Valuable Learnings

Building on the experience of smart grid pilot projects

Of around a dozen smart grid pilot projects being implemented under partial funding from the Ministry of Power (MoP) and under the National Smart Grid Mission (NSGM), three projects have been commissioned while the others are at various stages of implementation. The pilot projects have, over the years, facilitated the maturation of the smart grid industry and provided a large body of knowledge that can help advance the collective thinking on the path forward. A recent report, “Insights from Pilot Projects for Scaling Up Smart Grid in India”, by the United States Agency for International Development (USAID) analyses the operations and implementation of pilot projects and offers recommendations for a large-scale roll-out of smart grids. Its key recommendations include identifying the best-suited technology to achieve the desired outcome, undertaking detailed budgeting, analysing the financial viability of a project, and identifying an infrastructure-ready area for the project.

Status of existing smart grids

Smart grid pilot projects are being developed with a partial grant from the MoP (except the Uttar Haryana Bijli Vitaran Nigam Limited [UHBVNL] project, which was funded by the Japan-based New Energy and Industrial Technology Development Organisation [NEDO]) as well as under the NSGM. The functionalities being tested in these pilots include advanced metering infrastructure (AMI), outage management system (OMS), peak load management (PLM), power quality management (PQM), distributed generation and supervisory control and data acquisition (SCADA).

MoP-sanctioned pilots: The MoP-sanctioned pilot projects at a total sanctioned cost of Rs 4.8 billion, including Rs 1.8 billion funding support. These projects include a smart city demonstration project at IIT Kanpur and the Smart Grid Knowledge Centre being developed by Powergrid in Manesar, Haryana. So far, three projects by UHBVNL, the Himachal Pradesh State Electricity Board (HPSEB) and Chamundeshwari Electricity Supply Company (CESC) as well as IIT Kanpur’s smart city research and development platform have been completed, while eight other pilot projects and a smart grid knowledge centre are at various stages of implementation.

NSGM: Under the NSGM, three smart grid projects, entailing a cumulative investment of Rs 2.6 billion (of which 30 per cent will come from the government), are being developed. These projects cumulatively cover 302,928 consumers and are located in Sub-division 5 Chandigarh, being implemented by the Chandigarh Electricity Department; and in Congress Nagar and Amravati. The last two are in Maharashtra and are being implemented by Maharashtra State Electricity Distribution Company Limited (MSEDCL).

Scaling up smart grid projects

The study published by USAID, under the US-India Bilateral Partnership to Advance Clean Energy-Deployment (PACE-D) Technical Assistance Program, analyses the experience of select pilot projects and presents key learnings for stakeholders for scaling up of smart grids. The key recommendations of the report are discussed in the following sections.


The pilot smart grid projects were equipped with a number of functionalities such as AMI, PLM and OMS, broadly to understand the use case for technology and its outcome. In order to ensure that the smart grid project is financially viable, the utility needs to adopt the best-suited model in view of its present and future resource availability. Some of the available options are the capex model (wherein a part of the payment is made on the supply of material and the remaining amount is structured in equal instalments over project deployment and operations), the savings model (wherein the payment is based on the realisation of benefits with minimal/zero upfront payment) and the lease model (wherein the payment is made over a specified tenor on a per consumer per month basis). Another pertinent aspect in planning a smart grid project is undertaking detailed budgeting of the expenditure to minimise the variance between the expected/approved price and the market-discovered price. Adopting cost benchmarks based on prices discovered from competitive bidding and undertaking a detailed bill of quantity assessment for the project area would be useful. For the timely completion of the smart grid project, it is essential to ensure the availability of updated consumer indexing data for the installation of smart meters and accurate energy accounting.

Bid development

One of the key reasons behind the cancellation of pilot smart grid projects or deferment in their implementation was delays in the manufacture or supply of smart meters by vendors as per the requisite specifications. Therefore, formulating bid documents with the desired provisions to attract proven smart meter providers both at the national and the global levels would help in mitigating supply risk. Another important aspect of the bid document is upfront identification of system interface requirements that can operate with the legacy system. This would provide clarity to existing and prospective vendors, and avoid cost overruns at the implementation stage.


For the success of a smart grid project at the implementation stage, which broadly entails the installation of smart meters at the consumer premises, consumer engagement is crucial. Developing strategies for awareness creation, increasing consumer participation and developing redressal mechanisms are the keys to unleashing the full smart grid benefits. A key challenge on the smart metering front is the lack of adequate lab infrastructure for type testing of meters, leading to delays in meter installation. At the pilot project level, in some case types, testing of meters took as much as six months. Scaling up of testing labs, along with creating dedicated testing windows for ensuring process optimisation, is essential on the meter testing front. Effective operation of a smart grid entails the availability of adequate dedicated and skilled manpower, particularly in the IT domain. Utilities need to plan and recruit a new IT cadre to focus on smart grid and other information and communication technology initiatives.

Operations and monitoring

At the smart grid project operation level, reporting of performance data and data analytics provides vital insights into utilities for improving their operational and financial efficiencies. The formats for data reporting need to be defined at the bidding stage. Formulating guidelines and practices for ensuring data privacy is also needed. Measurement and verification of smart grid project performance are important for scaling up smart grid projects. Continuous monitoring of projects is essential to track project benefits and take corrective actions. Apart from this, a dedicated team with multidisciplinary skills is a key requirement for the successful operation of smart grid projects.

In sum, the smart grid pilot project lends a robust foundation for the large-scale roll-out of smart grids. With experience from these pilot projects, the market and utilities have matured sufficiently to implement larger smart grid programmes. Incorporating the key learnings  in planning for the future smart grid projects would help in sustainable and accelerated transformation towards a smarter grid in India.


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