Smart Meters in Rural India a Win-Win Soln for All: ADB

ADB decided to support a USD 200 million loan for Energy Efficiency Services Limited (EESL) to implement various demand-side energy efficiency projects in India.

International development finance institution Asian Development Bank (ADB) is mulling to scale up satellite communication technology based smart meters projects as it finds it to be a win-win solution for various stakeholders, including consumers as well as local discoms.

ADB’s Yongping Zhai, Chief of Energy Sector Group, Sustainable Development and Climate Change Department, said in a blog that, “ADB decided to support a USD 200 million loan for Energy Efficiency Services Limited (EESL) to implement various demand-side energy efficiency projects in India. One of the pilot projects has recently been completed in Gangapur, a rural village in Varanasi, Uttar Pradesh, where EEESL installed smart meters with satellite communication technology in about 5,000 households and ADB is considering scaling up through a proposed second loan.”

“We have observed that smart meters bring benefits to four key stakeholders,” he added.

First, each rural consumer enjoys improved power quality, shorter outage durations, and flexible payment options (pre-paid or post-paid), Zhai said.

He further added that, smart meters also provide real-time information about the electricity usage through a mobile app, so consumers can detect any wastage and optimise electricity consumption to save money.

They also prepare rural households ready for the distributed and decarbonized future of energy systems.

When more rural households install distributed solar photovoltaic panels on their rooftops, smart meters can be used as “net metering”, i.e. surplus solar power is transferred to the grid, allowing customers to offset the electricity bills, he said.

Also, smart meters can be used for time of use tariffs, allowing different tariffs for day and night.

On discoms, Zhai said, “This helps local distribution companies improve their billing and collection efficiency and thus reduce aggregate technical and commercial losses from around 30 per cent to 15 per cent.”

Besides, they can predict power purchase requirements more accurately, and optimal usage means less power needs to be purchased during peak hours.

He further said that, smart meters are affordable. Each one costs about USD 35 to buy and another USD 35 to deploy for 5 years. This is fully paid as an initial investment by EESL, which in turn gets Rs100 (USD 1.3) per meter per month from local distribution companies out of savings realized over the expected eight-year lifespan of each device, generating a 14 percent return on equity for EESL.

Zhai termed it as an innovative business model (“invest-own-operate”) that can be replicated elsewhere in India and many other developing countries that suffer from high system losses, as it does not burden local distribution companies upfront.

According to Zhai, smart meters benefit the whole society through reduced carbon emissions and positive environmental impacts.

EESL’s smart metering initiative is part of a larger low-carbon energy transition program by the Government of India. This program is promoting smart meters in 17 towns in Uttar Pradesh and Haryana and expanding to other parts of the country, where it is expected to create many local jobs.