With advanced tech and IoT-enabled smart devices taking over every industry. The energy sector in India, in particular, is transforming by heavily investing in modern technologies. In fact, in 2021, the central government announced ₹3 lakh crores over five years as part of the Revamped Distribution Sector Scheme (RDSS) for the implementation of prepaid smart meter projects across the country. The projects are executed through Public-Private Partnerships with nodal agencies like REC Limited and Power Corporate Finance Limited (PCFL).
Additionally, the central government had also set aside ₹22,500 crore to install 25 crore smart prepaid meters across the country as part of the larger corpus of ₹3 lakh-crore scheme for power distribution entities or distribution companies (DISCOMS). So far, about 86 lakh smart consumer meters have been installed in the country and unless the pace of installations is ramped up – the goal of complete replacement of all existing meters with smart meters sounds like a distant dream.
Understanding Smart Metering
Smart meters are the next generation of electricity meters that allow customers to be aware of their consumption patterns and, at the same time, enable DISCOMS to bill customers without manual procedures. Smart metres can enable the use of electricity with granular control over the usage. Like mobile internet, which is enabled via a postpaid or a prepaid SIM card i.e., recharged as per requirement or paid based on usage. Smart metres can enable the same convenience and accuracy in electricity consumption. They also have a myriad of other features that include digital communication of electricity readings/bills and mobile applications to track consumption patterns.
Smart meters are based on the Advanced Metering Infrastructure (AMI) system. An AMI system is basically the integration of smart meters, communication networks and meter data management systems that allow two-way communication between the provider’s and consumer’s devices. This is enabled by three main components: Smart Meters (at the consumer’s end for measuring usage and communication), Head End Systems (for data acquisition and monitoring), and provisioning, and Meter Data Management Systems (for storing vast amounts of meter data for a given area).
Technical Specifications and Benefits
The Central Electricity Authority (CEA) provides the technical standards for smart metres. According to the authority, the smart meters must support bidirectional communication, integrated load-limiting switches, remote firmware upgrades, net metering, and numerous tariff options.
These enhanced features can help DISCOMS to manage operations more efficiently and improve billing efficiency. A recent CareEdge Ratings study found that better collection methods have enabled DISCOMS to cut their aggregate technical and commercial i.e. AT&C losses by 20.73%, and it further anticipates that smart metres can reduce this loss further.
Challenges and Concerns
Despite the potential advantages, the rollout of smart meters faces numerous challenges. Due to the advanced features they provide, smart meters are more expensive than normal electricity meters and thus a major question is deciding “on whose lap will the cost of these meters be imposed?”
While the customer gets enhanced features and possibly better service, the DISCOMS are the true financial beneficiary. Obviously, why would consumers want to replace already functional working meters? Logically, such an onus seems to fall on the DISCOMS. However, many of these DISCOMS are in poor financial health, making matters complex.
When the 2018 rollout happened in Uttar Pradesh, the government had assured that the burden of cost would not be passed on to the consumers. However, the funds need to come from somewhere, and increasing the price of electricity is one way in which the government can decide to balance the sheet.
The installation and maintenance of these smart meters would also require an army of workers with the required technical skills that learn to adopt, operate and troubleshoot the new systems.
Another important legal consideration is the aspect of data privacy. Data regarding usage patterns of electrical appliances in someone’s home can easily be extrapolated to determine information like – if and when someone is/ is not at home. Thus, ensuring the security of this data, which should be collected with appropriate transparency and informed consent is paramount.
Outlook
The plan for the implementation of smart prepaid meters across the country heralds a new dawn and is a step towards a more efficient and transparent power sector. Though many challenges remain, especially regarding cost and consumer acceptance, potential benefits in reducing losses, improving billing efficiency, and augmenting consumer experience are substantial. Thus, smart metres are a vital initiative shaping the energy future of India. It is hoped that similar large-scale initiatives for other utilities, like water and gas, would be seen in the coming future.
To ensure the success of this technology, its implementation needs to be done in a consumer-centric manner. This involves addressing technical and regulatory challenges and ensuring that consumers are well-informed and that their concerns about privacy and data security are adequately addressed. The proactive engagement of all stakeholders, including the government, regulators, utilities, and consumers, is essential. With the right approach and continued innovation, smart meters can significantly contribute to the modernization of India’s utilities sector, driving economic growth and fostering a more sustainable and efficient energy ecosystem.
