Serving the tech-savvy power consumers

We have started seeing a fundamental shift in how power is consumed, requiring utilities to become more customer-centric in fulfilling those needs

A new breed of customers is emerging in the power sector which wants more than just 24x7 electricity. This “reflex” generation, born in the digital era, is more technically savvy and is constantly involved in changing the business landscape. How prepared are the utilities to empower them?

The relationship between Indian energy companies or utilities and their customers is increasingly starting to resemble the more vibrant telecom sector. And this is just the tip of the iceberg. At the core of the fundamental shift taking place in the Indian power sector are two vital parts — technology and enlightened customers. Together, they are ushering in a new era in the sector. Let us examine them more closely.

The whole digital transformation has influenced how today’s generation of customers interacts, thinks, feels and wants. This has led to a change in the business landscape from traditional-led to digital-first, which is revolutionising the power industry and the way people consume power. Smart grids, smart meters and digital technology, now available off the shelf, are allowing power consumers to exercise better control over their energy consumption. Customers can now not only decide how they pay their monthly power bills but also how much they pay. Combined with yet another revolutionary idea such as solar rooftops that are starting to pop up across the country, the power sector in India is catering to a new breed of enlightened customer.  

Today’s solar rooftops are much more than those the earlier generation used. They do more than power the water geysers through photovoltaic panels sitting on rooftops. Solar rooftop customers not only produce their own electricity, but with the help of digital technology, have the power to manage their consumption and feed excess power back into the grid, thus making them energy producers too. Tata Power has launched it in four cities (Mumbai, Delhi, Ajmer and Bhubaneswar), and will be covering 14 other cities in the next four months.

Also, customers today don’t stop at just asking for better control over their energy bill from a household budget point of view, but are also concerned about the impact of their power consumption on the environment. This is why homes and commercial establishments fitted with solar rooftops and powered by digital technology are gaining popularity in many parts of the country. The size of this fast emerging composite ecosystem in the country, known as the smart home market, is estimated at $870 million (Rs 62 billion), and the average revenue per installed smart home is $97.59 (Rs 7,000).  

Recently, Tata Power-DDL rolled out its smart meter project in the National Capital Region with 250,000 devices that will be installed in north and south-west Delhi. We expect around 1.6 million smart meters to become operational in this region by 2025.  

The reflex generation — which is environment-conscious and looks for cheap, convenient and sustainable solutions — tries to choose products and services from entities with social values that are aligned with its own. This on-the-go set of customers seeks more personalisation and wants information or services that can be accessed instantaneously and from anywhere. This trend of more personalised, convenient and cheap offerings along with technological innovations in the power sector has led utilities to continuously evaluate new business models for providing access to electricity and related services. One of these is the emergence of micro-grids in the country.

Micro-grids bring in more efficiency in the power ecosystem and at the same time provide electricity access to the underserved or unserved population who have great aspirations but are bound by resource constraints. These tiny islands of micro-grids, isolated from the main grid, help reduce the time taken to electrify places (it would have taken longer if done through extension of the main grid). Micro-grids, powered by renewable sources such as solar or wind, when connected to larger conventional grid systems improve the reliability of utilities, which is what today’s generation of customers wants. For example, an outage in one part of the grid does not have to bring the entire system to a halt for maintenance. And a hospital or a school connected to a micro-grid can then run more smoothly without its operations being affected.

For a power-hungry nation aiming to consistently push economic growth at rates in the vicinity of 8 per cent or higher, universal availability of power has to become a norm. Therefore, use of technology to offer smart solutions in the power sector cannot remain a prerogative of customers only in large cities and towns. The central government’s Saubhagya scheme, which aims to make electricity accessible to every household in the country, can move ahead with more vigour thanks to faster proliferation of energy infrastructure.

There is no disagreement on using technology in the power sector to meet the country’s economic and social agendas. We have started seeing a fundamental shift in how power is consumed and demanded by consumers, thus requiring utilities to become more customer-centric in fulfilling those needs. The business models of utilities will undergo massive change in order to become more responsive, so as to adequately address the needs of this impatient generation.

The writer is chief executive officer and managing director, Tata Power