Smart Meters
Smart meters are electricity meters that are capable both of measuring and recording energy consumption in short intervals, and of two-way communication, enabling energy providers to read and control features of the meter remotely. Functions that could be controlled remotely include connecting and disconnecting a customer's electricity supply, and loads such as off peak water heating and air conditioners which can be controlled without inconveniencing the consumer.
Smart meters will empower consumers, creating opportunities for more information, control and choice in managing their energy bills. For electricity businesses they create more efficient ways to operate the market and networks, and in doing so reduce the costs of supplying electricity. Smart meters will create opportunities for new services, such as demand management services, and in-home displays showing energy consumption and other information.
In April 2007 the Council of Australian Governments (COAG) committed to a national mandated roll-out 
[PDF, 26KB] of electricity smart meters to areas where benefits outweigh costs, as indicated by the results of the cost-benefit analysis which will take account of different market circumstances in each state and territory and the circumstances of different groups of consumers. COAG referred work on smart meters to the Ministerial Council on Energy (MCE).
In December 2007 MCE supported a national minimum functionality for smart meters [PDF, 59KB], with an initial list of functions to be further defined by an industry-led technical group (the National Stakeholder Steering Committee).
The Cost Benefit Analysis was completed early in 2008.
In June 2008 MCE committed to development of a consistent national framework for smart metering in the National Electricity Market, supporting distributors to be responsible for the accelerated roll-out of smart meters. There are still some uncertainties about the costs and benefits of smart meters in some jurisdictions and a staged approach is being taken to the further development of smart meters. Smart meters are to be rolled out in Victoria and NSW, with over 5 million smart meters expected to be deployed before 2017. Queensland and some other states and territories will undertake extensive pilots and business cases prior to a further national review of deployment timelines in 2012.
In December 2007, MCE noted that detailed technical requirements including performance and service levels for smart metering should be further developed by stakeholders. To that end, a National Stakeholder Steering Committee and issue-specific Working Groups have been formed and will provide advice to MCE on technical and operational aspects of the national framework, including standards for the Home Area Network, coordinate pilots and facilitate information sharing.
The Department has a lead role in smart meter policy as Chair of the Smart Meters Working Group, and has coordinated the national cost benefit analysis, stakeholder forums, and the establishment of the National Stakeholder Steering Committee.
Demand Management
Demand management refers to strategies aimed at reducing energy demand, especially peak demand for grid-delivered energy, or changing energy use patterns to encourage a demand response to price or other signals.
Examples of demand management include direct load control, time of use pricing, operational efficiencies and alternative sources of supply, such as distributed generation or fuel switching. Direct load control includes the cycling of air conditioners and the control of off peak hot water systems by the utility.
Demand management may be employed by network operators to relieve network constraints or delay augmentation, by retailers to reduce their exposure to peak price periods (with a consequent impact on generation investment signals), and by consumers to reduce their energy bills, or for environmental reasons.
The Ministerial Council on Energy is considering reforms to remove inappropriate barriers to efficient demand management [PDF, 40KB] by electricity businesses, particularly network businesses. The consideration of the network incentives has been done in the context of transferring the regulation of distribution businesses to a national framework [PDF, 37KB] from jurisdictional based regulation. This work aims to remove barriers to demand management and distributed generation.