The mega drive to install smart meters in every household is off to a slow start. Of the five million to be offered in the first tender, in 2018, barely a fourth has been supplied by meter companies.
However, EESL, the nodal agency entrusted with the initial tendering, installation and consultancy, says it aims to procure 20 million meters and install two million of these by March 2020.
“The delay in supply initially did put back the process by six months. But, we are back on track. We have a strong pipeline. The next tender that we will float is of 10 million meters. So, supply will not be an issue,” Saurav Kumar, managing director, told Business Standard.
In March, the Union minister for power, R K Singh, announced 100 per cent smart metering in two years. A smart meter has a modem (communication device) and a remote switch by which demand, supply and billing can be monitored and controlled remotely. Data from these is collected in a cloud server. This reduces energy theft, improves billing and bill collection. It also helps power distribution companies (discoms) collect data on demand patterns, for use in planning of supply.
EESL has installed 400,000 smart meters till date, in Uttar Pradesh, Delhi, Haryana, Bihar and Andhra Pradesh. It is in talks with the governments of Rajasthan, Telangana and Karnataka to tender and install these.
Kumar said the areas where meters are operational have already brought benefits for the discoms. For Kesco (Kanpur, UP), NDMC (Delhi) and PVVNL (Meerut, UP), the cumulative net increase in monthly revenue is 15 per cent a month. NDMC saw its revenue shooting up by Rs 507 crore a month.
Supply constraints have slowed the procurement process. The lowest bidder for the first tender in 2018 was state-owned ITI, which has supplied barely 5,000 meters. EESL plans to blacklist it. It has already blacklisted Keonics. The gap in supply is being met by the second lowest bidder, Genus, which has supplied a million meters. The second tender, won by a Chinese company, was scrapped as the supplier didn't have the necessary quality certificates.
The latest tender this year was won by PT Hexing, which would supply five million meters. The price has come down to Rs 2,200 a meter, from Rs 2,400 in the first tender.
EESL says the installation model is aimed to maximise the revenues of discoms. A discom needs to pay EESL Rs 70-95 (single phase-three phase) a meter and provide access to billing and consumer data. Meter supply, upgradation of system integration, meter management system and billing is done by EESL. It has tied up with telecom service providers and cloud server ORACLE for this.
A telecom company earns Rs 6-8 a meter. For UP and Haryana, it tied up with Vodafone and BSNL. System integration takes Rs 20-25 a unit. All this comes from the per-meter payment EESL receives from the discom.
Meter suppliers have other problems. Many have complained against falling prices, participation of Chinese entities and lack of back-end infrastructure. Several expressed concern that states had been slow in installing these.
Earlier, Business Standard had reported that large players gave a miss to the smart metering tenders in the past, citing irregularities in the bidding document. Government officials contend leading companies have different communication technologies from what states have. However, they are streamlining this, with the same bid document, technology specifications and back-end infrastructure across the country.
“Creating back-end infra takes time. The System Integration which will monitor and collect data for all smart meters has to be standardised across the country. So, we had to reach out to discoms in every state to use similar technology,” said Kumar.
He said a smart meter has multiple benefits. “The system that has been designed will be used for value added services in the future. The same meter can be for pre-paid, for managing peak load, integration of renewable (energy) and time of tariff. It sets the stage for future reforms,” stated Kumar.