Improving the performance of the distribution segment is the need of the hour and smart metering can play an important role in achieving this. The high level of aggregate technical and commercial (AT&C) losses incurred by distribution utilities is a major problem in the power sector. These losses, especially commercial losses, can be controlled through smart metering.
Smart metering helps consumers control their power usage, allowing them to adopt energy efficiency measures that can help reduce their energy bills and offset the increase in prices. New electronic meters, an important component of smart metering, have a number of features such as automated meter reading, display of power consumed in the house, connect-disconnect facility, transfer of data, and communication of information on events such as thefts to the distribution control room. The installation of time-of-day (ToD) meters is also being encouraged in order to reduce electricity consumption. A number of state regulators have introduced ToD metering through which domestic consumers are charged according to power consumption during peak and non-peak hours.
A look at the advantages of smart metering in the Indian context and the smart metering initiatives undertaken/proposed by utilities globally…
Technical losses and theft
Smart metering holds more relevance in the current Indian power scenario considering the country suffers from 28 per cent AT&C losses, which translate into an annual loss of $22 billion for the state electricity boards. The use of electronic meters to read consumption is becoming a key requirement to reduce AT&C losses. Tamper-proofing, connection bypass-proofing, distribution optimisation and automation, and instant theft monitoring are some of the key advantages that make smart metering even more relevant.
To prevent thefts and fraud, and to improve distribution and reduce operational costs, Italy’s National Energy Company started the smart metering project in 2001 on a voluntary basis. By 2006, it had made smart metering compulsory. This initiative resulted in power plants running more efficiently and led to annual savings of $750 million. The project entailed an investment of $3 billion with a payback period of four years.
Demand-side management and demand response
Demand response (DR) is essentially a dynamic form of demand-side management (DSM) with a time component. Under DSM, the utility asks consumers to reduce their load during a demand-supply gap situation and compensates them for the same. In the case of DR, the utility asks consumers not only to reduce load but also to do so at a particular time.
The CFL programme, through which state discoms offered incentives to promote CFL adoption, is an example of a successful DSM programme in India. The distribution management system carries out centralised monitoring of the distribution network with faster identification of fault location, which leads to a reduction in man-hours and load shedding. DSM and DR can help reduce the overall cost of generation by reducing the proportion of reserve capacity required by generation plants for meeting peak time supply. Several trials and pilots have highlighted a potential 3-12 per cent reduction in generation costs through DSM and DR measures.
Market development and cost benefit
As a result of critical peak pricing, network and generation investments come down to a certain extent. Smart metering also reduces the costs incurred in the investigation of customer complaints pertaining to voltage and quality of supply, faults and emergency lines, testing of meters, cost of network loading studies for network planning, calls related to estimated bills and high bill enquiries, etc. A fall in capacity addition leads to environmental benefits, energy efficiency and low carbon development, thus making smart metering more lucrative.
The South Korean government has announced plans to install 24 million residential smart meters for low voltage customers by 2020. The initiative would result in the creation of an estimated market (smart grid) worth $54.5 billion with an annual saving of around $10 billion in energy imports. The installation would also bring a 3 per cent reduction in power consumption.
Issues and challenges
A robust energy infrastructure based on comprehensive smart metering is essential for improving the efficiency of the power distribution segment. Unlike global utilities, smart metering deployment in India has been limited so far. However, the initial steps that have been taken in this area are encouraging. Since all investments in the power sector depend on the realisation of outstanding dues from consumers, smart metering technologies augur well for the sector.
Based on presentations by Apoorv Nagpal, Consultant, and Vivek Dhariwal, Senior Manager of Emergent Ventures India Private Limited, at the India Smart Grid Week 2015