The 'Smart Grid, Smart City' initiative will oversee the deployment of Australia's first commercial-scale smart grid, touted as having the potential to cut the price of household energy bills and reduce carbon.

"The National Broadband Network ( ) is intended to enable a whole range of efficiency and productivity gains across the economy, including in the energy sector," communications minister, Stephen Conroy, said in a statement.

However, Layer 10 founder and NBN lead for the Communications Alliance, Paul Brooks, said it would depend on the NBN's timeframe as to whether the smart grid becomes one of the first wide-scale deployments of an application over the NBN.

"It will be a pilot program for operational processes, ordering and provisioning processes and how connections are going to be made over the NBN network," he said.

"The various technologies that a required do to this on a wide-scale have slowly been coming together from many different directions and, maybe, we're just at the right tipping point where we're putting some money on the table to get a little bit more action and a little less talk."