NEW DELHI • India is aiming to help its ailing power distribution companies by buying five million smart meters for two of its northern states in a global tender to be conducted later this month.
Energy Efficiency Services Ltd (EESL), the government agency responsible for running the country’s energy efficiency programmes, will conduct the tender, MD Saurabh Kumar said in a phone interview.
“This is a pilot project where four million smart meters will go to Uttar Pradesh and the rest to Haryana,” Kumar said. If successful, the programme could be adopted by a large number of states, he said.
For India, smart meters represent a possible game changer by handing power distribution companies the ability to address billing inefficiencies that have contributed to their losses and debt burden. Global investment in the technology is expected to hit US$19 billion (RM81.51 billion) this year, according to research from Bloomberg New Energy Finance (BNEF).
A smart meter is an electronic device that records electricity consumption at short intervals and communicates it back to a utility for monitoring and billing. The devices are capable of two-way communication.
An information meeting ahead of the tender will be held on Aug 20 in India’s capital of Delhi, while a second session will take place in London on Aug 24.
Most of India’s power distribution companies, or discoms, lose money on every unit of power sold due in part to theft, inadequate billing and selling below cost to poor and agricultural consumers. State-run distributors held a combined debt of 4.3 trillion rupees (RM288.1 billion) as of September 2015, the latest year of available data.
The debt levels limit their ability to adequately meet the power demands of existing customers or add new consumers in a country where millions of households don’t have electri- city, but where power plants also remain underutilised.
The average technical and commercial losses at discoms in 24 states who’ve signed up under a reform plan currently stand at 21%, according to the government.
“We have committed to raising billing efficiency, which means monetising the cost required to bill and also resolving inefficiencies like under or inadequate billing, thereby increasing revenues for the discom,” EESL’s Kumar said.
Last year, the Indian government said it’s aiming to outfit approximately 35 million customers with smart meters by the end of 2019.
“Considering that there are one million to two million meters installed as of today, this would require an installation ramp-up faster than any country except China,” said James Sprinz, a Vancouver-based
analyst with BNEF.
BNEF’s forecast is for India to have installed 15 million meters by 2020.
“If we were to see a number of large utilities announcing large procurements then this might alter the forecast but currently I think it looks reasonable,” Sprinz said.
In terms of market size, BNEF estimates a cost of US$73 per installed meter, which is toward the lower end of global costs. Due to the low costs and limited installations, BNEF expects India’s market position to fall somewhere between third and sixth in Asia in the next three years to four years.
Smart-meter assets have be- come attractive to bidders in recent years ahead of a European Union goal to replace at least 80% of electricity meters with smart meters by 2020 in a drive to reduce emissions. — Bloomberg