We need to get smarter about smart metering
We need to get smarter about smart metering As of February 2023, nearly 5.5 million smart meters have been deployed in the country. India aims to install 250 million by 2026 Wednesday, 10 May 2023 It’sShaswata again for Green Margins this week. The low hum of air conditioners and the intermittent groans of backup generators are an inescapable part of India’s summer soundscape. As are month-end tears when the electricity bill comes due. But there’s a solution (for part of the problem, at least) that’s been rolling out for the past few years—smart, digital metering. Or rather, what smart metering allows you to do, which is switch over to a prepaid electricity plan. A study released a few weeks ago by Delhi-based think tank Council on Energy, Environment, and Water (CEEW) shows that there are many things consumers like about it: • around half of the 2,700 users surveyed report receiving their electricity bills more regularly; • two-thirds say paying the bills is much easier; • and over a third report a drop in instances of electricity theft, improved supply to the locality, and a greater sense of control over electricity expenses. I guess watching your power balance steadily leaking away has a marked effect on consumer discipline, and smart meter users I spoke to for this edition agree that they’ve started using power more conscientiously. Smart metering is also much easier on the balance sheets of India’s struggling power distribution companies (discoms), helping them improve bill collections and stem leakages. Which explains why installing smart meters is a critical part of the Indian government’s plans to shore up the health of the power sector. The Revamped Distribution Sector Scheme (RDSS), launched in July 2021, is ambitious. With an outlay of Rs 3 lakh crore (US$36.5 billion) for five years, it aims to reduce discom losses by installing 250 million smart prepaid meters across India by 2026. We’re now about halfway in, though. And the pace of installation has been nowhere close to what’s needed to make the goal. Taking control Not all smart meters are prepaid. In fact, CEEW’s survey included around 1,500 postpaid smart meter users and a large majority of them—nearly three-quarters—weren’t even aware of the prepaid option. And of those who were aware, only 13% were willing to switch to it, wary as they were about running out of balance and losing their power connections. Plain old “status quoism” isn’t helping either. Prepaid or postpaid, though, all smart meters offer consumers real-time motoring of their power consumption—most of them come with an app that allows such tracking. And for those who’ve switched over to prepaid, the benefits are quite tangible. I spoke to Sayon Mondal, a prepaid, smart meter user from Hyderabad, Telangana, and he told me that it gives him a good bearing on how much he is spending on power on a real-time basis. The reason why there is more expenditure in postpaid is because people are not worried about losing electricity as the meter, and resultantly, electricity, will never run out. You’ve got to be on the ball, though, and plan properly. It’s just like recharging your phone. But if you run out of money, then the power is cut. You have to be careful about how much electricity you’re using. Still, CEEW’s survey strongly indicates that the positives outweigh such concerns. Roughly 60% of respondents reported being satisfied with their smart meters and 69% said they would endorse this new technology to their peers. Binit Das, Deputy Programme Manager for Renewable Energy at think tank Centre for Science and Environment, says smart metering “not only controls power theft and losses, but both the utilities [discoms] and consumers can monitor consumption patterns, which will further make it easier to implement the time-of-day (ToD) tariff.” By alleviating discom distress, the government actually expects smart metering to bring down the cost of power by 2%-2.5%, according to R K Singh, Union Minister of Power and New and Renewable Energy. But that is only once installation is done. And installation is where India is dragging its feet. Need for speed CEEW conducted its study among consumers of only six states—Assam, Bihar, Haryana, Madhya Pradesh, Rajasthan, and Uttar Pradesh—and these six account for 80% of India’s total smart meter installed capacity. So halfway into the RDSS period, how many smart meters is that? To quote from CEEW’s report: As of February, 2023, nearly 5.5 million smart meters have been deployed in the country. Meeting the RDSS’s target would require deployment at a rapid scale—5.6 million smart prepaid meters per month. Enabling a Consumercentric Smart Metering Transition in India There are a few things holding back installation. Cost is one. Smart meters are quite expensive—industry estimates peg the cost of manufacturing and installing a smart meter to be about US$50 (∼Rs 4,100) per unit. The government, in fact, has raised this issue previously. “I urge the manufacturers to think of innovative ways to reduce the price of the meters to half without compromising on quality,” Power Secretary Alok Kumar said during a conference in November last year. This cost burden is borne by discoms for now, though state governments provide some subsidies, says Das. But eventually, this cost will be shifted onto the consumer as meter costs are included in the fixed part of the electricity bill, which will be higher for smart meter users. So why should the consumer cough up extra money just to change their meter, which has no effect whatsoever on the quality of power they’re consuming? A second factor is India’s low manufacturing capacity for smart meters. The majority are now sourced from foreign manufacturers such as Bosch, Schneider Electric SE, General Electric, and Larsen & Toubro. And a bulk of the imports come from Taiwan and China. Due to the huge demand mandate set by the government, the cost of smart meter manufacturing could have been reduced through economies of scale... But our domestic manufacturing capacity is not sufficient to meet that demand. So, we are dependent on imports from China and Taiwan, which naturally shoots up the cost. Binit Das, Deputy Programme Manager for Renewable Energy, Centre for Science and Environment Then, there are deep-rooted issues in state-level distribution networks, reflected in the skewed distribution of installations so far—of the 5.5 million smart meters installed, 97% are deployed in just 12 states and Union Territories, according to CEEW. “Some states have just proposed, some have sanctioned, others are at tendering stages, and some have placed the mandate, but the implementing vendors are delaying things because of delays from the manufacturers’ end,” says Das. [Source: CEEW] The problem here is that there is no standard procedure or guidelines at the national level for smart meter adoption. Shalu Agrawal, Senior Programme Lead, CEEW, and one of the authors of the study, says that currently, provisions governing prepaid smart meters in India are scattered across different regulatory orders and directives, which makes them inaccessible to key stakeholders, especially consumers. The central power ministry and the state electricity regulators should consider issuing smart (prepaid) meter guidelines to ensure a uniform consumer experience. Shalu Agrawal, Senior Programme Lead, CEEW All of which lead Das to believe that a more realistic goal would have been to try and hit the 250-million target by 2030. Because getting there requires some big-ticket projects in their own right—like beefing up domestic manufacturing capabilities, standardising guidelines and regulations, and helping consumers get a grip on prepaid electricity. That’s a wrap for this week. Keep writing to greenmargins@the-ken.com with your thoughts and suggestions and we’ll see you again next Wednesday morning. Take care. Regards, Shaswata Kundu Chaudhuri
