ESCOs, iGrid, and the Regulator.

The “intelligent Grid” is more likely an evolutionary process rather than a centrally designed, administered, and controlled collection of technologies that “runs energy”. I think it will be driven by ESCOS, starting in the industrial and commercial area (it has already begun), migrating down through building managers to aggregated domestic, and up through large users to generators, mixing in renewables as it goes. It is underway. It will not be influenced either way by the presence or absence of smart meters.

However Regulation is another thing. It can be stopped by our current regulatory environment. Australia has a lot of unnecessary and simply restrictive regulation that is clogging up the market, effectively preventing a meaningful demand side, and generally getting in the way of efficiencies. The Australian market is derived from the UK, but has simply failed to keep up with reforms in the UK that have seen these restrictions swept away.

Reform requires policy change; in Australia that means COAG. The Regulator is charged with executing policy, which is does very well. It is also responsible for providing the most credible advice to – let’s face it – a less than technically brilliant group of bureaucrats and politicians. Constructive proposals made by competant bodies have simply been ignored, along with reforms in other places. It is time for the Regulator to play its proper role in industry reform.

The future for ESCOs is bright: ESCOs currently servicing the commercial and industrial sector can address the domestic sector through networking and the aggregation of fewer than 100 dwellings. If electric vehicals become widely used the opportunities are enormous.

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