Smart Grids in India: Separating Hype from Hope

Smart Grids in India: Separating Hype from Hope

Why Indian Smart Grids Make Sense

What are Smart Grids? There is no single technology or design, but these are a general term for the transformation of the power grid using digital communications and control to enable functionalities such as increased awareness, resiliency, flexibility, efficiency, and enhanced renewables integration.  Definitions and functionalities abound, but for India, the killer apps are likely to be different.  In the West, labour costs for meter reading and connections/disconnections have been one driver, in addition to pressures due to renewable energy and electric vehicles, as well as concerns on handling the peak on aging infrastructure.  In India, the short-term needs include reduction of losses (both technical and financial) and keeping the grid in balance (especially given shortfalls).  Focusing on these applications, and viable price points, will make or break Smart Grids in India.

Theft reduction is important, but the scope, on an average, may be about 13 to 15 per cent, without grid upgrades to reduce technical losses (which are higher than in comparable countries).  In contrast, the demand is expected to grow several hundred percent over the coming decades.  Todays challenge is meeting the peak load, due to which outages (feeder level load-shedding) are common, and load management will be very important for a power-deficit nation.  Instead of load-shedding, can all consumers not be guaranteed a minimum supply (e.g., 100 watts or 200 watts, enough for lights and a fan), even during deficit periods? If they want more, they could then pay a small surcharge (with regulatory approval).

Its important to recognize that Smart Grids are only a means to an end, an enabling infrastructure (one could provide 50 watts or 300 watts as lifeline if one wished).  You also dont need a Smart Grid to cut down theft.  In a few Indian utilities, professional operations and political will have worked. But Smart Grids make it much easier to reduce leakage.  Its not as if the utility doesnt know what is going on and where. But now one can have irrefutable data, instead of ad hoc and assumption-based calculations.
Why Smart Grids Can Now Succeed in India

Today, Smart Grids in India have become a distinct possibility, instead of a science experiment.  The new Narendra Modi government has announced a vision for 100 Smart Cities.  Importantly, over the last five years, India has moved ahead from What is a Smart Grid? to What does it mean for India? (partially answered) to How do we do it? Yes, there has been hype (e.g., the cover of a business magazine showing the Badshah [emperor] of Bollywood,  Amitabh Bachchan, with a Smart Meter), but there has been consistent (even if sometimes slow) steps towards Smart Grids, including the recent National Smart Grid Vision and Roadmap.

The technology has also improved over the last few years with standards for many components.  While ongoing, such efforts have led to solutions that take far less customization than before.  Its not an off-the-shelf solution (yet) but price-performance points are now becoming interesting, even for a price-sensitive nation like India (where the median household electricity bill is only a few US$/month).   Indias IT skills are also world-class, and labor costs are low. In France, the national utilitys pilot showed smart meter installation costs of over 40 euros!

Probably the greatest reason these can work is a willingness to change people are sick of business-as-usual.  The government recognizes the issue of utility losses (many billions of dollars per year), and consumers hate losing power and paying for back-up power (also to the tune of billions of dollars per year).  This has an impact on GDP growth reportedly of several percent.  In the U.S., to save a dollar or two per month, consumers may not get that excited (what I call the Smart Grid Slice of Pizza Syndrome), but in India, if you tell consumers that with modest modifications to their usage patterns, they can save Rs. 50/month (with time of day pricing), or avoid outages, many will jump at it.  Modest? They already face extreme (involuntary) engagement with the grid most lose power weekly if not daily, and expensive back-up power only covers part of their load.
Costs, alternatives, and options

If you think education is expensive, try ignorance Derek Bok.

Certainly a Smart Grid has costs, but what are the alternatives? Load-shedding is artificially cheaper (as utilities avoiding buying costly peaking power) but this just passes the burden on to consumers.  Just imagining smart meters as avoiding meter reading costs (which are low in India) is a false comparison, or rather, can be considered Parmenides Fallacy (comparing the future to the present, instead of alternative futures).  With a smart grid, not only is meter reading far more accurate, one can get load profiling, outage detection, theft detection, time of day pricing, and congestion planning as well.

To end load-shedding, one option that has worked well is the Gujarat Model which included rural feeder separation (which itself has costs).  However, some of the other states that tried something similar achieved less stellar results.  This is because of inherent differences in consumer profiles, availability of supply (generation), and sheer political will.  A smart grid isnt an alternative to that it is the next step where separation and granularity isnt just at a feeder level, but can be down the household level.


Source: Brookings

SMART GRID Bulletin March 2017


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