How smart meters are powering change for companies, consumers in country

Devices help electricity firms in preventing leakages and improving revenue by providing real-time data

Power distribution in India is infamous for inefficiency and losses. Despite several financial schemes, state-owned power distribution companies (discoms) are beleaguered. In recent years, a new approach to make discoms efficient has been tried – a part of it being driven by a 2 kg square box called smart meter.

Launched in 2021, the Rs 3 trillion Revamped Distribution Sector Scheme (RDSS) aims to improve discoms’ operations and finances. A major part of RDSS’ first phase was installing smart meters – a task for which the central government has allocated Rs 10,000 crore. The overall target is to install 250 million smart meters by 2025. Sector majors Adani Power, L&T, Tata Power and GMR have shown interest in installing the meters. Manufactures such as Secure Meters, L&T, HPL and Genus expect a boom in demand. 

A smart meter links an electricity supplier and user by providing information on demand and voltage. It helps discoms collect real-time data on electricity usage and faults. Users of smart prepaid meter, a variant, pay for electricity by ‘recharging’ the meter—like they do for a prepaid mobile phone subscription.

Smart meters help prevent electricity leakages and make billing efficient, reducing the aggregate technical and commercial (AT&C) losses of discoms. ‘Prepaid’ gives an upfront revenue channel for discoms, which are required to improve their demand side management (DSM).

Billing efficiency

At the supply end, discoms secure surplus power to meet rising demand. And at the demand end, smart meters help discoms in DSM by predicting, managing and fixing issues at the consumer level.

Discoms’ AT&C loss on an aggregate basis declined to 15.4 per cent in financial year 2022-23 (FY23) from 20.73 per cent in FY20, according to a CareEdge report published in March. “This is largely aided by an improvement in collection efficiency. CareEdge Ratings expects a gradual uptick in billing efficiency led by increased rollout of meter installations,” the report said.

The first tenders to install smart meters were given out in FY22, starting in Uttar Pradesh and Haryana. But it is Bihar that has the largest number of smart meters installed (3.1 million), according to data available at National Smart Grid Mission. Officials of the Bihar State Power Holding Company Ltd (BSPHCL), however, peg the number at 3.6 million and their target is to install 17 million meters.

Bihar’s efforts have helped. BSPHCL officials said the billing efficiency of discoms improved to 83.11 per cent in FY24 from 75.68 per cent in FY21. AT&C losses reduced to 21.74 per cent in FY24 from 29.77 per cent in FY22. Revenue collection was Rs 15,108 crore in FY24, marking a 13.09 per cent rise from the previous year. Bihar has two power discoms – in North and South – and both are owned by the state.

“The incidents of electricity theft have decreased as the installation of smart meters has progressed. Smart meters provide automated, accurate and real-time data on electricity consumption, reducing human errors associated with manual meter reading. Automation of meter reading and billing processes reduces operational costs. Additionally, discom officials now can focus on maintenance and customer service,” said Sanjeev Hans, principal secretary in the Bihar government’s energy department and chairman and managing director of BSPHCL, in a written response.

“By providing real-time data, these meters help understand consumption patterns and support the implementation of Time-of-Day tariffs. Customers can access detailed information about their electricity usage through smart meter interfaces, leading to increased awareness and more energy-efficient behaviour. Energy consumption has decreased in divisions where smart meters have been installed,” he said.

Digitising distribution

Smart meters are the first block in digitising power distribution, said Anil Rawal, managing director and chief executive officer of IntelliSmart, a smart metering and digital solutions provider. IntelliSmart, a joint venture of state-owned EESL and NIIF, is a participant in smart meter tenders of states.

“Smart meter infrastructure is a strong tool for discoms to implement a robust DSM framework by getting real-time power demand and managing the supply accordingly. Discoms shall be far more in control of the day-to-day consumption and can signal to grid operators, gencos, and power exchanges accordingly,” said Rawal.

The envisaged investment outlay for installing 250 million smart meters is Rs 1.1 trillion, which includes a debt of Rs 76,000 crore. The returns to discoms would be in the form of reduced losses and improved billing. CareEdge Ratings estimates that advanced metering infrastructures are likely to provide discoms an additional cumulative revenue potential of around Rs 4.5 trillion by FY31.

A greater impact of smart meters on the sector would emerge when they are adopted on a mass scale, said Rawal.

“Grid resilience and grid flexibility are the critical elements of any smart grid, which can be built through digitalisation in the grid led by smart meters. Success of digitisation initiatives, in addition to provisioning of infrastructure, would also depend upon the mass-scale adoption by consumers. 

“The larger the scale of adoption, the more the insights arrived through consumer data collected through smart meters, and the better the forecasting and DSM,” he said.