Editorial Notes

[Editorial Notes] How smart metering infrastructure can help distressed power sector?

When electricity demand is expected to rise by 95% by 2030, India’s power sector is marred with high Aggregate Technical and Commercial (AT&C) losses.
By IASToppers
September 03, 2020


  • Introduction
  • AT&C losses in India
  • What is Smart Meter?
  • Smart Grid as a solution to AT&C losses
  • Challenges of implementing Smart Grid
  • Suggestions
  • Way Forward
  • Conclusion
  • IT’s Input
  • Smart Meter National Programme (SMNP)

How smart metering infrastructure can help distressed power sector?

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  • Electricity demand is expected to nearly double by 2030, but high aggregate technical and commercial (AT&C) losses adversely affect the sector.
    • AT&C loss: Combination of energy loss (Technical loss + Theft + inefficiency in billing) & commercial loss (Default in payment + inefficiency in collection).
  • The reliance on postal services in sending bills to customers, delayed payments, and collecting tariffs from inaccessible geographical locations has prompted a need to look for an alternative.

AT&C losses in India

  • AT&C losses are major contributors to overall power losses in the sector. As a result, distribution utilities in India lose almost 72 paise per unit of electricity they purchase.
  • India aims to cut AT&C losses under 12 % by 2022 and below 10 % by 2027. The losses are currently pegged at 20 %.

What is Smart Meter (SM)?

  • An electric Smart Meter collects data on energy flows, power and voltage levels at the customer’s premises, and then send those data to energy supplier.
  • In turn, energy supplier uses that data for both managing the electric grid network (e.g., controlling network losses) and providing retailers data for billing & customer management.
  • SM are part of the overall Advanced Metering Infrastructure solution (AMI) that records consumers’ electricity usage at different times of the day and sends it to the energy supplier.

Smart Grid as a solution to AT&C losses

  • Smart-grids are digitally augmented electricity grids which automate the complexities on the supply as well as the demand side of electricity.
    • Smart grid = Allows electricity data transfer between utility and Smart Meter located at consumer’s house.
  • India is transforming its energy mix by installing more non-fossil fuel-based energy generation technologies. Smart grids are entrusted to both integrate renewable energy and reduce AT&C losses.

Benefits of Smart meters

  • Using smart meters can result in an efficient way to manage electricity by checking data entry errors and cutting costs of manual metering.
  • Moreover, from the utility’s perspective, the major driver for pushing towards smart meters is the reduction in AT&C loss.
  • Unlike regular metering, it enhances consumer satisfaction through better complaint management, system stability, reliability and transparency.
  • AMI benefits electric customers by detecting meter failures early and hence, faster service restoration. AMI also allows for time-based rate options that can help customers save money.

Other Benefits include:

  • Enhances quality management of distribution and transmission in terms of voltage control, monitoring and control,
  • Help in fulfilling renewable energy targets,
  • Enabling new products services, markets and customer choice,
  • Reducing operation and maintenance costs.
  • Mitigates potential threats on the grid by cyber-terrorist networks.

Challenges of implementing Smart Grid

  • High upfront cost of advance metering infrastructure projects: Union government has targeted to install SM in all households within 3 years. The high cost of installation may hamper it. 
  • Hindering Software integration with the new system: As India is driving towards implementing pre-paid smart meters, the difficulty in shifting from the existing post-paid model to pre-paid needs to be managed. Likewise, communication technology (between smart meters and main control system) preference could hinder the roll-outs of smart meters.

Other challenges include

  • Utility’s ability to take up such projects on CAPEX (Capital expenditures) model
  • Establishing a strong business case for smart meter investments
  • Full benefits of smart meters going unrecognised by cyber-security and data analytics


  • For communication to main control system from SM, the choice between the usage of General Packet Radio Service (GPRS) or radio frequency should be analyzed based on the geographical location and feasibility.
    • GPRS allows data to be sent and received across 2G/3G cellular network.
  • Human resources must be ensured that they can adapt to technology change and the lack of knowledge in handling the software.
  • Government could take away electric utility companies routine functions when the system gets automated (after installing SM). This should be handled with care as it could provoke resistance to new technology.
  • Communication with the consumers and addressing the knowledge gaps about the importance of smart meters must be give high priority.

Way Forward

  • Once these challenges are addressed, there are value-added scenarios that the smart meter brings in such as-
    • Time of Day tariff feature: Allows consumers to reschedule electricity usage to the off-peak hours and reduction in the bill amount significantly could be a future possibility along with the demand-response programme.
    • With renewable energy growth in distributed generation, net metering provision comes along with smart meters.
      • Net metering: An electricity billing mechanism that allows consumers who generate some or all of their own electricity (i.e, by solar power) to use that electricity anytime, instead of when it is generated.


  • Modernizing India’s grid system by investing in AMI promises to mitigate a number of strains placed on the grid due to growing demand for electric, gas and water resources.
  • Although Smart meters have been in existence around the world for a long time, India lags behind.
  • Hence, there is need for the realization of the importance of establishing AMI to enable two-way communications with customers, remote meter reading for error-free data, identifying network problems etc. as well as filling up the loopholes in the overall structure in order to solve some of the power sector’s problems.

IT’s Input

Smart Meter National Programme (SMNP)

  • It is an initiative of by Energy Efficiency Services Ltd (EESL).
  • Aim: To replace 25 crore conventional meters with smart meters in India.
  • Total project cost: 1500 billion, which include the direct cost of purchase, and hand-holding over 10 years.
  • 1.54 lakh smart meters were installed across India under this initiative.
Mains 2020 Editorial Notes

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