Innovation is critical for the future of electricity distribution networks. The energy system is rapidly transitioning to a decarbonised and decentralised model, while customer expectations and climate risks continue to rise. An innovation allowance provides a pathway to trial new technologies and approaches that deliver long-term value for customers.

Customers strongly supported this approach, emphasising that collaboration, transparency and equity would be required in development and delivery of the program of work.

To respond to customer feedback, we have developed an innovation allowance committee who will provide independent advisory to CitiPower, Powercor and United Energy’s innovation expenditure for the reset period for 2026-2031.

Purpose of the innovation allowance committee

The committee will provide a forum for the network to consult with stakeholders in deciding the future direction of the network innovation focus, ensuring investment in projects that will deliver clear customer benefits.

The committee will help minimise the scope for overlaps in innovation expenditure across the industry and facilitate innovation knowledge sharing that supports outcomes to maximise the potential customer benefit from each initiative.

The committee will oversee the full innovation lifecycle of:

  • Ideation – identification of potential innovation opportunities
  • Trial – approval and delivery of pilots or trials
  • Scale – consideration of expansion where benefits are demonstrated
  • Business-as-Usual – transition into standard operations
  • Stop – cessation of projects that do not meet success criteria

What is the focus of the innovation allowance

Assisting the energy transition

There is an increasing need to support communities and industries during the energy transition. Customers are becoming more dependent on electricity and must be supported through this change. It is important to consider the appropriate energy solutions for customers via new technologies, arrangements and processes whilst ensuring the network has the capabilities to support this. Trialling innovative technologies will assist the integration and utilisation of CER connected to the network. This will ensure that customers are able to get the most value from their assets and utilise the network safely and efficiently. Supporting customer energy solutions will also contribute to reducing greenhouse gas emissions.

Improving customer experiences

As the journey towards net-zero continues customers are becoming increasingly dependent on the distribution network. Considering how to best address customers’ needs and expectations during this rapid change is essential and that they are receiving the most ideal experience. It is important to address how networks can continuously improve customer experience when customers are interacting with distribution services. As a result, innovative ways must be explored to effectively meet and respond to the changes in customer needs and expectation. This involves trialling new innovative technologies and capabilities related to the network, whilst ensuring this aligns with the network planning and operations.

Developing sustainable networks

Emission reductions have become an objective in the National Electricity Rules as well as being a desired preference by the network stakeholders, increasing the need for networks to decarbonise. Networks are assisted in decarbonisation process by improving the performance of renewable energy sources and technologies to better utilise the network and support grid stability and additional capacity, as well as reducing the business sources of greenhouse gas emissions.

Building resilient networks

As the climate continues to change, Victorians can expect more frequent and severe weather events such as fires, floods and storms. This is likely to lead to increasingly poor outcomes for customers due to the associated outages linked to these events. Innovation related to building a resilient network gives us the opportunity to explore, experiment and understand the limitations and barriers of the network when exposed to extreme weather conditions.

Project selection criteria

For projects to be delivered under the innovation allowance, they must meet the following criteria, with an assessment also consulted with the innovation committee:

  • be aligned with key focus areas and targeted outcomes
  • solve a unique problem
  • deliver clear benefits for customers (with respect to the National Electricity Market and resilience)
  • represent a real innovative approach (which does not represent business as usual activities or duplicate or incentive schemes)
  • be scalable (appropriately sized for a pilot/ trial, and can be replicated and expanded if success is demonstrated)
  • include a robust risk management plan, addressing potential challenges and uncertainties.

Have a question?

For any questions relating to the innovation allowance or committee, please email Community@ue.com.au