Economy and industry observers would perhaps unanimously concur that the current central government's agenda is striking the right chords. For India's power sector, what ought to be music to their ears is the government's promise to substantially augment power generation capacity and deliver 24 hour uninterrupted power supply to all houses by 2022.
Setting ambitious targets to augment power generation capacity is important for a country where tens of thousands of villages are still without an electricity connection. As the nation's economy grows, electricity consumption by industrial and residential users will increase. Providing adequate generation capacity therefore becomes an important priority to meet the promise of 24-hour, uninterrupted electricity.
Yet, setting up new power plants is an expensive proposition, with high financial and environmental costs. Adding new power generation capacity is not the only means of providing reliable and uninterrupted power to all users. A pragmatic power policy balances the capacity increase with the reduction of avoidable losses from transmission and distribution (T&D). These losses correspond to technical losses from inadequate transmission infrastructure; commercial losses from electricity theft, inaccurate metering and tariffs that are kept artificially low.
Electricity across India is served by about 70 power utilities and the majority are state-owned. Many utilities are struggling to remain operational with ever-mounting losses. The total accumulated losses are reportedly nearing R2.5 lakh crore. Revenue losses can be reduced by adopting smart metering technologies, which limit T&D losses.
Smart meters allow utilities to remotely identify and collect data from every meter and provide an effective means of curbing power theft and reducing unaccounted power usage. Utilities that employ smart metering can also encourage responsible power consumption by offering time-of-use-based tariffs. For example, lower tariff for off-peak hours would encourage households to use heavy appliances then.
The net outcome is a win-win for consumers and utilities. The ability to track all existing meters and their usage enables the utility to raise timely and accurate bills. The resultant revenue assurance is a strategic payout, as utilities financial health improves, they are able to reinvest in infrastructure to ensure uninterrupted and affordable electricity for all consumers.
Progressive countries around the world have shown an active interest in adopting smart meters. In Europe, Sweden has moved 100% to smart meters, while the French government has approved the implementation of 35 million smart meters by 2018. Over 40 million smart meters have been installed in Italy, while the UK's department of energy and climate change aims to roll out 53 million smart meters by 2020. The US utilities targeted installing 15.5 million smart meters through 99 pilot projects nationwide, initiated in 2009. But the leader in smart meter adoption is China, with over 250 million smart meters installed.
In India, the Union power ministry under the previous regime had provided a smart grid adoption road map, envisioning a national smart grid rollout by 2027. The new government with a defined focus on fast-tracking of major infrastructure projects, may choose to further compress this time-frame in the proposed National Energy Policy.
From a policy perspective, a push for streamlining electricity distribution could help power infrastructure modernisation; for what we now need is infrastructure that is future-ready for sustained economic growth over a long period of time.
Source: Financial Express
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14 June 2017