State joint venture to support smart meter rollout in India

A joint venture company is being established to provide the infrastructure to enable India’s distribution companies to accelerate their smart meter rollout.

Press reports indicate that the joint venture under the ministry of power will provide a ‘common backend infrastructure facility’ with a standardised and scalable architecture that the discoms can ‘plug and play’. Such an architecture should simplify the rollout of smart meters by avoiding duplication and enabling the meter data management to be scaled as required.

The JV will be comprised of the four state energy organizations NTPC Ltd, the country’s largest power generation company, the Power Grid Corporation responsible mainly for transmission, the Power Finance Corporation and REC Ltd (formerly the Rural Electrification Corporation).

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Each are reportedly putting in funding of Rs150 crore ($20 million). A debt component of Rs1,400 crore will bring the total available capital to Rs2,000 crore ($271 million).

The facility will be offered to the discoms as a software-as-a-service and they will be charged a usage fee.

India’s national smart metering programme aims to replace 250 million conventional meters with smart meters. Energy Efficiency Services Limited (EESL), the state agency implementing the programme, indicates that almost 1.4 million smart meters have been installed to date.

EESL’s figures show that discoms using smart meters have experienced an average 21% increase in billing efficiency, which is now averaging around 95%, and reduction in losses between 11% to 36%.

The smart prepay option is considered important by Indian discoms to improve revenue collection. However, few have implemented the functionality so far. One of the first states to do so is Bihar, which is running about 25,000 smart prepay meters.

An earlier joint venture named IntelliSmart Infrastructure was formed by EESL and the National Investment and Infrastructure Fund to support discoms with the financing, procurement, deployment and operation of smart metering infrastructure.

EESL’s funding model is a BOOT that requires no upfront capital investment from the discom. Instead the discom repays EESL through the monetisation of savings resulting from enhanced billing accuracy, avoided meter reading costs and other efficiencies.