Seven months past deadline, discoms still way behind smart meter target
Discoms had switched only 3% of high-usage consumers by July—or 178,000 of the total 5.7 million who should have been shifted by now, says the power ministry
Mumbai: Seven months after missing the deadline for switching high-usage power consumers from conventional to internet-enabled meters, state power distribution companies (discoms) are struggling to implement the power ministry’s ambitious smart meter targets.
According to data published on the ministry’s website, state discoms had switched only 3% of high-usage consumers by July—or 178,000 of the total 5.7 million who should have been shifted by now.
The National Tariff Policy 2016 had mandated that consumers with monthly consumption of over 500 units (or kilowatt hour) had to be switched to smart meters by December 2017; for consumers whose monthly usage is between 200 and 5,000 units, the deadline is December 2019. Progress with consumers in the 200-500 unit band is even slower, with only 180,000 out of 18.3 million—or 1%—having made the switch.
“The government has so far allocated ₹800 crore to state discoms to implement the programme, but a lot depends on the leadership at discoms and how eager they are to do this,” a senior government official, who did not want to be named, said. “Besides that, the availability of smart meters is going to be a problem because there just aren’t enough manufacturers. Even for existing manufacturers, it takes almost 3-6 months to get their BIS certification for their meters. It slows down the whole process even further.”
India has 250 million registered power consumers, but state discoms, in separate pilot projects, have been able to cobble together fewer than 200,000 smart meters—or 0.08%—to connect to the national grid. According to data in the India Smart Grid Forum’s website, not even all of these 200,000 have been installed.
Setting up Advanced Metering Infrastructure involves integrated infrastructure for smart meters, a two-way communication network, control centre equipment and software applications that enable near real-time gathering and transfer of energy usage information. For the discom, the web-monitored technology reduces meter-reading and data-entry costs, and cuts down the quantum of commercial losses and billing inefficiencies. For the consumer, the smart meter lets them monitor usage, get vastly more accurate meter readings and make instant payments online. The cherry on the cake is that the cost of installing the meter falls on the discom; the user pays nothing.
Tata Power Delhi Distribution Ltd (TPDDL), a joint venture between Tata Power and the government of the National Capital Territory of Delhi with 1.6 million customers in north and north-west Delhi, is the first state utility to implement a comprehensive plan for deploying smart meters.
In a phone interview, Sanjay Banga, chief executive officer, TPDDL, said that the private sector utility started switching high-usage customers to smart meters in July. “The initial rollout is for consumers who use more than 500 units a month—we have about 100,000 such consumers and they contribute to about 70% of our revenue. These will be covered in the next 12 months,” Banga said. “In the next five years, 90% of our consumption will be on smart meters and by 2025, we aim to cover all of our 1.6 million customers.”
A single-phase smart meter costs about ₹3000-3500, compared to ₹700-1000 for a similar conventional meter. “But the advantage is reduction in operational expenditure,” Banga said.
“With smart meters, no meter reading is required. The outage time and disconnections are reduced and we are better equipped to predict demand, which has a positive impact on tariff.” For its first order of 200,000 meters and the supporting IT infrastructure, TPDDL has budgeted Rs 100 crore. “We think the investment can be recovered in under 4 years,” Banga added.
Some discoms have approached Energy Efficiency Services Ltd (EESL), a joint venture of several power-related PSUs, to implement smart metering outside the national programme.
Saurabh Kumar, managing director, EESL, said he has signed agreements to supply a million meters to the Haryana state discom, 4 million to Uttar Pradesh, 60,000 to the NDMC area of Delhi and 1.8 million meters to Bihar. “We have begun implementation in rural Varanasi, and will follow this up in the next two weeks in Lucknow, Kanpur and the NDMC area of Delhi. In Bihar, we’re identifying five cities to start with. We plan to install around 2 million smart meters by the end of this financial year.”
“We have already procured 5 million smart meters and the required system integrator. We’re also finalizing another tender for 5 million meters, to meet the demand in Jharkhand, Karnataka, Gujarat, Andhra Pradesh and Tamil Nadu,” Kumar added.
Under EESL’s system, the company buys, owns, operates and maintains the meters for seven years after installation. “We have a service model where we provide meters to discoms which will be installed at the consumer’s premises on a rental basis. I will install this for Rs 70 a month per meter and maintain this for seven years. We work on a cost-plus model and for each smart meter that we install, we get a 14% return on our equity, so this is a commercially viable model,” /said Kumar./
The major challenge in switching to smart meters is uncertainty about the technology. “The data that comes in should conform with the existing billing data of the discom,” Kumar said. “The bills should be generated correctly and consumers shouldn’t be able to bypass the system. It’s largely a software integration issue.”
Girish Kumar Kadam, sector head and vice president, ICRA Ratings said: “The rationale for smart meters is well understood – it attacks pilferage and leakage, improves the billing system and reduces commercial losses for the discom. It benefits both the discom and the customer. But the progress has been slow and utilities need to be more pro-active at implementing this. My first impression is that state utilities that face high AT&C (aggregate technical and commercial losses) would adopt this, but we can’t say what the on-ground challenges are. In the past, we’ve seen resistance in installing meters at agriculture pump sites, so there could be bottlenecks like this. Nonetheless, thrust to ensure awareness in the consumers by utilities as well as timely implementation of execution of smart metering infrastructure programme initiated for utilities in few states by EESL over next two years also remains important.”
Editor's Picks »
- What to expect from Q3 results of IndiGo, SpiceJet, Jet Airways
- Forget privatisation, govt has hugged its banks tighter
- Flat profit, rising debt are growing worries for Reliance
- Q3 results: HUL growth off a high base shows it’s on a roll
- DCB Bank Q3 results: Small loans give big pain as farm, mortgages lift delinquencies