Smart meters are becoming increasingly prominent in the power distribution segment, owing to their ability to improve the operational and financial performance of the utilities. As of February 2023, the total number of smart meter installations in the country has crossed 5.4 million. Government schemes and programmes, especially the Ministry of Power’s (MoP) Revamped Distribution Sector Scheme (RDSS), are giving a huge impetus to the deployment of smart metres in the country. These programmes provide power departments and discoms greater funding access for prepaid smart metering, distribution infrastructure upgrades, and system-wide metering for modernisation and loss reduction.
Moreover, as per Intelllismart’s recent presentation at a Power Line conference, the transformation of meters through digitalisation can reduce discom losses and generate savings of up to Rs 9 trillion over 10 years. It can also help generate electricity consumption data and capture household energy usage patterns, which could enable discoms to carry out effective demand-side management, prevent outages and optimise distribution. With the help of predictive analysis, smart meters can enable demand-based energy supply and reduce load demand, which in turn will address the variability issue of renewable integration in the grid, and prevent grid disruption. Besides, with smart energy infrastructure, utility providers can effectively manage distributed renewable power sources scattered across the grid. Smart meters will enable consumers to monitor and control energy usage, and accordingly change their energy consumption behaviour. The simplification of the bill payment mechanism through the deployment of smart meter mobile apps will significantly improve consumer habits and regularise the bill payment process. In addition, smart meters will enable consumers to turn into prosumers by supporting peer-to-peer solar energy trading.
Progress so far
As of February 10, 2023, around 103.94 million smart meters have been sanctioned across the country and 5.46 million have been installed. Additionally, data from the National Smart Grid Mission (NSGM) indicates that around 98.49 million smart meters are yet to be installed. In 2021-22, a total of 4,114,479 smart meters were installed in the country – an increase of 73.68 per cent over the installations in the preceding year. State-wise, Bihar has the highest number of installed smart meters (1,299,448) followed by Uttar Pradesh (1,178,061), Haryana (636,060) and Rajasthan (569,354).
Scheme-wise, over 810,257 smart meters have been installed under the Integrated Power Development Scheme, while 156,677 have been installed under NSGM. In addition, 162,178 smart meters have been installed under the Prime Minister’s Development Package, and 38,400 under the Deendayal Upadhyaya Gram Jyoti Yojana. Among agencies, Energy Efficiency Services Limited has installed 3,310,863 smart meters, REC Power Development and Consultancy Limited has installed 186,392, and PFC Consulting Limited has installed 151,015. Various other power utilities have cumulatively installed 1,808,283 smart meters.
Smart metering initiatives under RDSS
Launched in 2022, the MoP’s flagship RDSS initiative aims to improve the operational efficiency and financial sustainability of distribution companies. With an outlay of Rs 3,037.58 billion for a period of five years (2021-22 to 2025-26), the scheme aims to provide financial assistance to discoms for the modernisation and strengthening of distribution infrastructure, and improvements in reliability and quality of supply to end consumers. The main objectives of RDSS are to reduce aggregate technical and commercial losses to 12-15 per cent and reduce the average cost of supply-average revenue realised gap to zero by financial year 2024-25; and improve the quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector.
The RDSS is divided into two main parts: Part A, which provides financial support for prepaid smart metering as well as system metering and distribution infrastructure upgrades; and Part B, which focuses on training, capacity building, and other enabling and supporting activities. Prepaid smart metering is one of the key interventions envisaged under RDSS, with an estimated outlay of around Rs 1,500 billion and a gross budgetary support of Rs 230 billion. A total of 250 million smart meters are targeted to be installed under the scheme during the period 2021-22 to 2025-26. In addition to prepaid smart metering for consumers, the scheme envisages system metering at the feeder and distribution transformer levels with communication features, along with the deployment of associated advanced metering infrastructure (AMI) under the TOTEX mode. This will make it easier for discoms to measure energy flow automatically at all levels, and automate energy accounting and auditing. In addition, RDSS promotes the uptake of advanced information and communication technologies such as artificial intelligence and machine learning to analyse the data generated through smart meters and information technology/operational technology devices. This will enable the discoms to take informed decisions on power theft as well as formulate strategies for loss reduction, demand forecasting and asset management. So far, 204,623,182 prepaid smart meters, 5,412,008 distribution transformer meters and 198,826 feeder meters have been sanctioned across 28 states/46 discoms under RDSS, at a total sanctioned cost of around Rs 1.35 trillion.
Issues and challenges
As the smart metering programme gains traction across the nation, there is an urgent need to safeguard the metering system from vulnerabilities and the possibility of cyberattacks. There is a need to understand the types of threats that pose a risk and select security devices, tools and platforms that can monitor, detect and respond to these threats. For instance, keeping security at the forefront, a robust system architecture needs to be designed with vigorous security measures for data validation, privacy and encryption, access control, and error checking. In order to resolve connectivity issues, the implementation of hybrid models such as GPRS, radio frequency and narrowband internet of things is needed. Additionally, to overcome the challenges related to scalability and interoperability, functional requirements will have to be set out to minimum levels. There is a need to develop smart meter systems on open standards for smooth and easy interoperability of headend systems across multiple meter manufacturers.
Future outlook
As per Intelllismart’s presentation at a recent Power Line conference, the installation of smart meters can result in significant socio-economic transformation, save about Rs 10 trillion in losses for utilities, revitalise the industry and the Make in India programme in the manufacturing segment, trigger large capex cycles (requiring a debt disbursal of about Rs 2.5 trillion) and generate massive amounts of data for AI/ML applications. Smart metering, once implemented at scale, can create a plethora of sustainable benefits, generating long-term value for consumers and ultimately contributing to socio-economic development through consumer empowerment. For instance, usage data based on real-time tariffs and AMI consumer mobile apps can enable the alignment of consumption with power purchase costs on a real-time basis.
To conclude, backed by government support, smart metering in the country is expected to grow in a big way, going forward. Recently, at a review planning and monitoring meeting with states and state power utilities, the central government urged states to increase prepaid smart metering installations. The states have also been advised to expedite the implementation of smart meters and to ensure that no penalty is levied on any consumer for higher loads discovered after the installation of prepaid smart meters and billing.
