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Photo: Bloomberg
Photo: Bloomberg

India’s smart meter programme to shun Chinese manufacturers

  • NDA government plans to convert all electricity meters into smart prepaid meters by 2022

NEW DELHI : India plans to discourage the use of Chinese manufactured electricity smart meters, as the Union government is cautious about such imported equipment running the risk of being infected by a malware, said two people aware of the development.

Consequently, the power ministry is not in favour of state-run Energy Efficiency Services Ltd (EESL), that has been designated to implement the world’s largest smart metering programme to not use such equipment, given the risks involved.

The move which is part of a broad economic response to Chinese aggression in the Ladakh area, assumes importance given that the National Democratic Alliance (NDA) government plans to convert all electricity meters into smart prepaid meters by 2022.

A smart meter architecture requires a two-way communication network, control centre equipment and software applications that enable near real-time gathering and transfer of energy usage information.

“EESL shall not import Chinese smart meters, given that these meters are connected to the electricity distribution networks which is a sensitive sector," said a senior Indian government official cited above requesting anonymity.

EESL’s smart meter program plans to replace 250 million conventional meters that will help in increasing the debt laden discoms’ annual revenues to 1.38 trillion. Also, India’s proposed 3.5 trillion distribution reform scheme—tentatively named Atal Distribution System Improvement Yojana (Aditya) to cut electricity losses below 12%—starts with smart meters.

EESL has also put a 2 million smart meter tender awarded to Indonesia based PT Hexing on hold, over concerns about its ownership and manufacturing plans in India. PT Hexing is said to be owned by Hangzhou, China headquartered Hexing Electrical Co.

Putting an order on hold and seeking clarification is first part of the order cancellation process. This comes in the backdrop of reports about Uttar Pradesh Power Corporation Limited (UPPCL) decision to scrap a consignment of Chinese smart meters being procured by EESL.

“Our tender conditions are very clear. Any supplier needs to have a manufacturing facility in India to be eligible to supply to us," said Saurabh Kumar, managing director of EESL, a joint venture set up by NTPC Ltd, Rural Electrification Corp. Ltd, Power Finance Corp. Ltd (PFC) and Power Grid Corp. of India Ltd.

Of the total order for which PT Hexing was the lowest bidder, around 10,000 meters have been supplied from its Indonesia facility, which have been also kept on hold.

“PT Hexing had promised that they will set up a facility here. We have now asked them formally last week about the status of their manufacturing facility in India. Till the time we don’t receive a satisfactory answer along with evidence, this complete order has been put on hold," said Kumar.

This comes in the backdrop of India’s strategy of erecting tariff barriers and other obstacles, including subsidizing finance for promoting local power equipment makers and prior-permission requirements for imports from countries with which it has a conflict as reported by Mint on Tuesday.

While queries emailed to a power ministry spokesperson wasn’t answered till press time, PT Hexing couldn’t immediately be contacted.

Kumar added that of around 1.6 million smart meters supplied by EESL to Uttar Pradesh, Haryana and Delhi. 1.4 million have been supplied by Genus Power Infrastructures Ltd’ Rajasthan facility. The remaining meters have been supplied by ITI and Larsen & Toubro.

“In respect of goods and services wherein domestic capacity is not available and that import is inevitable then it should be allowed only for a fixed timeframe of 2-3 years during which indigenous manufacturing of these items would be developed by an enabling policy/tax incentives/start-ups/vendor development/R&D support," power ministry said in a statement on Tuesday adding that, “Till such time goods so imported shall be tested in Indian laboratories for adhering to Indian standards and also to check the presence of malware."

China remains India’s second largest trading partner after the US. India’s exports to China rose 3.8% to $17.1 billion in 2019 while imports contracted 7.5% to $68.3 billion during the same year. The bilateral trade deficit with China has remained a cause of concern for India.

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