How smart metering infrastructure can help distressed power sector

Electricity demand is expected to nearly double by 2030, but high aggregate technical and commercial (AT&C) losses mar sector. The reliance on postal services in sending bills to customers, delayed payments, and collecting tariffs from inaccessible geographical locations has prompted a need to look for an alternative.

“AT&C losses are major contributors to overall power losses in the sector. As a result, distribution utilities lose almost 72 paise per unit of electricity they purchase,” said Vishal Kapoor, a director, Union Ministry of Power (MoP), in a webinar.

The country aims to cut AT&C losses under 12 per cent by 2022 and below 10 per cent by 2027. The losses are currently pegged at 20 per cent.

India is also transforming its energy mix by installing more non-fossil fuel-based energy generation technologies. Smart grids are entrusted to both integrate renewable energy and reduce AT&C losses. 

The smart-grids are digitally augmented electricity grids which automate and manage the increasing intricacies on the supply as well as the demand side.

The smart grid enhances quality management of distribution and transmission in terms of voltage control, rerouting, reliability, monitoring and control. Motivating drivers for smart grids include system efficiency improvement, reliability improvements, renewable energy targets, enabling new products services and markets and customer choice and participation, and reducing operation and maintenance costs.

Advanced Smart Metering Infrastructure (AMI), according to experts, provides a reliable and effective solution for most of these drivers. Using smart meters can result in an efficient way to manage electricity by checking data entry errors and cutting costs of manual metering.

The importance of establishing AMI is to enable two-way communications with customers, remote meter reading for error-free data, identifying network problems, load profiling, energy audit and partial load curtailment in place of load shedding.

Unlike regular metering, it enhances consumer satisfaction through better complaint management, system stability, reliability and transparency. Moreover, from the utility’s perspective, the major driver for pushing towards smart meters is the reduction in AT&C loss.

Kapoor said, “The Smart Metering Programme (SMP) undertaken by Energy Efficiency Services Ltd (EESL), is helping electricity distribution companies generate 95 per cent of billing efficiency during the lockdown.”

But challenges lie ahead. According to Saurabh Gupta, director, KPMG India, some of them are:

• High upfront cost of advance metering infrastructure projects.
• Utility’s ability to take up such projects on CAPEX model
• Establishing a strong business case for smart meter investments
• Full benefits of smart meters going unrecognised by cyber-security and data analytics 

The Union government has targeted to install smart electricity meters in all households across the country within three years. Down to Earth previously reported that the high cost of installation may hamper it.  

The MoP, along with Union government’s National Smart Grid Mission (NSGM), has developed an IT-enabled tool for analysing the investments and returns of any project. “Legacy regulations shall accommodate more technological solutions to ease the doing of business of smart metering,” added Kapoor.    

Another hurdle in smart metering is software integration with the new system. As India is driving towards implementing pre-paid smart meters, the difficulty in shifting from the existing post-paid model to pre-paid needs to be managed.

Likewise, communication technology preference could hinder the roll-outs of smart meters. The choice between the usage of General Packet Radio Service (GPRS) or radio frequency should be analysed based on the geographical location and feasibility. Human resources must be ensured that they can adapt to technology change and the lack of knowledge in handling the software.

Second, it could take away their routine functions when the system gets automated. This should be handled with care as it could provoke resistance to new technology.

“Communication with the consumers and addressing the knowledge gaps about the importance of smart meters is crucial,” said R Lakshmanan, IAS Executive Director, REC Ltd, and chief executive officer, REC Power Distribution Co Ltd.

Once these challenges are addressed, there are value-added scenarios that the smart meter brings in. Time of Day tariff feature that allows consumers to reschedule electricity usage to the off-peak hours and reduction in the bill amount significantly could be a future possibility along with the demand-response programme. With renewable energy growth in distributed generation, net metering provision comes along with smart meters.

The scale of implementation, on the other hand, has proven to be advantageous. It has proven to be an opportunity in the reduction of the cost of implementation of smart meters.

The Smart Meter National Programme (SMNP) by EESL aims to replace 25 crore conventional meters with smart meters in India and are at various stages of implementation. Around 1.9 million smart meters have been installed in Uttar Pradesh, Haryana, Bihar and Delhi.

“The total project cost would be around 1500 billion, which include the direct cost of purchase, and hand-holding over 10 years,” Kapoor added.

Arun Kumar Mishra, director, NSGM management Unit, claimed around 1.54 lakh smart meters were installed across the country under the initiative.

Smart meters have been in existence around the world for a long time. However, India lags behind. The onset of smart meters would solve some of the power sector’s problems.