100% smart metering trips on target and funds
Power ministry has been planning it for two years, but with limited success
The proposal for smart prepaid metering across the country in three years, announced in the Union Budget last week, has been hailed by the power industry. But, the initiative is not new. The power ministry has been planning it for two years but with limited success. At the same time, many hurdles await the ambitious plan.
In her Budget speech on February 1, Nirmala Sitharaman said, “The ministry intends to promote smart metering. I urge all states and Union territories to replace conventional energy meters with prepaid smart meters in the next three years.”
Two years earlier, R K Singh, Union Minister for Power, said his ministry was planning to convert all meters in the country to smart prepaid meters. In an interview to Business Standard in 2018, Singh had said he would mandate state-owned power distribution companies (discoms) to switch to smart prepaid meters.
“Smart, because we are aiming at ‘time of the day’ tariff. Prepaid, because it improves bill collection and efficiency. It is pro-poor as well. Consumers can charge as many times as they wish. They will not face disconnection. It is good for discoms as they will get payment in advance,” he had said then.
Since then, 400,000 smart meters have
been installed to date in Uttar Pradesh, Delhi, Haryana, Bihar, and Andhra Pradesh. These were by Energy Efficiency Services mandated for smart meter tendering to private companies. Close to 5 million were tendered in the first round.
Responding to the announcement in the Budget, the Indian Electrical and Electronics Manufacturers Association (IEEMA) said this was a positive step and the industry would fully cooperate in meeting the target.
“Installing smart prepaid meters will improve the cash flows and revenue of discoms. Going by the government’s commitment to promote Make In India, it should also ensure indigenous meter makers are preferred over imported ones. With smart prepaid meters come data and cybersecurity risks. Hence, indigenous products should be given priority,” said Sunil Mishra, director general, IEEMA.
Despite the ambitious target, there is, however, no budgetary allocation or grant to smart metering in the Union Budget.
Praveer Sinha, chief executive officer and managing director for Tata Power, called smart metering push a ‘knee-jerk reaction’. “The government needs to first address distribution reforms. Smart meters on their own will not give much benefit,” said Sinha. Once other distribution-related technologies are in place, smart meters will bring great value, he added.
Several industry players also highlighted that the investment needed under this ambitious plan would come from the private sector and hence, there needs to be a comprehensive policy.