Smart Meter National Programme (SMNP)

Context: Energy Efficiency Services Limited’s (EESL’s) Smart Meter National Programme (SMNP) is working to eventually replace 25 crore conventional meters with smart meters across India.

Analysis

  • The Ministry of Power has decided to convert all existing and new meters to smart and pre-paid meters within the three years starting from April 1, 2019.
  • In October 2019, National Investment and Infrastructure Fund (NIIF), India’s version of a sovereign wealth fund, formed a joint venture with Energy Efficiency Services Ltd (EESL) to implement, finance and operate the smart meter rollout programme.
  • EESL, a PSU under the Ministry of Power, is the designated agency to implement the smart metering programme in India to enhance consumer convenience and rationalise electricity consumption.
  • EESL’s proven model of bulk procurement, aggregation of demand, and monetisation of savings will be the approach to roll out smart meters.
  • This roll-out is proposed under the Build-Own-Operate-Transfer (BOOT) model, wherein EESL will undertake all the capital and operational expenditure with zero upfront investment from states and utilities.
  • EESL will therefore, receive a nominal Internal Rate of Return that is reflected in a mutually agreed upon, automated payback structure.
  • Along with enhancing energy production, the nation also needs to cut Aggregate Technical and Commercial (AT&C) losses to below 12% by 2022, and below 10% by 2027; which by various estimates are around 20% at present in India’s case.
  • Enabling India to achieve this imperative is the smart grid, the first step of which, is the creation of Advanced Metering Infrastructure.

What are Smart Meters?

  • A smart meter is a digital one that replaces old analogue meters.
  • Digital meters can transmit energy consumption information back to the utility at much more frequent intervals and can potentially enable monitoring of consumption more accurately, thereby enabling more informed energy choices.
  • Smart meters can help discoms function smoothly, thanks to their ability to remotely “monitor and collect meter readings.”
  • Based on the GPRS technology, these meters will boost efficiency in billing and collection.
  • Smart meters measure and record consumer’s electricity usage at different times of the day and send this information to energy supplier through over-the-air communication technology.

    Smart meters can also help discoms to:
  • Reduce AT&C losses; Aggregate Technical & Commercial losses are combination of energy loss (Technical loss + Theft + inefficiency in billing) & commercial loss (Default in payment + inefficiency in collection).
  • Improve their financial health,
  • Incentivise energy conservation,
  • Enhance ease of bill payments,
  • Doing away with the paper bills,
  • Reducing meter tampering by consumers, and
  • Ensure billing accuracy by getting rid of manual errors in meter reading through web-based monitoring system.
  • EESL is also implementing smart prepaid meters under its smart metering programme.
  • Smart meters deployed [can] switch to prepaid mode with a remote button click.
  • ‘Smart’ metering also gives consumers the freedom to choose the supplier and rate as per their requirement.
  • Customers will also benefit from accurate bill readings, and real-time understanding of their electricity usage, catalysing a pan-India movement towards energy efficiency.

Smart Pre-paid Meters

  • The whole idea of a prepaid meter is to eliminate theft and prevent tampering.
  • Prepaid meters have been envisaged as one of the ways to turn around discoms by reducing their gap between the cost of power supply and revenue realised by ensuring timely payments from bulk consumers such as local civic bodies and state government departments.
  • Mounting dues of government departments have been a long-standing cause of concern, which is about 85% of the amount that discoms owed to power generators.
  • In cases of prepayment, the carrying costs will come down, leading to reduced requirement of working capital for discoms.
  • The National Electricity Policy, in 2005, had stated that the SERCs should encourage use of pre-paid meters.

Net metering

  • Net metering allows residential and commercial customers who generate their own electricity from solar power to feed electricity they do not use back into the grid. 
  • If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods where the home’s electricity use exceeds the system’s output. Customers are only billed for their “net” energy use.
  • Typically, a solar power system produces more energy in summer and comparatively less energy in winter.

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