Try and assimilate this. Last year India sold about 1,200 billion kWh of electricity with a billing efficiency of 83 per cent. This means about 200 billion units of electricity was not billed.
If you presume a conservative average cost of supply at ₹5 a unit, that is ₹1 lakh crore of revenue was never billed. In other words, it was revenue lost. Now, can a sector survive with such losses and so much of leakage, asks Saurabh Kumar, Managing Director of Energy Efficiency Services Limited (EESL). All these stressed power assets are also largely because we are unable to bill this ₹one lakh crore and the only answer to this problem is setting up smart meters, he adds.
Taking this head on, EESL started the Smart Meter National Programme (SMNP) in four districts of Uttar Pradesh, some parts of Delhi and three districts in Haryana and replaced nearly five lakh traditional meters with smart meters which were integrated with the IT back-end and a billing software.
EESL, which began as an Energy Service Company (ESCO) promoted by state owned companies NTPC, PFC, REC and Powergrid to service the Central government Ujala scheme, is implementing the project to retrofit over 250 million conventional meters with smart variants. As of now the investment committed for 10 million meters is ₹4500 crore and for covering around 300 million metres it would go up to ₹1,50,000 crore. The project is expected to lead to 80-100 per cent improvement in billing efficiency.
For the consumer it means a certain empowerment over his or her electricity expense. The consumer is aware of the bill, with no scope for wrong readings and billing shocks. But with smart meters, consumers can simply use a mobile app to figure out how much electricity consumption is happening on a real-time basis, explains Kumar.
And since the transition is at no cost to consumers, and it is the distribution companies that have to make a payment of ₹70 a month per meter, smart meters are becoming an attractive proposition. In a sense, the hallmark of the ‘Pay-as-you-save’ model is that there are incentives for everyone.
EESL’s mandate is to procure, install, integrate and manage the smart meter network for seven years. Discoms or distribution companies benefit from zero upfront financial investment, while their payment is through monetisation of energy savings. In fact, the Union Ministry of Power has planned to deploy smart meters for sustainable operations and to try and financially turnaround discoms.
Kumar cites the case of New Delhi and Uttar Pradesh. In the last six months the average increase in revenue per meter in the Capital has been ₹500 and in UP ₹200. In both cases quite substantial. Besides, there used to be a number of disputes after the bill was sent. In UP, almost 40 per cent consumers would dismiss the power bill saying that they did not consume that much and there was something wrong. This no longer happens.
Smart meters have many other advantages as well. Says Kumar, “They have a facility of remote disconnection. So, if you don’t pay on time, I don’t need to come to your premises and disconnect, I can do that remotely. People have been made aware of this. In places like Western UP, the people paying before time has reached 98 per cent. There is no dispute. So, we want to increase the coverage of smart meters in many States and across the country. We are looking at Bihar, Telangana and Rajasthan.”
Pre-paid smart meters
Smart meters are also going to have their variations. The next on the cards are smart pre-paid meters which are very similar to mobile phones and will be introduced in Bihar soon. “So, for the poor man, let’s say, he or she gets a bill for two or three months amounting to ₹1000 which is too much for the pocket. Today, they earn and pay up and charge and use it. They can charge it again say after three days. All these things have never been tried in India, but we are doing it, says Kumar reiterating that for distribution companies the pre-paid system may be ideal. “All your working capital issues go away. You have money upfront.” A large part of the smart meter project is contracted to partner companies for implementation. For instance, EDF, the French major, has been awarded a contract to install and integrate five million smart meters in several States starting with Andhra Pradesh and Bihar. The deployment is likely to take about two years.
A few discoms are also in implementing mode. One of them is Tata Power DDL in Delhi. “As a discom we have secured approval for installation of 7 lakh smart meters and thus far deployed 1.5 lakh and expect to complete this in three years. Of the 1.7 million consumers, 7 lakh would be covered in phase I and the rest would be faster, The deployment could get faster with the Government’s UDAY II scheme,” says Sanjay Banga, CEO, Tata Power-DDL.
With the conventional meter the challenges faced by discoms was in taking manual readings and also possible connivance between the consumer and the meter reader. Kumar feels several problems could be eliminated with smart meters. “We have been hearing about smart meters since 2002 and ₹600 crore was also allocated. The total number of smart meters thus far installed since then was five lakh. This is far less than what we installed in the past six months -- we are today doing about 5000-6000 installations per day and plan to take this up to 20,000 per day,” says Kumar. The smart meters installed so far by EESL will yield a revenue of around ₹2,000 crore.
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