CASE STUDY: COUNTRY ENERGY

CHAPTER 1 ENHANCED STRATEGIES

An Australian Approach to Energy

Innovation and Collaboration
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J
ust as global demand for energy is
steadily increasing, so too, are the
recognized costs of power genera-
tion. A recent report about the possibility
of creating a low-emissions future by Aus-
tralia’s Treasury noted that electricity pro-
duction currently accounts for 34 percent
of the nation’s net greenhouse gas emis-
sions, and that it was the fastest-growing
contributor to greenhouse gas emissions
over the period from 1990 to 2006 [1].
This growing realization of the true
cost of energy production will be brought
into stark relief, with the likely implemen-
tation of a national emissions trading
scheme in 2010.
Australia’s energy producers are enter-
ing an era of great change, with increasing
pressure to drive efficiencies in both the
supply and demand sides of their busi-
try in transformation, and to build new
capabilities; and
• To act with speed in terms of driving
leadership, setting the agenda, manag-
ing change and leveraging experience
– all while managing risk.
The net effect of the various government
initiatives and mandates around energy
production is to drive energy and utility
companies to deliver power more respon-
sibly and efficiently. The most obvious
evidence of this reaction is the develop-
ment of advanced metering infrastructure
(AMI) and intelligent network (IN) programs
across Australia. Yet a more fundamen-
tal change is also starting to emerge — a
change that is leading companies to work
more openly and collaboratively toward a
smarter energy value chain.
• Empower consumers and improve their
satisfaction by providing them with near
real-time, detailed information about
their energy usage; and
• Reduce greenhouse gas emissions to
meet or exceed environmental regula-
tory requirements while maintaining a
sufficient, cost-effective power supply.
a Global Issue
In Australia, Country Energy, a leading
essential services corporation owned by
the New South Wales Government, is lead-
ing the move to change not just its own
organization, but the entire electricity
supply industry.
With the strength of around 4,000
employees, and Australia’s largest power
supply network covering 95 percent of
New South Wales’ landmass, Country

Australia’s energy producers are entering an era of great change, with increasing pressure
to drive efficiencies in both the supply and demand sides of their businesses.

nesses. These pressures manifest them- This renewed sense of purpose gives Energy recognized the scale and scope of
selves in the operation of energy and utili- energy and utilities organizations an oppor- this industry challenge meant no single
ties organizations in three basic needs: tunity to think and act in dynamic new ways player could find all the answers by him-
• To tighten the focus on delivering value, as they re-engineer their operations to: self.
within the paradigm of achieving more • Transform the grid from a rigid, analog
with less, and while concentrating on system to a responsive and automated A Powerful Alliance
their core business; energy delivery system by driving oper- Formed by IBM, the Global Intelligent
• To exploit the opportunities of an indus- ational excellence; Utilities Network (IUN) Coalition repre-
sents a focused and collaborative effort
WRITTEN BY to address the many economic, social and
environmental pressures facing these
Neil Cherry — IBM, Ben Hamilton — Country Energy organizations as they shape, acceler-
ate and share in the development of the
Neil Cherry is a partner in IBM Global Business Services Australia who works with clients in energy utilities smart grid. Counting just one representa-
and telecommunications, including Country Energy. tive organization from each major urban
Ben Hamilton is Country Energy’s general manager for corporate and business strategy, responsible for electricity market, the coalition will col-
corporate planning and reporting, commercial development, sustainability and IT strategy. laborate to enable the rapid development

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CASE STUDY: COUNTRY ENERGY
CHAPTER 1 ENHANCED STRATEGIES

of solutions, adoption of open industry-

based standards, and creation of informed
policy and regulation.
Not only does the coalition believe
these three streams of collaboration will
help drive the adoption of the IUN, or
smart grid, in markets across the planet,
but the sharing of best practice informa-
tion and creation of a unified direction for
the industry will help reduce regulatory,
financial, market and implementation
risks. And, like all productive collaborative
relationships, the rewards for individual
members are likely to become amplified as
the group grows, learns and shares.

Global Coalition, Local

Results
As Australia’s only member of the coali-
tion, Country Energy has been quick to
capitalize on — and contribute to — the
benefits of the global knowledge base,
adapting the learnings from overseas
operators in both developed and emerging
markets, and applying them to the unique
challenges of a huge landmass with a
decentralized population.
From its base in a nation rich in natural
resources, the Australian energy and utili-
ties industry is quickly moving to adapt to
the emergence of a carbon economy.
One of Country Energy’s key projects in
this realm is the development of its own
Intelligent Network (IN), providing the
platform for developing its future network
strategy, incorporating distributed gener-
ation and storage, as well as enabling con-
sumer interaction through the provision of
real-time information on energy consump-
tion, cost and greenhouse footprint.

Community Collaboration
Keen to understand how the IN will work
for customers and its own employees,
Country Energy is moving the smart grid
off the page and into real life.
Designed to demonstrate, measure and
evaluate the technical and commercial
viability of IN initiatives, two communities
have been identified by Country Energy,
with the primary goal of learning from
both the suitability of the solutions imple-
mented and the operational partnership
models by which they will be delivered.
These two IN communities are intended
to provide a live research environment
to evaluate current understandings and
technologies, and will include functionality
across nine areas, including smart meters,
electrical network monitoring and control,
and consumer interaction and response.
Demonstrating the Future
In preparing to put the digital age to
work, and to practically demonstrate to
stakeholders what an IN will deliver, Coun-
try Energy has developed Australia’s first
comprehensive IN Research and Demon-
stration Centre near Canberra.
This interactive centre shows what

Shaping a New Era in Energy

the power network of the not-too-dis-
tant future will look like and how it will
change the way power is delivered, man-
aged and used.
The centre includes a residential set-
ting to demonstrate the “smart home of
the future,” while giving visitors a preview
of an energy network that automati-
cally detects where a power interruption
occurs, providing up-to-date information
to network operators and field crews.
An initiative as far-reaching as the IN will
rely on human understanding as much as it
does on technology and infrastructure.
Regional Delivery Model
In addition to the coalition, IBM and
Country Energy developed and imple-
mented an innovative new business model
to transform Country Energy’s application
development and support capability. In
2008, Country Energy signed a four-
year agreement with IBM to establish a
regional development centre, located in
the city of Bathurst.
The centre is designed to help maximize
cost efficiencies, accelerate the pace of
skills transfer through close links with the
local higher-education facility, Charles
Sturt University, and support Country
Energy’s application needs as it moves
forward on its IN journey. The centre is also
providing services to other IBM clients.
Through the centre, Country Energy
aims to improve service levels and innova-
tions delivered to its business via skills
transfer. The outcome also allows Country
Energy to meet its commitment to support
regional areas and offers a viable alterna-
tive to global delivery models.
Looking to the Future
In many ways, the energy and utilities
industry has come to symbolize the cross-
roads that many of the planet’s systems
find themselves at this moment in time:
legacy systems are operating in an eco-
nomic and environmental ecosystem that
is simply unable to sustain current levels —
let alone, the projected demands of global
growth.
Yet help is at hand, infusing these sys-
tems with the instrumentation to extract
real-time data from every point in the
value chain, interconnecting these points
to allow the constant, back-and-forward
flow of information, and finally, employing
the power of analytics to give these sys-
tems the gift of intelligence.
In real terms, IBM and Country Energy
are harnessing the depth of knowledge
and expertise of the Global IUN Coalition,
collaborating to help change the way the
industry operates at a fundamental level
in order to create an IN. This new smart
grid will operate as an automated energy
delivery system, empowering consumers
and improving their satisfaction by pro-
viding them with near real-time, detailed
information about their energy usage.
And for the planet that these consum-
ers — and billions of others — rely upon,
Country Energy’s efforts will help reduce
greenhouse gas emissions while main-
taining that most basic building block of
human development: safe, dependable,
available and cost-effective power. n
Reference
1 Commonwealth of Australia. Common-
wealth Treasury. Australia’s Low Pollu-
tion Future: The Economics of Climate
Change Mitigation. 30 October 2008.
Author’s Note: This customer story is based
on information provided by Country Energy
and illustrates how one organization uses IBM
products. Many factors have contributed to
the results and benefits described. IBM does
not guarantee comparable results elsewhere.
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