The Australian government will be releasing an energy white paper on Thursday that could make the country a hotbed of smart grid activity.

Some parts of Australia already have deregulated electricity markets, but that could go even further. Smart meters, which are already mandated in the state of Victoria, could be expanded into a federal mandate.

Meter support comes not only from energy minister Martin Ferguson, but also from opposition energy spokesman Ian Macfarlane, according to the Brisbane Times.

Meters will allow customers to be charged peak-time pricing. One study found that some customers subsidized the heaviest peak energy users by up to $330 a year.

"This is clearly an unfair cost, particularly on those less able to afford it," Ferguson said, according to The West Australian.

The paper notes that electricity prices have risen 40 percent in the last three years and that investment is sorely needed to replace the aging grid, meet reliability standards and cut peak demand.

Beyond smart metering, the paper also covered generation issues. Australia is rich in many fuels, from sunlight to natural gas. The government sees a move toward gas-fired generation, as carbon trading is expanding, and also because gas-fired generation is a better complement to wind and other renewables.

The scale of the needed investment is huge -- an estimated $240 billion by 2030 -- to meet the goals outlined in the paper, including $100 billion for renewables. “The need for new investment and rising costs of production mean that the era of cheap energy is over,” the draft paper stated.

One way to mitigate the costs will be deregulation. While Victoria is fully deregulated, other states -- including New South Wales, where Sydney sits -- are not.

The energy white paper, which hadn’t been updated since 2004, calls for various critical reforms, including:

  • Privatizing government-owned energy assets
  • Fully deregulating retail energy prices where effective competition exists
  • Implementing an improved demand-side energy framework to reduce peak-demand growth
  • Transitioning to truly national energy markets 

Australia is hardly starting from zero when it comes to integrating more renewables and deregulating energy. Victoria’s active electricity market has a customer churn of close to 30 percent. There is a robust residentialsolarmarket and a growing utility-scale solar market.

When it comes to efficiency, Australians, like Europeans, are naturally more inclined toward energy savings and environmental issues than their American counterparts. In the past few years, energy consumption has actually been dropping in Australia. Some say it is because of a few mild winters and summers, but other think that rooftop solar efficiency schemes paid for by carbon trading are starting to pay off. Even with the reduction, critical peaks are still rising during summer, which is just starting Down Under.

The government has already set a 20 percent renewable energy target for 2020; Australia could quickly become one of the most interesting markets for energy services from deregulated utilities.

While Australia’s government wants to create a robust energy future by 2030 that will serve its own nation, it is also well aware that it sits in the Asia-Pacific region, and by being on the forefront of energy investment, the government also hopes to continue its increasing energy exports to Asia, which now stand at about $69 billion annually.

The white paper is not the final word, however. It will be the basis for negotiations between the states and the federal government, which start next month.