Possible Macquarie involvement in smart meter rollout
As a smart meter rollout across NSW becomes more likely, despite concerns over cost and lack of household benefits, the Macquarie Group announced its stand, and possible stake, on the issue. The Australian Energy Markets Commission recently brought up the possibility of having control of the smart meters taken away from power distributors.
Taking AEMC’s lead, the Macquarie Group announced that smart meters should be in the hands of electricity retailers. This means that retailers such as AGL, EnergyAustralia, and Origin Energy will be tasked in running the rollouts instead of Ausgrid and Endeavour Energy, Citipower, and other distributors.
Through their Corporate and Asset Finance Group, Macquarie further clarified their stand in a submission to the Productivity Commission dated 23 Nov 2012. This was in response to the PC’s inquiry on the regulatory frameworks of the electricity network. Involved in the metering market in the UK since 2002, Macquarie currently has a combined portfolio of 6 million traditional and smart meters for electricity and gas.
Citing experience in the UK market, the company states that the chances of consumers having the most benefits and choice will be greater if smart meters will be under energy retailers. Macquarie claims that a distributor-led rollout will involve increased regulation, complicated benchmarking, and lesser chances of consumers to reap the technology’s benefits. It cited the Victoria rollout as an example that distributors, by nature of their business, are less equipped to be end-consumer orientated or fast adopters of new technologies. In Victoria, where the rollout is underway, the cost has ballooned to more than $2.3 billion from the initial estimate of just $800 million.
Whereas, a retailer-led rollout will be most likely to provide the best service to consumers as they are in a better position to assess and manage the risks a smart meter rollout will entail due to their experience in direct interaction with energy consumers.
Image credit: Edmund Tse