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5.2 Smart networks to link demand and supply

Background: Applied to electric power, a ‘smart grid’ uses information and communication technology (ICT), together with sophisticated instrumentation and power control devices, to improve the efficiency of electricity use, distribution, transmission and generation. A $100 million commercial trial of a smart urban electricity grid has recently commenced under the federal government’s ‘Smart Grid, Smart City’ program. Based in Newcastle, the trial will identify and correct faults; manage voltage levels and fluctuations; optimise load sharing, including a small fleet of electric cars and battery storage installations; integrate variable renewable energy from wind and solar power generation; and provide customers with real-time energy costs to encourage
user-load management.

Similar concepts can also be applied to gas and water to bundle power, gas and water supply and management into integrated ‘smart networks’. The goals of these networks are to optimise overall system performance, to recover from outages and, importantly, to empower users to respond to readily accessible information. Smart network technologies and systems can reduce GHG emissions, increase reliability of supply, maximise energy, gas and water delivery efficiency, and provide higher levels of user choice and flexibility. These networks could eventually extend right across the delivery spectrum, from the extraction or collection of the resource, through the chain of processing and distribution at the highest possible efficiency, to its eventual use and recycling. All of this would be enabled by taking advantage of leading-edge ICT systems.

Smart networks also have applications in irrigation systems and can be used to improve the energy efficiency of water supply. They could also be utilised to reduce river operating losses of water and to maximise economic water productivity. To improve economic water productivity, it is important to supply water to irrigated crops at the right time and in the right quantities for the particular growth stage of the crop. This could be achieved with wireless sensor networks that connect soil, atmospheric and plant sensors to smart control systems to control irrigation water delivery. Early research being undertaken by the University of Melbourne indicates that this technology can achieve on-field improvements in economic water productivity of 25 to 75 per cent. Smart network technology can also improve the efficiency of the water distribution network by ensuring stable pressures in piped systems or appropriate water levels in channel systems. For this purpose, smart networks have been implemented in the Colleambally Irrigation District in NSW and are being implemented in the Goulburn–Murray Irrigation District as part of the $1 billion Food Bowl Modernisation Project in northern Victoria. While recovering water losses was the initial driver of these investments, the major benefit will be improved economic water productivity.

In both the urban and irrigation domains, smart networks will optimise network efficiency and effectiveness, and encourage social and behavioural adaptation in energy and water consumption.

Recommendation 2

The Expert Working Group recommends (1) the design, testing and assessment of smart networks for electricity, gas and water, through a research and implementation program leading to commercial demonstration; and (2) the application of smart network technology to improve distribution efficiency and water productivity in irrigation.

Outcomes in the urban domain: Integrated smart networks for electricity, gas and water offer the following main outcomes:

  • Integration of renewable stationary energy sources into grids: Smart network technology can optimise the integration of intermittent and distributed renewable energy sources, such as solar and wind, into existing electricity networks.

  • More effective management of fluid distribution systems: Improved pressure management in urban water and gas supply networks can lead to more efficient use of energy for pumping, reduced leakage and extended life of distribution pipes.

  • Facilitation of behavioural change: Smart networks can provide consumers, suppliers and planners with direct, real-time information on usage rates and costs of energy, water and associated carbon emissions. This will empower users to see and respond to energy, water and other costs, providing them with opportunities to exert more informed control over their own usage. Evaluation of the social and psychological aspects of customer responses will be essential.

  • More effective markets: development of market systems, together with smart networks, will allow real-time information to be conveyed to customers. This will assist in providing incentives at appropriate times.

  • Cost reductions by sharing of ICT infrastructure: There is potential to reduce costs by sharing ICT infrastructure between electricity, gas and water networks. This is particularly the case for metering and communication protocols.

While there are many smart grid trials being conducted around the world, preliminary exploration has indicated that there are no activities that combine electricity, gas and water in an integrated way. This combination is especially pertinent to Australia, given our need to reduce our GHG emissions from the power sector by the addition of more variable renewable energy sources, the increased availability of gas on the east coast through coal seam methane developments and our precarious long-term water supply situation. We also have an added degree of difficulty in that our supply networks tend to be long and narrow, reflecting our coastal population. Australia does not have the denser, compact supply grids of most other developed countries. All these characteristics provide incentives for Australia to become a world leader in the development of smart networks.

Outcomes in the irrigation domain: It is now possible to connect farm irrigation operations, channel and pipe networks, and river operating systems to create a complete smart water supply chain from the water source to the crop. Such smart water supply chains can lead to the following outcomes:

  • Improved energy efficiency of the water distribution network: This is achieved by ensuring stable pressures in piped systems and appropriate water levels in channel systems.

  • Reduction in river operating losses of water: This is achieved through more accurate forecasts of demand and more responsive operation of the reservoir releases.

  • Improved economic water productivity: This is achieved by supplying water to irrigated crops at the right times and in the right quantities for optimum growth.

Various pieces of a smart water supply chain have been implemented (see examples above), but the full potential cannot be realised until the complete smart water supply chain is implemented from the source to the crop.

Steps to implementation in the urban domain: Implementation of this proposal can begin with a pre-deployment study. This would involve an extension of the existing ‘Smart Grid, Smart City’ trial program for a smart electricity network to include gas and water in parallel. Such a pre-deployment study was very successful in the design of the Smart Grid program. The recommended study would involve government, industry and researchers, including both physical and social-science disciplines. The outcome of the study would be an examination of the benefits, both engineering and behavioural, of combined smart networks for electricity, gas and water. If the study shows significant benefits, gas and water can either be added to the existing Smart Grid program for electricity, or run parallel to it with cross-flow of information and outcomes.

Steps to implementation in the irrigation domain: A demonstration project in a selected set of irrigation systems would be a sound investment. Given that on-farm systems are an important link in the supply chain, funds could be sourced from the $5 billion committed to on-farm water efficiency in the Water for the Future Initiative.

5.3 Resilient landscapes

Background: The challenges facing rural Australia over coming decades include production of significantly more food with less water, contribution to reductions in GHG emissions and restoration of stressed land and river ecosystems. These challenges require an integrative approach, because all of them constitute intersection points between energy, water and carbon, together with landscape productivity and ecosystem health.

Requirements for integration arise both within and between many activities and functions. These include (1) food and fibre production; (2) bioenergy production; (3) soil carbon sequestration; (4) carbon sequestration through forestry; (5) management of water availability and runoff (especially in the presence of water demand from forests and crops); (6) ecosystem health; (7) exploration of alternative production technologies, such as algal biofuels; and (8) rural social development leading to healthy socio-ecological systems. Energy-water-carbon intersections appear directly in the first five of these activities and functions, and indirectly, but significantly, in the other three.

A framework for shaping a response to these challenges is provided by the concept of resilience (see Section 3.2): the ability to recover from disturbances and shocks, the ability to adapt to change through learning and the ability to undergo transformation when necessary.

Recommendation 3

The Expert Working Group recommends a national Resilient Landscapes Initiative, to support the evolution of land systems as resilient producers, watersheds, carbon storages, ecosystems and societies. The initiative will assist communities to resolve tensions and take advantage of emerging opportunities presented by these diverse roles, in the context of the transformational changes demanded by environmental constraints. The initiative will operate through a diverse set of regional projects.

Outcomes: This initiative seeks to develop an integrative, resilience-based approach to challenges at the intersections of energy, water, carbon, productivity, and environmental, economic and social health in Australian landscapes. Outcomes include:

  • Development of bioenergy and food systems which complement one another, support healthy ecosystems, and are sustainable and commercially viable as carbon, water and energy markets evolve.

  • Engagement with both market-based and non-market-based measures for sharing finite resources (complementing Recommendation 1).

  • Soil carbon sequestration strategies which sustain soil fertility and nutrients while conserving water and energy.

  • Evaluation and resolution of tensions between water availability, ecosystem health and carbon sequestration.

  • Exploration of alternative production technologies, such as a shift from land-based bioenergy crops to aquatic bioenergy production with algae.

  • Full water and GHG accounting for both managed and natural landscapes.

  • Rural social development leading to healthy socio-ecological systems.

Steps to implementation: This is a long-term, transformational initiative involving staged implementation over many years, probably decades. Structurally, its core is envisaged as a set of regional projects, large enough in number to represent the diversity of Australian landscapes, rural industries and social systems, and to provide opportunities for learning and diffusion of successful strategies between projects. A model for the application of resilience concepts in this way is provided by work in the Goulburn–Broken catchment in Victoria (Walker et al 2009). These demonstration projects will be aimed not only at transformations within their focal regions, but also at subsequent diffusion of ideas and approaches to other regions.

Steps to implement this vision may include four elements:

  • An initial development and scoping study, involving key stakeholders from governments, industry, community and the innovation system, centrally supported by a Commonwealth Government authority. This scoping step would be modestly funded for a period of around two years and would lead to a detailed plan including selection of focal regions and determination of specific regional goals.

  • Initial trials of goals and methods in a limited number of regions, to integrate the landscape activities and functions listed above in Background. These trials would ensure, through adaptation and learning, that goals and methods are appropriate, robust and capable of evolving to meet changing needs.

  • Extension to a wider set of focal regions, spanning the diversity of Australian landscapes, rural industries and social systems, and including ongoing evaluation, learning and adaptation.

  • Fostering of learning and diffusion of successful strategies, both between focal regions and throughout Australian landscapes and stakeholder communities.

The projects will utilise a variety of existing and developmental systems for water, carbon and other natural resource information in landscapes. The Expert Working Group notes a need for improved integration across these systems. This is addressed in Recommendation 5.

Success of the initiative will require a whole-of-government perspective, building on existing developments, farm sector linkages and basic research. Importantly, government-level involvement will be necessary at several levels:

  • This initiative will work to common national (Council of Australian Governments; COAG) principles, building on the work of the Natural Resource Management Ministerial Council and the Primary Industries Ministerial Council, established to better integrate Australia’s conservation and sustainable production objectives (

  • The initiative will also recognise the work of the Senate Standing Committee on Rural & Regional Affairs and Transport, which considered ‘the capacity for regional Natural Resource Management (NRM) groups, catchment management organisations and other national conservation networks to engage land managers, resource users and the wider community to deliver on-ground NRM outcomes’. The committee made recommendations for ‘long-term land care scale strategic planning and action’ (Senate Standing Committee on Rural & Regional Affairs and Transport, 2009).

  • Other national strategic activities addressing landscape resilience will also be recognised, including the work of Regional Development Australia (, established in 2008 as a partnership between the Australian, state and territory, and local governments to support the growth and development of Australia’s regions; and the work of the Rural Research and Development (R&D) Council, established by the Minister for Agriculture, Fisheries and Forestry in 2009 to develop a National Strategic Rural R&D Investment Plan (

In the environment formed by the programs listed above, the central offering of the initiative proposed here is an integrative perspective.

5.4 Resilient cities and towns

Background: Australians inhabit built environments from great cities to the Red Centre. Meeting the combined energy, water and carbon challenges in our cities and towns will require technological innovation for energy and water supply, the development of shock-resilient systems, astute investment in infrastructure, and reduction of demand for constrained natural resources (particularly water and GHG emissions). These developments need to occur together.

As for our recommendation on the corresponding issues in landscapes (see Section 5.3), the Expert Working Group advocates a resilience approach to these challenges.

Constraints on water availability and GHG emissions, together with population pressures, are generating new challenges for Australia’s built environments. For our economy to decarbonise over coming decades, urban environments will need to play a leading role because most Australians live there. This will require transformations in stationary energy supply (see Section 4.1) and transport (see Section 4.2), together with changes to promote energy conservation and efficiency (see Section 4.5). Urban water consumption needs to continue to decrease at least as rapidly as has been achieved over the last few decades (see Section 4.3), implying an even more rapid decrease in per capita household and industrial water consumption.

The Expert Working Group views a resilience approach (Walker et al, 2009; Folke et al, 2010) as providing an appropriate framework for addressing these challenges, as for landscapes (see Section 5.3). Underlying this approach are (1) the need for connected, transformational changes; (2) the need for local action; and (3) the importance of combining physical, engineering, economic, environmental and social perspectives in a complete view of urban systems.

Recommendation 4

The Expert Working Group recommends the development of a national Resilient Cities and Towns Initiative. This will foster resilient, low-emission energy systems, water systems and built environments by focusing jointly on technological developments in supply and on adaptation in demand as the Australian urban population grows. The initiative will operate through a set of regional demonstration projects. Commonwealth leadership is needed.

Outcomes: The aim of this initiative is to incubate the design of resilient energy, water, transport and related urban systems which meet human needs with minimum emissions and environmental impact, and enhance urban quality of life. These systems can achieve adequate energy and water supply through (1) the reshaping of energy and water supply; (2) recycling to use energy, water and carbon resources presently discarded as waste; and (3) efficiency, conservation and demand management measures. The initiative will engage with the economic, social and physical processes driving demand; capitalise on industrial and employment opportunities made available by sustainable technologies; and manage trade-offs in the decarbonisation of the energy economy.

Specific activities will focus on opportunities for enhancing urban sustainability at energy, water, carbon and related intersections, as detailed in Section 4.5:

  1. Planning regulations to reduce urban sprawl, create green space and improve transport options, including reform of revenue regimes.

  2. Building standards to maximise energy and water efficiency.

  3. Engineering and design of sustainable buildings to reduce energy consumption.

  4. Demand reduction by making information available to consumers through smart networks (see Recommendation 2) and education campaigns.

  5. Public transport and alternative transport options to increase access to affordable, safe and regular public transport.

  6. Integration of electric vehicle use with the electricity grid to manage the charging of electric vehicles and utilise them as sources of stored energy.

  7. Flexible work patterns to reduce transport congestion and ease demand for fossil-fuel-intensive peak stationary power.

  8. Urban design and layout to maximise access to non-motor transport and services, and increase the overall energy efficiency of urban living.

  9. Urban cooling with vegetation for local climate control and amenity.

  10. Recycling of energy and water to recover materials and energy from waste water, including turning waste organic carbon into energy as usable methane.

Major communities of interest include local governments of cities and towns, federal and state regulatory agencies, energy producers and retailers, energy innovators (for distributed renewable energy and technologies such as smart networks), the building industry, urban planners and architects, the education sector, community organisations representing special needs such as homelessness and aged care, and the research community, comprising the government, university and private sectors.

Steps to implementation: As for Recommendation 3, this is a long-term, transformational initiative involving staged implementation over many years. The demonstration projects at the core of the initiative would encompass the diversity of Australian urban environments from major cities to small towns, with links to technological developments such as smart networks and their extension to gas and water (see Recommendation 2).

Steps to implementation would be similar to the four elements outlined in Recommendation 3, starting with a scoping and evaluation process involving key stakeholders from governments, industry, community and the innovation system, centrally administered by a Commonwealth Government authority. This scoping process would not be the same as in Recommendation 3 because the stakeholders and options are significantly different, but it could be centrally supported by the same government structure.

This initiative would build upon several existing federal activities to focus on intersections between energy, water and carbon. Relevant activities include:

  • the Renewable Energy Futures Fund

  • the Prime Minister’s Task Group on Energy Efficiency

  • the ‘Smart Grid, Smart City’ program (see Recommendation 2)

  • national initiatives operating in individual sectors.

The initiative would also connect with a number of relevant international activities, including those listed in Table 4.2.

This initiative is significant in the overall framework being developed in this report in placing technical developments such as smart networks (see Recommendation 2) into a whole-system context, including people.

5.5 Enhanced knowledge and learning system

Background: All of the foregoing recommendations place high demands on new knowledge and innovation, particularly for integrative understanding of whole-system behaviours. There is a growing gap between the largely compartmentalised knowledge provided by our current innovation system and the kind of cross-disciplinary, cross-sectoral understanding that is needed to enable innovation across energy, water, carbon and related domains. We cannot manage what we do not understand, and we cannot manage what we do not measure.

Recommendation 5

The Expert Working Group recommends enhancing the development of integrative perspectives across the Australian knowledge system, by (1) establishing a core research effort in integrative systems analysis, to understand and map the connections between energy, water, carbon, climate, agriculture, ecosystems, the economy and society; (2) including incentives for integrative analysis in existing academic, government and sectoral innovation investment structures; and (3) enhancing support for stable, ongoing delivery of essential information.

Outcomes: Through both short-term and long-term actions, this recommendation will improve Australia’s ability to develop resilience through adaptation and learning. It will address the rapidly emerging need for integrative perspectives that can overcome the ongoing compartmentalisation of research funding and organisations into silos representing traditional disciplines and sectors.

In keeping with the principle ‘we cannot manage what we do not understand’, this recommendation will lead to better understanding of the whole-system characteristics that emerge from energy-water-carbon intersections, including resilience, adaptability, transitions and thresholds. Understanding of these characteristics will lead to identification of potentially successful and unsuccessful pathways—particularly the dead-end pathways which lead to long-term problems for society if action is not taken early and from which escape is difficult. Examples of integrative issues for this effort include the implications of climate change and population growth for the economy, urban amenity, agricultural productivity, ecosystem health and societal wellbeing.

In keeping with the principle ‘we cannot manage what we do not measure’, the recommendation will lead to stable, ongoing and continuous operational delivery of essential biophysical, ecological, geographic, economic and social information, through greatly enhanced support and integration. These kinds of information are crucial for both research and operational goals in integrative frameworks.

Steps to implementation: The first part of the recommendation can be initialised relatively quickly, but is long-term in its ultimate time frame and in its intent of catalysing a transformation of the innovation system to generate an enhanced focus on integration. This part of the recommendation proposes the establishment of a national program for integrated systems analysis. This program will encompass both natural and physical science disciplines (for example hydrology, agricultural science, climatology and engineering) and also human sciences (for example economics, demography, social science and psychology). Its focus will be upon linkages and connections rather than on disciplinary components.

The integrated systems analysis program can be built around a dedicated central research agency, linked to nodes based on existing institutions. Its governance would be structured to ensure a high level of user engagement, through a board that includes key national and state agencies and embraces both research users and providers. The program will have extensive international linkages to institutions in other countries that carry out related work, such as the International Institute for Applied Systems Analysis in Laxenburg, Austria (IIASA;, the National Science Foundation (NSF) Advisory Committee for Environmental Research and Education in the USA (AC-ERE; and the Global Systems Dynamics and Policy initiative of the European Union’s Framework Science Program (

A significant part of the mandate of the program will be education and training of researchers and practitioners in integrated systems thinking. There is an acute need for researchers with these skills at all levels, from research assistants to leaders. International demand for these research skills is very strong. In time, an Australian education and training program in these areas has the potential to operate not only nationally, but also regionally and globally.

The second part of the recommendation addresses the compartmentalisation of research funding and organisations into silos representing traditional disciplines, such as physical sciences, earth sciences and biology, or into research sectors, including the natural sciences, social sciences, economics and the humanities. Implementation involves two specific components:

  • We propose adding a National Research Priority which will promote cross-disciplinary and cross-sectoral synthesis, as required by the close connections between energy, water, carbon, agriculture, ecosystems and society. This would be reflected in long-term funding criteria by the Australian Research Council (ARC) and in other government research funding initiatives.

  • We propose a research-coalition model for linking the diverse existing providers of energy, water and carbon research with the users of that research. Such a model can encourage both fundamental and applied research with appropriate overall priority setting and selection. This can be implemented in the energy, water, climate and other sectors by building upon existing arrangements (for example the ARC, Rural Research and Development Corporations and Cooperative Research Centres), in a sector-appropriate manner.

The third part of the recommendation proposes enhanced support for and integration of essential biophysical, ecological, geographic, economic and social information. These kinds of information are presently supplied by numerous systems with varying levels of continuity and linkage to other systems. In a rapidly changing world, this monitoring is needed not just as occasional audits or snapshots (as provided in 2000 by the National Land and Water Resources Audit, for example) but as continuous data streams to track trends and provide early warning of changes. Increasingly, the supply of suitably integrated and connected information is an innovaton challenge in its own right. It is essential to have better coordination and stable support for these activities, which are currently spread across numerous agencies, including the ABS, ABARE–BRS, the Bureau of Meteorology, CSIRO, Geoscience Australia, National Research Facilities such as TERN (the Terrestrial Ecosystem Research Network) and IMOS (the Integrated Marine Observing System), several federal and state government departments, and universities. The important need is not to bring all of these processes under a single framework, but rather to ensure stability of funding, effective delivery of information and effective connectivity between different kinds of information.

From a government perspective, the research system is the natural custodian of cross-portfolio research leadership. The changes envisaged here can therefore complement the recent proliferation of national research programs administered by government departments (Department of Finance and Deregulation, 2009).

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