Future of Electricity is Digitization
Published on September 29, 2019
Electricity being one of the most critical components for sustained economic growth in India, Government has made sustained efforts in not just setting up ambitious targets but also achieving some significant milestones such as:
1. India’s rank jumped to 24 in 2018 from 137 in 2014 on World Bank’s Ease of doing business - "Getting Electricity" ranking.
2. Energy deficit reduced to 0.7% in FY’18 from 4.2% in FY’14.
3. 100% village electrification achieved under Gram Jyoti Yojana (DDUGJY).
However, in spite of the massive achievements, the Government’s biggest area of concern is the worsening financial situation of state distribution companies. The aggregate dues of Discoms to electricity generating companies are expected to be around Rs 41,000 crore ($5.7 B). Saurabh Kumar, MD of Energy Efficiency Services Limited (EESL), has recently quoted “₹1 lakh crore (~$ 14 B) of revenue is never billed”. This is one of the biggest factors in aggregate Technical and Commercial Losses accounting to almost 20% against a target of 15% by March 2019. This challenge is humongous and also extremely critical to resolve.
The situation demands a program for digitizing the complete distribution chain and leveraging the most advanced technologies such as data analytics, cloud and Artificial intelligence. This initiative of executing largest digitization programs is being led by EESL in partnership with other state utilities of building Advanced Metering Infrastructure (AMI) for 300 million consumers amounting to almost ₹1.5 lakh crore (~$21 B) investment. This program includes deployment of smart meters at the consumer level which will be providing real time information through a wireless network (RF Mesh/ 3G/4G or NB IOT) to a centralized platform hosted on Cloud. The platform consists of Head End System (HES) which aggregates encrypted data and control signals from smart meters and manages event logs. This data is further utilized by Meter Data Management System (MDMS) which performs complete data analytics using AI and integrates with other systems like billing, customer care, fault management and data analytics for Utility and grid management.
EESL has already awarded execution projects for 10 Million meters out of which 0.6 million have already been deployed by Larsen and Toubro under an EPC contract. This project is one of the largest rollout of IoT that leverages data analytics and AI in the country. The program is already helping in cutting down theft, errors in meter readings, inefficient billing and collection, collusion of utility staff and consumers. In addition, the availability of real time data helps faster service restoration, power quality monitoring, distribution network optimization and generation of asset utilization reports. Alerts for Meter tampering and abnormality in consumption pattern is also analysed and immediate action is triggered, bringing transparency in complete distribution and service delivery chain.
The future of digitization of electricity is very promising for all the stake holders including power generating, transmission, distribution companies and consumers. Some of the upcoming opportunities following AMI deployment are:
1. Net Metering- Government has initiated a program for generation of 40 GW by setting up solar panelled rooftops by 2022 and additionally reducing the energy storage (batteries) costs through indigenous manufacturing. This program will transform consumers to prosumers (producer-consumers). This distributed and decentralized renewable power program is hugely transformational business model which will help consumers to pay for net balance between the power consumed and the power contributed back to the grid. The digital infrastructure of AMI will be the biggest enabling factor in this transformation.
2. Pre-Paid Metering- The integrated real- time chain of power consumption and billing with the ability of remotely disconnecting the consumer will help utilities in avoiding the losses on account of unbilled units and thereby managing the cash flow better. As evident from the huge success of Mobile prepaid market this model will also immensely help the consumers who cannot afford one- time payments of thousands due to delayed billing after a couple of months. Such consumers will prefer to buy smaller daily / weekly prepaid packages based on usage.
3. Consumer data analytics- In its current form, the deferred itemised bill (monthly or quarterly) does not enable the consumer to analyse and optimize their consumption patterns. The AMI will provide real- time analytics through mobile apps, hourly/ daily/ weekly appliance- wise energy consumption reports, alerts on irregular consumption and intelligent decision support. There are many successful global companies like SENSE, CURB, VERV that focus on solutions delivering home energy monitoring and real- time analytics along with the neighbourhood usage comparison which help in optimizing the consumption significantly. Even in India, Sustlabs, a start- up incubated in IIT Bombay is working on data analytics and AI solutions for home energy consumption. As per Kaushik Bose, Founder & CEO of Sustlabs, intelligence analytics will be provided real time for not just the consumption of energy but also for the health monitoring of home appliances. Such start-ups are keen to partner with organizations like EESL in realizing this model in India.
4. Non Electricity revenue for Utilities- Digitization of the complete chain leveraging big data, cloud, AI and block chain will help in providing huge opportunities for power utilities to collaborate with business establishments like
a. Service providers (e.g. Urban Clap) that can provide appliance- wise health monitoring packages directly to consumers
b. Appliance manufacturers in partnership with micro-financing companies and insurance companies can provide better propositions to consumers through more energy efficient products.
Partnerships with business establishments will help generate new non- electricity revenue opportunities for power utilities.