the GST is factored in. See: http://www.heraldsun.com.au/news/victoria/bill-shock-smart-meter-charges-set-to-cost-most-victorians-more-in-2015/story-fni0fit3-1227154633835
Then from The Herald Sun again, on October 10, 2014 we have an article titled: Smart meter cost blowout threatens to add $520 to many power bills. See: http://www.heraldsun.com.au/news/victoria/smart-meter-cost-blowout-threatens-to-add-520-to-many-power-bills/story-fni0fit3-1227086897759
Also see ABC news, December 13, 2014: Victorian electricity users to pay increased charges for smart meter cost blow-out. http://www.abc.net.au/news/2014-12-13/victorian-electricity-users-to-pay-new-fee-for-smart-meter-cost/5965144
So, have the vested interests that have done a clever spruiking to the Tasmanian Government somehow solved this problem? Unlikely. For example, according to an investigation by Ontario’s auditor-general Bonnie Lysyk in December 2014, Ontario’s $2 billion smart meter program has failed to meet electricity conservation or cost-reduction goals and delivered few benefits at a hefty cost. She specifically criticised the province’s energy bureaucrats for plunging into the system without proper planning, and making it impossible for consumers to understand their rising hydro bills. Her findings included:
• Smart meters were supposed to cost $1 billion. In fact, the total cost will be double that amount.
• The energy ministry grossly over-estimated the benefits of the smart meter program.
• Energy bureaucrats have bamboozled consumers for years by hiding the true costs of energy in a catch-all fee called the “global adjustment” that now makes up the majority of the cost of energy.
• The initial cost-benefit estimate — which proved wildly inaccurate — was performed only after the energy board had approved its implementation plan.
• Costs continued to rise after the initial $1 billion estimate. They stood at $1.4 billion by the end of 2013, Lysyk reported.
• In addition, the Independent Electricity System Operator (IESO) — which operates the Ontario power grid minute by minute — spent $249 million on a provincial data centre to collect the torrent of information that flows out of smart meters. That cost is billed to ratepayers.
For more on the auditor-general report see: http://www.thestar.com/business/2014/12/09/smart_meters_have_few_benefits_for_big_costs_ag_report.html#
There were also concerns expressed in the Victorian Auditor General’s 2009 report on the rollout of smart meters in that state. To quote:
“There has been insufficient analysis to fully understand potential perverse outcomes, risks, and unintended consequences for consumers. This means that there is no clarity whether the distribution of costs and benefits between electricity businesses and consumers will be consistent with the intended outcomes of the program, and equitably allocated through the mandated cost recovery regime. Subsequent events in Victoria prove his concern was justified.
One of the other changes obliquely mentioned in the Tasmanian draft energy paper is a move away from a fixed price per kilowatt/hour to real-time pricing whereby the price of power changes on an hour-to-hour basis. depending on overall power demand. In other words during those hot summer days when you have the air conditioner on, it will cost more. According to the theory, higher prices will encourage consumers to change their daily energy use habits to use their appliances during lower pricing times, thereby saving money. This is a problem as research indicates that most consumers are unlikely to be able to shift their energy usage times and do their washing, cooking, watching TV or using their air-conditioner at 2am! Therefore for most consumers their electricity bills will increase unless they are insomniacs.
One of the unstated reasons for the push for real-time pricing is the only way to really take advantage of it is to get rid of many of your old appliances, such as washing machines, dryers, air conditioners, etc. and purchase new smart appliances that can be programmed to automatically operate at low power pricing times. This would require an investment of several thousands of dollars to upgrade your home appliances - a fact not mentioned in the smart grid sales hype for real-time pricing. It’s worth noting that all the major appliance manufacturers are promoting the smart grid and real-time pricing. Its good for encouraging a market for their new range of smart appliances.
I concluded with two questions in my September 2013 Tasmanian Times article( HERE ). . They are still unanswered:
“So, what is the future for a smart grid in Tasmania,? Will our state govt. repeat some of the mistakes encountered by Victoria or will it take advantage of hard lessons learned and make truly smart decisions for Tasmania’s energy future?”
Perhaps Aldous Huxley had a point when he wrote in Ends and Means: “Technological progress has merely provided us with more efficient means for going backwards.”
Highly recommended here is an article in the science and technical publication, Issues in Science and Technology: titled: The Energy-Climate Complex: The Smart Grid: Separating Perception from Reality, it is a must-read for anyone who also reads the Tasmanian draft paper. See: http://issues.org/27-3/makovich/
For anyone interested in reading and perhaps sending in a submission to the Tasmanian Government’s Department of State Growth on their energy policy strategy see: : http://www.stategrowth.tas.gov.au/energy/strategy
Also see the Stop Smart Meters Tasmania website for further information and a template letter for submissions to the govt. for readers who would like to send in their thoughts on the state’s energy strategy draft policy.
Don Maisch PhD, been involved in telecommunications standard setting since the early 1990s and was a member of the Standards Australia Committee setting exposure standards for electromagnetic fields. His PhD thesis examined industry influence and bias in telecommunications health risk assessment. He has recently written a book chapter on industry influence in Australian expert science committees which is due for publication in June 2015. Besides also writing about shortcomings with planned smart grids networks in Australia (see: http://www.emfacts.com/papers/ ) he is currently working on a thesis examining draconian U. S. tax laws that have been accepted in an IGA by the Abbott government and how they affect the financial future of expat Americans lining in Australia.