Macro Economy

‘Smart grids can keep a tab on power rates’

Siddhartha P Saikia Nice (France) | Updated on February 17, 2014

Will enable nation-wide monitoring of power and respond to fluctuations in a jiffy

Implementation of smart grid technologies in transmission and distribution of electricity will help keep a check on increasing tariff rates, feels France-based major Alstom.

This will help emerging economies such as India where electricity tariff impacts household consumers and the manufacturing sector alike. Laurent Schmitt, Vice-President for Smart Grid Solutions of Alstom, said electricity rates would go up by at least two to five per cent in the next couple of years because of a rise in generation cost.

“This will expose more people to higher cost, but smart grid applications will help mitigate the rise in cost,” Schmitt explained.

Several political parties in India including the Aam Admi Party and BJP have promised to reduce electricity rates if voted to power in the forthcoming general elections. However, at present, this is done by way of subsidies (Aam Admi Party has implemented it in Delhi) that impact the Government budget and is not a long-term solution. “The situation is evolving at the level of distribution. This is a clear political will to make things happen. We are going to see more and more distribution networks implementing smart grid concepts,” said Patrick Plas, Senior Vice-President for Grid Power Electronics and Automation at Alstom.

Intelligent electrical network

A smart grid means an intelligent electrical network with two-way flow of energy and real-time information between power generation, grid operators and consumers.

Simply put, this scheme enables nation-wide monitoring of power flow across the grid and respond to fluctuations within a fraction of a second. Real-time data ensures that the supplier can intervene immediately to adjust and match electricity supply to demand. Efficiently managing the network leads to a reduction in transmission losses impact electricity rates.

Cost management will be based on real-time information. Smart grids offer reliable and affordable power with integration of renewable sources into the network. In addition to keep a check on rates, smart grid technology also helps prevent massive blackouts (or failure of grids) such as one faced by India two years back when half of country’s population in 22 States was in the dark.

Smart grid market is realising around eight per cent compounded annual growth rate (CAGR) that would take the market to €51 billion in 2020 from €29 billion in 2013, said Plas. He also added that there could be around 20 per cent savings in capital expenditure by companies after implementing smart grids.

France-based Alstom is a global leader in implementing smart grid technologies. At present, 12 out of the 16 largest power grid operators across the globe, have chosen Alstom’s solution known as e-terra. In India, its subsidiary, Alstom T&D India, has bagged an order worth ₹381.7 crore from the Power Grid Corporation of India Ltd (PGCIL) to supply solutions for improving the grid.

Alstom will equip 34 control centres across India with phasor measurement units that analyse weak spots in the system in real-time and prevent a repeat of the 2012 black out.


At the same time, implementation of smart grids helps integration of renewable energy into the distribution network.

States such as Tamil Nadu, withsubstantial renewable generation capacity, faces difficulty in bringing in such sources to the network because of fluctuations and unpredictable generation from wind and solar projects.

According to the International Energy Agency, India would see about 25 per cent increase of renewables in total load by 2035.

Published on February 17, 2014

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