India’s power distribution sector is at a pivotal moment, as it faces growing energy demand and the need to modernise ageing networks. The sector aims to overcome several structural constraints that inhabit it. Technology is emerging as an important tool to address inefficiencies and improve service delivery.
A persistent challenge in the sector has been the high level of aggregate technical and commercial (AT&C) losses. However, there has been significant progress on this front, with over 32 utilities reporting AT&C losses below the benchmark of 15 per cent, according to the 13th Annual Integrated Rating and Ranking of Power Distribution Utilities.
Transmission and distribution losses and limited real-time visibility into system health have caused operational inefficiency. These issues are further compounded by the challenge of integrating variable renewable energy sources into distribution networks that were not originally designed to accommodate large capacities. Hence, the need to upgrade physical infrastructure and improve network intelligence with advanced digital capabilities is now crucial.
Smart grid and digitalisation
Digitalisation is expected to play a crucial role in improving India’s power distribution system. A key area of focus has been the large-scale roll-out of smart meters that enable automated billing, remote monitoring and granular data collection. The Revamped Distribution Sector Scheme (RDSS) was launched by the Ministry of Power (MoP) to address persistent structural challenges in the sector. As of June 15, 2025, over 223.7 million prepaid smart meters have been sanctioned under the scheme, of which 143.4 million have already been awarded.
Smart meters, as part of the advanced metering infrastructure (AMI), enable real-time consumption tracking, remote disconnection and reconnection, and demand-side management. Most importantly, they provide the data for utilities to identify technical losses and address billing miscalculations. According to the Press Information Bureau (January 2025), the RDSS has helped lower AT&C losses and decrease the average cost of supply-average revenue realised gap.
Private utilities have contributed extensively towards the roll-out of smart meters. For instance, Tata Power Delhi Distribution Limited (TPDDL) has deployed over 4.3 million smart meters, enabling remote monitoring, tamper detection and automated billing. It also integrated these systems with geographic information system (GIS) mapping and supervisory control and data acquisition (SCADA) to improve control systems. Similarly, Torrent Power achieved 100 per cent electronic metering and consumer indexing in Bhiwandi, Maharashtra. This helped reduce losses and billing inefficiencies. It implemented initiatives such as automated meter reading systems for high tension consumers, which were connected to solar plants and captive power plants to a centralised data analysis platform. This ensured accurate energy usage tracking to improve efficiency and reduce energy losses.
Automation in distribution
Automation is increasingly being considered a cornerstone of modern grid operations as it enables higher operational efficiency. In India, the deployment of automation technologies such as fault passage indicators (FPIs), ring main units (RMUs), remote terminal units and feeder remote monitoring systems is gaining traction across urban and semi-urban networks. These technologies are helping utilities move from reactive maintenance models to more proactive, real-time operations.
For example, in March 2025, Schneider Electric and South Bihar Power Distribution Company Limited (SBPDCL) announced an initiative under which Schneider Electric deployed 305 RMUs and 550 FPIs across SBPDCL’s network. The project also included a centralised command and control centre and a disaster recovery centre to ensure grid reliability. This deployment is likely to enable real-time grid monitoring and improved decision-making capabilities for the utility.
In parallel, after taking over Odisha’s discoms in 2020-21, Tata Power invested a cumulative Rs 560 billion to automate systems. It implemented SCADA systems, RMUs, GIS mapping and drone-based inspection tools to monitor grid assets and faults in real time. The company also introduced thermovision scanners and trolley-mounted substations to reduce service disruptions and ensure rapid response to outages.
Automation is also being deployed to facilitate faster fault localisation and service restoration. Auto-reclosures are installed at the feeder and substation levels to help isolate fault zones and reroute power to unaffected areas. This significantly reduces outage times and improves reliability indices.
Distribution automation is particularly critical in dense urban centres where manual fault tracing and switching operations are time-consuming and prone to error.
Further, remote-controlled switchgear and pole-mounted circuit breakers are being installed at key nodes in the distribution network to enhance flexibility and minimise human intervention. These systems are often paired with real-time communication interfaces that feed operational data to central control rooms, which allow operators to respond quickly to anomalies or overloads.
AI and big data
As the digital footprint of utilities grows, it results in the generation of vast volumes of operational and consumer data. This data holds the potential to transform discom operations – from grid maintenance and loss reduction to demand forecasting and customer engagement. Artificial intelligence (AI), big data analytics and machine learning (ML) tools are increasingly being adopted by forward-looking utilities to translate raw data into actionable insights.
Data-driven approaches are also helping identify high-loss feeders and localities with unusually low billing or collection efficiency. Such insights enable better targeting of enforcement drives and infrastructure investments. In addition, AI models are being developed to detect non-technical losses such as electricity theft by identifying usage anomalies, meter tampering patterns and inconsistencies between billed and recorded consumption. Additionally, discoms have deployed pilot projects on analytics platforms that can integrate consumer behaviour data from smart meter readings to enable real-time decision-making. For example, TPDDL adopted AI-based analytics to flag distribution transformer overheating risks and conduct predictive maintenance. The utility also uses ML algorithms to detect non-technical losses such as theft and billing anomalies by analysing smart meter data.
Digital twin technology is also gaining traction. With this, utilities can create virtual replicas of physical assets (such as substations, feeders and transformers) to simulate real-time operations and test grid responses under varying load or fault conditions. This aids in better planning of asset replacement cycles and improves capex returns.
Meanwhile, the MoP’s 13th Integrated Rating and Ranking report (2024) further reinforces the link between digitalisation and improved utility performance. The highest-ranked discoms in the report were those investing heavily in metering, analytics and IT systems.
Additionally, a series of recent policy and regulatory developments have created a supportive environment for the adoption of these technologies. The STELLAR resource adequacy tool, launched by the MoP and the Central Electricity Authority (CEA) in April 2025, can help utilities forecast power demand and plan investments in generation, storage and distribution infrastructure.
Cybersecurity and grid resilience
As digital systems become deeply embedded in the operations of distribution utilities, the risks associated with cyber threats have intensified. The expansion of smart metering, internet of things deployments, SCADA systems and cloud-based analytics has increased the number of potential entry points for malicious actors. As a result, utilities today must deal with a wide range of cyber risks, from ransomware and phishing attacks to more sophisticated threats targeting grid control systems. These vulnerabilities can disrupt essential operations, compromise customer data and cause significant financial and reputational damage. Recognising the growing threat landscape, several government agencies have issued guidelines for the power sector. The MoP has directed distribution licencees to adopt cybersecurity protocols in line with advisories from the Indian Computer Emergency Response Team, the CEA and the National Critical Information Infrastructure Protection Centre. These guidelines include the implementation of firewalls and intrusion detection systems, multi factor authentication and regular third-party security audits.
Some state utilities have taken proactive steps by establishing dedicated cybersecurity cells, conducting periodic drills and integrating cybersecurity as part of their disaster preparedness frameworks. For example, utilities deploying control centres and remote monitoring systems, such as SBPDCL, have also set up disaster recovery centres as part of their digital infrastructure planning to ensure the continuity of operations in the event of a breach or system failure.
Further, utilities are increasingly focusing on access controls, role-based authentication protocols and secure communication channels between field devices and control rooms. With the expected rise in peer-to-peer energy trading and virtual metering in the future, ensuring transaction integrity and data security will only grow in importance.
Future outlook
The integration of smart metering, automation and data-driven tools is not just improving network performance but also presents an opportunity to redefine how discoms engage with consumers, manage assets and respond to emerging challenges such as load variability and decentralised generation.
As per Deloitte’s 2024 Global Power and Utilities Outlook report, utilities worldwide are transitioning from infrastructure-heavy models to digitally enabled ecosystems that prioritise resilience, agility and consumer choice. Indian discoms have also embraced this shift, backed by central schemes, regulatory reforms and state-level innovation.
Going forward, the focus must remain on scaling successful pilot initiatives, ensuring the interoperability of digital systems and strengthening in-house capabilities.
Ultimately, the success of these emerging technologies will depend not only on their technical deployment but also on the sector’s ability to align digital investments with institutional reform and capacity building. With continued policy support and stakeholder collaboration, India’s distribution segment is well positioned to deliver more reliable, efficient and consumer-centric power in the years to come.
Mohammed Ali Siddiqi
