Interview with IntelliSmart’s Anil Rawal: “Improving discom health is the most critical goal”

“Improving discom health is the most critical goal”

To support the government’s smart meter deployment drive, Energy Efficiency Services Limited (EESL) and the National Investment and Infrastructure Fund (NIIF) announced a strategic partnership, forming a joint venture (JV), IntelliSmart Infrastructure Private Limited. IntelliSmart is expected to implement, finance and operate the smart meter roll-out programme of discoms. In an interview with Smart Utilities, Anil Rawal, who recently took over as the company’s chief executive officer, shared his perspective on IntelliSmart’s growth plans for the sector. Excerpts…

Could you tell us about IntelliSmart’s mandate and plans for the power sector?

IntelliSmart Infrastructure Private Limited or IntelliSmart, a JV of NIIF and EESL, has been established to give a fillip to the smart metering programme of the Government of India. This ambitious programme is aimed at installing 250 million smart meters across the country. This will significantly improve the billing and collection efficiencies of discoms and increase their revenues by about Rs 600 billion.

IntelliSmart will enable the implementation of the build-own-operate-transfer (BOOT) business model to expedite the deployment of smart meters. Under this model, the developer procures smart meters at a scale, deploys them and provides operations and maintenance (O&M) for a predetermined project period. The entire capex and opex is funded by the developer, with no additional burden on the discom. This is then recovered from the discom over the project period as lease rental on a monthly basis. This model will adopt the pay-as-you-save (PAYS) approach.

Smart meters will be the foundation of the smart grid programme and will be crucial to meet the challenges of the evolving energy mix and the target of providing uninterrupted 24×7 power supply to every Indian. It will also be a stepping stone towards facilitating the interoperability of electricity service providers in the distribution sector at the retail level.

What are some of the inefficiencies that utilities can address with smart meters?

There will be short-term and long-term benefits with low and high impact on discoms’ or utilities’ business. In the beginning of smart meter implementation, once the data will be available in discom systems, the quick wins would be in the form of improved billing efficiency on a sustainable basis, reduced operational expenditure, fewer complaints from customers and better user experience, and effective outage management.

As the implementation moves to the maturity level, with more data points in the form of smart meters deployed in the field, discoms will observe better demand-side management and optimal utilisation of assets. This will have a cascading effect, resulting in effective load demand forecasting, accurate monitoring of losses and better customer satisfaction, which is one of the key objectives of smart metering. In the long term, discoms will be benefited with enhanced throughput from the discom staff, improved revenues and higher operational efficiency. The power procurement process can also be optimised with all the relevant information available with discoms. Discoms will provide a wider range of services to consumers in terms of prepaid metering and net metering. Smart metering will also contribute to working capital availability for discoms.

What are the key challenges that need to be addressed for expediting smart meter deployments?

It has been observed globally that smart metering provides a range of benefits, from supporting network optimisation and controlling energy consumption to securing cash and cutting non-technical losses. At the same time, managing this transformational effort presents major strategic, operational and technological challenges.

The world has never seen the implementation of smart meters at the scale and size we are targeting and are set to achieve, particularly in view of the fact that there could be varied metering protocols and legacy billing systems among different discoms. It requires an innovative approach with robust IT enterprise architecture, state-of-the-art digital tools and a very efficient and user-friendly customer interface. We cannot just replicate the processes adopted elsewhere in the world as we are in a federal structure with electricity being a concurrent subject. Each discom has unique customer segmentation, billing systems and MIS requirements. This needs working on policy, regulatory, contractual, programme management, digital and organisational capabilities for ramping up this massive programme. We look forward to all stakeholders including state distribution companies, suppliers, investors, digital enablers and our execution partners to work with us and contribute to this mission.

What are your top priorities for IntelliSmart in the next one year or so?

Enabling the smart metering ecosystem including the production of BIS-based smart meters by partners, deploying a countrywide digital platform for achieving smart metering ramp-up, mobilising the required capital investments from domestic and international investors, onboarding distribution companies and consumers for this critical technological adoption, and developing a user-friendly digital interface of smart meters for customers would be the near-term targets. Improving customer satisfaction and the financial health of discoms partnering with them to ensure reliable 24×7 power supply would remain the all-time priorities of this venture.

What is your outlook for the power sector and the smart metering market in India for the next few years?

Power distribution is the most vital link of the power value chain as the discoms are the paymasters for the entire value chain. The financial health of discoms is the key to the well-being of the complete chain. While the country has done exceedingly well in the power generation and power transmission segments, the distribution segment needs concerted efforts by all stakeholders. With power being the lead indicator of growth and the country aiming to achieve 24×7 reliable power supply, improving the health of discoms remains the most critical goal to be achieved.

The rationalisation of operating expenses, management of capital expenditure, and efficient and cost-effective billing and collection mechanisms would enable discoms to resolve cost and efficiency issues and improve revenue realisation. Smart metering will be a very effective tool in driving discoms towards these goals. In the current times of Covid-19, when there is no physical interface between discoms and customers, the smart metering programme has assumed greater importance as it enables two-way communication between the customer and the discom.

Smart meter roll-out will not only improve user experience, discom efficiencies and revenue realisation, but will also have a positive domino impact across the power value chain in terms of financial health.

What are the smart meter deployment targets for the current fiscal?

The current Covid-19 crisis has generated some uncertainty. We are monitoring the Covid-19 situation and government directives. Once the situation stabilises, we will be in a position to work out definitive targets.

What is the communication infrastructure readiness in India for enabling smart meter roll-outs?

The data bandwidth requirements for smart meter applications are minimal and the country has a robust communications infrastructure to support the smart metering programme almost across the nation. Today, 2G/3G services are available pan-India by various mobile communication operators. We are observing more than 98.5 per cent communication availability in various cities where smart meters have been installed by EESL. To generate redundancy in communications infrastructure availability, we are working out solutions for certain areas with lack of reliability. We are also exploring the communications infrastructure based on NB-IoT, designed for M2M communications.

How can utilities tackle the capital availability challenge for implementing smart metering projects?

The focus of the Smart Meter National Programme, spearheaded by EESL, has been to drive efficiencies for discoms, improve revenue management, increase billing efficiency and enhance consumer satisfaction. As stated earlier, under the BOOT model, the capex and opex is funded by the developer upfront, with no additional burden on discoms. It is later recovered from the discoms over the project period as lease fee. This model would work on a PAYS basis as the discoms will be able to pay easily and save well through this programme, which puts no capital burden on them. N