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Innovation through Partnering and Collaboration
August 2016
Alistair Parker, Executive General Manager – Regulated Energy Services
Overview
2
• Why is collaboration and partnering important in the new energy
ecosystem?
• What new opportunities are created through collaboration?
• How are these working in practice?
• How can we best maximise collaboration going forward?
About AusNet Services
3
100% own, operate and control critical energy delivery infrastructure in Victoria
* All figures are approximate as at 31 March 2016
Electricity Transmission
6,709km of transmission
lines
13,000 towers
Electricity distribution
51,483km of electricity
distribution network
691,378 customers
Gas distribution
10,832km of gas
distribution network
660,924 customers
Today’s Energy Market Structure
4
Competitive
Generation /
ProductionTransmission Distribution Retail
Regulated
Monopoly
Regulated
MonopoliesCompetitiveCompetitive
CompetitiveRegulated
MonopoliesRegulated/
Contracted
Electricity
Market
Gas Market
Tomorrow’s Structure? Significant uncertainty
5
Competitive
Generation /
ProductionTransmission Distribution Retail
Semi-regulated,
contracted?
Semi –
monopoly?CompetitiveCompetitive
CompetitiveUnregulated
Fuel of Choice?Regulated/
Contracted
Electricity
Market
Gas Market
Blurring
of line
Surve
ys
&
Intervi
ews
Focus
group
s
Forums
&
Worksh
opsFocus
group
s
Transformation trends
Electricity sector undergoing exciting and unprecedented change
Uncertainty is high but trends are evident and are inter-related
30 August 2016 6
Shift to decentralised energy
Shift to low carbon energy sources
Customers moving from literacy to empowerment
Digital platforms & big data analytics
Context and Motivation
7
Digitisation
& Data
Alternativ
e network
platforms
Evolving
Regulatory
Framework
New
Markets
Distributed
Energy
Resources
Internet
of Things
Active
Customers
New
Business
Models
Cultural
Reformation(Energy Supply
Industry)
Need to be
Adaptive &
Inclusive
Opportunities
8
Ability to influence and
shape new product
development
Increased stakeholder
engagement and
participation
Explore alternative
energy solutions and
technology platforms
Apply learnings and
innovation from other
business sectors
Realise increased value for
investments in new energy
resources
Exploit latent benefits of
new data sources and
advanced analytics
Improving productivity
and efficiency
Building customer
trust
Case Study – Smart Meter Data AnalyticsTransforming Asset Management Practices
9
Base AMI Capability
Co-develop enriched functionality(with MMS providers)
Collaborate with other (incl. non-energy) service
providers to provide tools and capabilities (grid-computing, optimisation, visualisation etc.)
Operationalise with a view to
establishing service capability
within the marketplace(multi-segment)
LV network
topology
reconstruction (per phase)
LV network and
asset operational
monitoring
Referred HV
network and asset
operational
monitoring
SCADA Historian Data
5min PQ Data from AMI
Case Study – HV Distribution Network Technology Development
10
New Network or
Asset
Requirement
No Suitable
Market
Products
Leverage Internal IP to
“Develop” Required
Functionality (theory)
Market/Supplier
Engagement
Product Development
& Testing
Collaboration
New/Refined
Product Market
Offering
Industry
Application
Leveraging Specialist Industry
Skills & IP to produce a Market
Place Harvest (which in turn motivates
further capability development)
Emerging Case Study – Remote Area Power Systems
RAPS can cost less than
50% of asset
replacement in some
situations
Who should own these
assets?
How best to engage with
regional communities?
Can competition deliver
in remote areas?
Cross subsidy issues
11
Regulation & policy: enabler or blocker?
30 August 2016 12
Project funding
Customer incentives
Supporting infra-
structure
Price signals
Network regulation
Business models & markets
Aus: Clean Energy Finance Corp
Aus: Australian Renewable Energy Agency
Vic: New Energy Jobs Fund
Aus: Renewable Energy Target
Vic ESC: Feed-in tariffs
Vic: Energy Efficiency Target
Vic: Advanced Metering Infrastructure
AEMC: Competitive Metering
Framework
AER: Regulatory Investment Test
for distribution
AER: Demand Management
Innovation Scheme
AER: Ring fencing guideline
AER: Cost reflective network
pricing
Vic: Flexible pricing?
AER: Exempt seller framework
AEMC: Demand Response
Mechanism
Ring Fencing: protector or hand-brake?
13
From where we are today, what is the greater threat:
1. Networks crushing competitive markets? or
2. Regulation crushing collaboration and innovation?
Or put another way – are we regulating for the future or the past?
Overall, it appears the Draft Guideline intends
to preserve the prevailing strict structural
separation of generation, network and retail
sectors of the Australian electricity supply
chain, notwithstanding major market-driven
changes that are challenging the underlying
policy rationale for this separation.
Euan Morton, Synergies Economic Consulting
Ring Fencing: innovation landscape
14
AER’s view A better way
forward
Regulated
Networks
Alterna
tive
networ
k
platfor
ms
Data
experts
Technology
platformsComms
Providers
Retailers
InnovationMarketing
Know how
Regulated
Networks
Alterna
tive
networ
k
platfor
ms
Data
experts
Technology
platformsComms
Providers
Retailers
InnovationMarketing
Know how
Strict Ring Fence
Key Learnings
15
• No one player has all the answers. In the new digital and energy world,
collaboration and synergistic operation is essential to maximise benefits.
• Partnering and cross-industry collaboration doesn’t come naturally to
energy networks businesses – we have to work at it!
• There is an increasing need to be innovative, nimble and adaptable
• There is a real risk that heavy-handed regulation will restrict the ability of
network expertise to participate in innovative collaborations
• We must always remember the customer is at the heart of this
