‘Discoms must use cost-effective model to set up smart meters’

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Updated: February 28, 2021 11:01 AM

At present India loses around 30% of its power generated due to transmission, distribution, billing generation and collection inefficiencies.

Anil Rawal, CEO of IntelliSmartAnil Rawal, CEO of IntelliSmart

Anil Rawal, CEO of IntelliSmart, a joint venture of NIIF and EESL, which is working on a project to implement smart electricity meters across India, tells Vikas Srivastava about the progress of the project. He says, India can save Rs 9.5 lakh crore by investing Rs 1.25 lakh crore for replacing 25 crore conventional meters. Excerpts:

What has been the progress on smart meters after the FY21 Budget emphasised on replacement of conventional meters?
Of the investment commitment by electricity discoms over the last two years including the Rs 3 lakh crore announced in the Budget 2021, smart metering was a major component. The proposed investments may be adequate. There are, however, challenges on the implementation front. Concerns regarding modalities around bidding for smart meters and the Covid-19 pandemic impacted the work on ground. The B2C businesses with direct interface with consumers got badly affected during Covid. The government recently addressed the concerns related to bidding by introducing the standard bidding document. However, adoption continues to be a challenge.

We are currently operating in six states and have an order book of 8 million smart meters out of which we have installed around 1.6 million meters.

What is your business model and how does it help discoms?
We operate on the so-called OpEx model, which is a typical build-operate-transfer (BOT) model, similar to various PPP projects run by the government. In this case we invest the money and install the smart meters without charging any money. Once the meters are commissioned the utilities start saving on the AT&C losses to the tune of Rs 225 per meter per month on an average. We charge anywhere between Rs 75- 100 per meter per month. So these smart meters become an instrument of pay as you save. Under this model the discoms are not investing anything and pay the fees through savings they make.

There are also other players in the field in the country. How is the market for smart metering solutions evolving?
We have various partners who are working with us. We are working with another operator — EDF — in Bihar, In Rajasthan with Bosch, and in UP and Haryana we are working with L&T. They are our contractors and help in executing the projects, while we invest and take the risk. The smart meters are quite regulated appliances because they bear a government of India standard labels which are notified and certified by CEA. So our contract specifically mentions that the meters should be CEA standard compliant.

What is the pricing differential between conventional and smart meters, and how soon the utilities breakeven on the cost?
This is a pay-as-you-save model. The break-even happens the very first day discoms start using the meters. So it is not a question of break-even but return on investment.

At present India loses around 30% of its power generated due to transmission, distribution, billing generation and collection inefficiencies. Implementation of 25 crore smart meters across India would entail an investment of Rs 1.25 lakh crore by discoms. But, they will save around Rs 9.5 lakh crore on losses if investment is done on project finance basis. There is a proven record and data with us to back this claim from 16 lakh smart meters installed by us.

What are the challenges in implementing smart meters?
The discoms are employing the capex model that is not efficient. As they set up few thousand meters on capex mode, it takes away their valuable funds that can be invested into network correction. Small number of smart meters create data islands that fail to serve the purpose of digitalisation. Discoms should break the inertia of resisting the adoption of OpEx model as it can be levered into several lakhs of meters. Here, the investment is done by IntelliSmart that is backed by sovereign wealth fund NIIF.

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