An international consortium that includes GE Energy, IBM and TransGrid is to develop Australia’s first commercial-scale smart grid in Newcastle, New South Wales.

Australia’s minister for Climate Change, Energy Efficiency and Water, senator Penny Wong, has announced that EnergyAustralia has won the bid to develop the A$100 million “Smart Grid Smart City” project, which is expected to lead ultimately to advances in energy efficiency across the country.

According to Wong, Smart Grids could give Australian households and businesses the tools to reduce their energy use and energy bills into the future.

“Smart grids are critical in the fight against climate change, as they have enormous potential to improve the efficiency of our electricity sector and transform the way we use energy in our homes and businesses,” Senator Wong said.

“Smart Grids give households the ability to manage their own energy use, as they give consumers information about how much energy they are using and the costs at any time.”

The announcement follows the recent shelving of Australia’s plans to tackle climate change through an emissions trading scheme. The country’s economy and power industry is heavily reliant on coal and Australia is also considered to be highly vulnerable to the effects of climate change.

The EnergyAustralia consortium consists of IBM Australia, AGL, GE Energy, TransGrid, Newcastle City Council and the NSW government. It will develop a main demonstration site in Newcastle and will also conduct other trials in Scone, Homebush, Ku-ring-gai and the Sydney CBD.

“If smart grid applications are adopted around Australia they could deliver a reduction of 3.5 megatonnes of carbon emissions per annum, said Wong.

Minister for Resources and Energy, Martin Ferguson, said the EnergyAustralia consortium would test smart grid technologies and ensure their suitability for Australian conditions.

“This demonstration project will provide information on the costs and benefits of smart grid technologies and applications that industry needs to make the right decisions in implementing this technology,” Ferguson said.

“A smart grid can identify and resolve faults on the electricity grid, manage voltage and identify infrastructure that requires maintenance.”