Austrian power generation and distribution systems are among the most reliable and environmentally friendly in the world. In 2010, Austria produced 71,075 GWh of electricity and imported another 19,898 GWh for a gross of 90,972 GWh, up 4.5% over 2009. Of the electricity produced domestically, over 78% is from renewable resources, primarily hydro power. With 5.8 million electricity delivery points and a 248,198 km long grid, Austria reports a total of 31 minutes of unplanned electricity outages in 2010.
Though there is a business case to be made for smart grids, it is not as strong as in the United States, as Austrian meters are read less often and Austrian utilities are not vertically integrated. The stronger case for smart grids is a political one, as a way of moderating consumer behavior and improving the value of distributed/renewable power sources.
Market opportunities in Austria are largely the result of a regulation passed in April, 2012, which requires that 95% of all household and small commercial customers have a smart meter by 2019. In addition to the meters themselves, there is a market for associated software that ties real-time metering to monitoring, distribution, and billing systems. Another segment that is expected to become popular is home automation.
The Business Case for Smart Grids
The Austrian business case for smart grids is more complex than in other markets, such as the United States, for several reasons. First, the utilities here are unbundled – they are split into production, distribution, and sales organizations, each with its own balance sheet and each with a different relationship to a smart grid. Thus the first questions that arise are: which of these independent entities would carry the cost of installing the elements of the grid, or how would costs be shared?
Each of the three types of entity does benefit from a smart grid, but the benefits (and the costs) are not equal. The most important benefits of a smart grid for grid operators are the ability to better manage power demand, integrate renewable into the energy mix, and reduce the meter-reading workforce. Power producers benefit from the ability to take better advantage of demand response, for example, exploiting low same-day electricity prices. Energy sales and marketing companies can score with a modern image, nifty home monitoring gadgets and potential energy bill savings.
Another important factor in the business case for adopting a smarter grid is the relative infrequency of meter reading. Household meters here are read once a year and the result divided into 12 monthly payments for the following year, thus the savings to a utility represented by real time metering is much less than would be saved if meters were read on a monthly basis.
Other factors that weaken the business case for smart grids include 1) There are no electricity price tiers that would enable electricity providers to incentivize electricity use at non-peak hours. Furthermore, energy prices here, as everywhere, are politically sensitive. Incentivizing pricing is politically difficult. 2) There are no incentives for utilities to reduce their electricity sales. Each kilowatt unsold is that much revenue lost for an Austrian electricity provider. 3) Many multi-family homes have a single meter that measures the use of the entire building, a charge that is then split according to the size of the living space of each resident; obviously that situation eliminates any incentive for an individual or household to reduce energy use.
Balancing out this complex and relatively weak business case is the Austrian government’s desire to reduce carbon emissions, which has led to a strong legislative move requiring the installation of smart meters as a first step in creating a smart grid. The hope is that, once people have a real-time picture of their energy use, they will modify their behavior to save energy and money. A secondary benefit from smart grid technology is seen as improving the value of distributed energy sources such as solar panels by enabling sales back into the grid. Of course, the jury is still out on the true value of a smart grid as a tool to save energy.