https://www.traditionrolex.com/28

Smart meters: Powering a Rs 65,000 crore opportunity

Smart meters present a highly viable solution for India’s discoms, which are faced with humungous losses and ever-rising debts. With the government giving a strong push to a nationwide programme for installing 250 million smart meters, industry has a major business opportunity. However, interoperability issues with traditional metering, billing and collection (MBC) systems need to be sorted out.

Photo Credit : https://bit.ly/3kd6BoJ

Smart electricity meters are a convenient option over conventional electric meters installed at our homes. These meters have the provision of a two-way communication with the central system. They report energy consumption regularly at short intervals, and also provide information on voltage levels, current and power factor. They can help  increase billing efficiency, enable remote billing, automatic outage reporting, ensure flexibility with time-of-use tariffs, and enhance possibilities of adding new revenue streams.

Globally, utilities are expected to invest US$ 378 billion in smart grid technologies by 2030. Focusing on regions, the smart meter market with highest rate of growth is Asia Pacific, which is home to 60% of the global population. With the increase in demand for electricity, there has been been a shift from conventional meters to smart meters to save electricity and maintain transparency between suppliers and buyers. Also, concerns of increasing energy consumption has made the adoption of these meters more pronounced. Some of the major players in the smart meter market across the globe are Wasion Group (China), Sensus (Xylem, US), Siemens (Germany), Landis+Gyr (Switzerland), Itron (US) and Badger Meter (US).

In India, the market for smart metering is expected to be US$ 19.98 billion in 2020. According to 2018-19 estimates, the per capita consumption of electricity in India is 1,181 kWh. Also, total production of electricity in the country stood at 1,371,817 Gwh in 2018-19. In comparison to the approximately 270 million traditional meters, India has only 3 million smart meters operational currently. On the other hand, the penetration is much higher for markets such as US (65-75%), China (40-55%) and France (60-70%). The main reason for this is the financial distress of discoms.

India is expected to be an emerging market for smart meters. Under the Smart Meter National Programme, the government has aimed to replace the 25 crore conventional meters with smart meters. By providing real-time data to discoms, the smart metering system would help in spotting any theft or loss. It has been reported that most of the state discoms lose approximately 25% of the electricity supplied as a result of theft, inadequate distribution infrastructure, poor billing or defaults in bill payments.

According to data revealed by Energy Efficiency Services Ltd (EESL), smart metering infrastructure has been 95% more efficient in billing in Q1 2020, which generated over 15-20% per meter as additional revenue. As per  EESL, this would equal to Rs. 100,000 crore of additional revenue annually from unbilled electricity.

Also, amid the pandemic, smart meters have provided an added convenience of remotely conducting meter readings, generation of bills and connection/disconnection. However, there can be issue of security with concerns of privacy breach and cyber-attacks. Recently, EESL cancelled a deal with PT Hexing, a Chinese company, because it failed to meet the requirement of producing these meters in India. The smart meter gathers information on real time energy usage and imported meters may run the risk of carrying malware.

Currently, India can produce a smart meter at a cost of Rs. 6,000-7,000. This implies that the cost of replacing all the conventional meter would approximate to Rs. 180,000 crore. However, with government steps to maintain prices and boost manufacturing in the domestic market, the cost of smart meters can be brought down to Rs. 2,000-4,000 effectively, while also keeping quality at par with Chinese imports. This would bring down the cost to around Rs 65,000 crore.

Smart meters cost around 3 times more as compared to conventional meters, but this can be recovered in a six-and-a-half year time frame. Rental models can be also used to bring down costs for discoms, as is the case in other markets. One major challenge to this is upgrading of traditional metering, billing and collection (MBC) systems, since they face interoperability challenges with smart meters.

The government has set a target of 250 million smart meters over the next few years. The proposed Rs 3.5 trillion ‘Reforms Linked Result Based Scheme for Distribution’ is aimed at completing the compulsory smart metering ecosystem across all distribution points. They are expected to help debt-laden electricity distribution companies by raising annual revenues to Rs 1.38 trillion. Even Reliance is planning to enter in the smart electricity meter market in India through Narrow Band-Internet of Things.  It has been argued by the parliamentary standing committee that there is need to establish a manufacturing base of smart meters in India. This would ensure wider industry participation as well as adequate supply. Given the inevitability of the technology and current penetration levels, it definitely presents a major opportunity for industry in the coming years.

Comments

  1. India against corruption is the website that shows various government schemes and also about various other attractions about the Governments.
    We also tell about various scholarships and contests that matter much for all.
    Thanks.

Leave a comment

Subscribe To Newsletter

Get to know of latest happening in TPCI & in the world of trade and commerce