India, the third largest producer and consumer of electricity (350 GW) with increase in per capita consumption (1,150 kWh), is still struggling with high Aggregate Technical & Commercial (AT&C) losses. Renewables constitute onethird of total installed capacity and 15 per cent of total generation, and this has compounded the loss problem as consumer turns producer. Even with surplus capacity, India is unable to supply affordable electricity to all the needy.
The Ministry of Power, Govt. of India, correctly identified implementation of Advanced Metering Infrastructure (AMI) to be the first step towards realising Smart Grids that can significantly increase the efficiency of energy usage. With AMI, meters communicate on a real-time basis with distribution companies enabling remote meter reading and prompt identification of network failures and energy pilferage, thereby reducing response time and improving the quality of networks and services.
In India, power is a concurrent subject but distribution belonged to the states. Implementation of AMI has not been easy for the state governments: in spite of sincere attempts by utilities, the states failed to show results.
In 2017, the centre realised that a change of implementation strategy is required. After pilot exercises, learning, and improvisation, today, we see a success story and a dawn of a new era with large-scale deployment of smart meters underway in our country! We also show the role of communication technology – Narrowband Internet of Things (NB-IoT), in the successful rollout of AMI in India.
Challenges that Indian Utilities faced with AMI
Earlier, Indian utilities experimented with the old generation AMI technologies and failed to show results. The major challenges that older AMI technologies presented were:
• Recovery of high Capital Costs
• Increase in Complexity
• Lack of Standardisation.
Since these challenges remained unaddressed, none of the utilities in India could effectively connect, operate, and maintain an AMI based grid system. Without a fully operational AMI system, utilities found it difficult to reduce their AT&C losses and justify the investments made in AMI. Thus, AMI was viewed by many as a heavy financial burden that cannot be recovered. Though AMI can improve the billing efficiency from 80 per cent to 100 per cent and increase DISCOM revenues by Rs 1,10,000 crore, this potential remained untapped.
The MoP understood the challenges being faced by the states and decided to help replace 25 crore conventional meters with AMI in the next few years. They knew that with AMI, billing efficiency can increase DISCOM revenues by
Rs 1,10,000 crore. But this was easier said than done.
First, the centre had to form different bodies to promote AMI. These bodies experimented with pilot implementations, learnt and improvised. They realised that tried-and-tested technologies of yesterday have approached the end of their reign and decided to drop them. They eventually standardised to an AMI that is driven by a communication technology that delivers true inter-operability and insensitivity to disturbances from other systems. Here, we refer to the ‘NB-IoT’ communication technology driven AMI as ‘smart metering infrastructure’ and the meters used therein as ‘smart meters’.
The reservation of the term ‘smart’ is necessary since it has been used, elsewhere, even for ‘non-smart’ goods. Even in the energy meter sector, the Automatic Meter Reading (AMR) segment that had a big market from 2005 to 2015 was wrongly categorised as ‘smart’. AMR technology simply enables collection of consumption data from the meters and transfers it to a central database (in the utility station) essentially for billing purposes. It was less costly when compared to AMI, and hence, had a bigger market share. Today, with deployment of Narrowband Internet of Things (NB-IoT) based AMI technology in different countries, the scenario is rapidly changing and AMR communication is no longer considered as ‘smart’.
Indian Initiatives promoting Smart Metering
India Smart Grid Forum (ISGF)
To achieve accelerated development of smart grid technologies in the power sector, India Smart Grid Forum (ISGF), a Public Private Partnership initiative of Govt. of India (GOI), was set up with a mandate to advise the government on policies and programs for the promotion of Smart Grids. ISGF is working closely with government institutions CEA, CPRI, CERC, ministries MNRE, state governments, SERCs and utilities.
Energy Efficiency Services Ltd (EESL)
EESL is the world’s largest public energy service company (ESCO), and a joint venture of state-owned NTPC, PFC, REC, and POWERGRID. EESL was formed to facilitate energy efficiency projects and innovative business and implementation models. With a net worth of over Rs 214.4 crore, EESL has successfully implemented projects such as UJALA LED lamps, street lights and smart agricultural pumpsets.
With regard to AMI, EESL has been helping utilities reduce billing inefficiencies through ‘Smart Meter National Programme’ (SMNP), that aims to replace India’s 250 million conventional meters with smart meters. The smart meter procurement had commenced from November 2017 and EESL has installed over a million smart meters in Uttar Pradesh, Delhi, Haryana, Bihar and Andhra Pradesh.
EESL has a proven model of bulk procurement, aggregation of demand, and monetisation of savings. The roll out smart meters is under the Build-Own-Operate-Transfer (BOOT) model, wherein EESL undertakes all the capital and operational expenditure with zero upfront investment from states and utilities. EESL recovers the cost of these meters through the monetisation of energy savings, resulting from enhanced billing accuracy, avoided meter reading costs and other efficiencies. EESL, on its investment, earns a nominal Internal Rate of Return (IRR) through a mutually agreed automated payback structure.
IntelliSmart Infrastructure Pvt Ltd (IntelliSmart)
EESL, recently set up a new Joint Venture – IntelliSmart Infrastructure Private Limited or simply ‘IntelliSmart’, under the administration of MoP and National Investment and Infrastructure Fund (NIIF), to implement the smart meter roll-out program of power distribution companies. IntelliSmart is working collaboratively with all stakeholders to procure, deploy and provide operations and maintenance for the smart meter infrastructure.
EESL has secured contracts for IntelliSmart to install and maintain over 10 million smart meters across various state utilities. IntelliSmart is expected to work alongside EESL to scale this up further.
Earlier Experiments in AMI
In our earlier paper we have described different case studies such as deployment of 10 million pre-paid meters for deployment in Uttar Pradesh in 2017 under ‘Saubhagya’ scheme, with an aim to add more than 40 million BPL households by December 2018. Also, the deployment of 1 million smart meters in Haryana under the Ujwal DISCOM Assurance Yojana (UDAY) scheme and the rollout of 0.3 and 0.2 million smart meters, in Varanasi and Lucknow respectively in 2018. UP planned to install a total of 4 million smart meters as per their MOU with EESL.
But despite several initiatives and mandates under UDAY, as per CSTEP, Bengaluru, the uptake was substantially low. In Karnataka for instance, in the 200 units/month category of consumers, only 1,876 of 2,91,650 consumers (0.6 per cent) had smart meters by the year 2018. DISCOMs attribute reasons, such as high cost of implementation, lack of skilled manpower and data integration and interoperability issues, to the slow uptake.
Case Study – Deployment of Linky in France
Unlike India and UK, France’s rollout is running on schedule and hence we prefer this for our case study. Let us see how the smart electricity metering project – ‘Linky’ has gone from conception to execution.
Why Linky?
In 2009, the uniquely French meter – Linky won the Observeur du Design award on the theme ‘beautiful useful design’ for its aesthetic concept applied to a functional object. The Linky smart meters communicate with data concentrators through powerline carrier technology. Data then gets transferred to a central information system using telecommunications network such as GPRS.
Planning the national rollout
France began the rollout in March 2010 with a trial of 3,00,000 Linky in the cities of Tours and Lyon. Phase 1 then mandated the rollout of 7 million meters between 2013 and 2015. After successfully completing Phase 1, grid manager Electricité Réseau Distribution France (ERDF) is overseeing the deployment of 28 million Linky meters between 2018 and 2021. France expects to see 95 per cent digital meter deployment by 2020 as per its commitment.
Cost-Benefit Analysis
The net present value of a project is based on the difference between the costs and benefits of carrying out the project and those of not carrying out (i.e. ‘business as usual’). Like its EU cousins, France conducted a cost-benefit analysis (CBA) to allow the national regulator to determine whether to proceed with a national rollout or not.
Assuming annual average tariffs increase by 2.3 per cent from 2010 to 2020 and 1.8 per cent thereafter, the CBA was almost financially neutral (+€0.1 billion), according to an European Commission (EC) staff working document prepared in 2014.
For the Distribution System Operator (DSO), the main benefits were avoiding investment in installing existing meters (30 per cent of total benefits), avoiding network losses (25 per cent) and meter reading costs (5 per cent).
Benefits to consumers have not been quantitatively evaluated. However, the analysis shows net benefit to the consumers, states the EC paper. According to Ademe, the French Environment and Energy Management Agency, Linky is expected to generate energy savings between 5 to 15 per cent or €4 per month, while the Energy Regulatory Commission estimated that the decline could be 2 per cent.
A Linky smart meter costs €175 to install (€1.5 per household per month over 10 years). The costs break down: 80 per cent on procurement and installation of meters, 10 per cent on data concentrators and 10 per cent on IT system. The cost (€1.5) is lower than the savings it generates: pegged at €2/ month.
ERDF selected six smart meter providers to produce the Linky meter, creating 10,000 new local jobs in France for assembly and installation of the meters, one of the accompanying benefits of the rollout. They consider the project not only innovative but also economically and socially beneficial.
The learning from the above case study is that a project should be cleared for execution after conducting a CBA. A country such as France executes a project costing €4.5 billion even if it results in a net saving of only €0.5 per household per month looking at the other benefits such as innovation and jobs.
Current Smart Metering Roll-out in India
In July of 2019, EESL awarded to EDF, a French multinational energy company one of the two biggest ever contracts in India, valued at €69 million (Rs 540 crore) and comprising of 5 million smart meters. EDF is excited since this is just the beginning of the smart metering revolution in India that has a scope of up to 300 million units unlike France with a maximum projected roll-out of 35 million meters.
Note that EDF, itself, is not involved in manufacturing and supply of the smart meters. These meters are procured by EESL under a separate tender and provided to EDF, who has to design, install and integrate a network of 5 million smart meters. In order to ensure that the meters perform and provide the expected results, EESL has separated the service contractor (EDF) from the meter manufacturers.
What this implies is that EDF would be providing a global service right from design of data support, control and management of the metering systems and its processes at the rate of Rs 1,080 per meter for a period of 6 years (Rs 15 /meter /month). EDF has already completed pilot projects in Andhra Pradesh and Bihar preceding the full roll-out where it has shown the performance of the meters and is now stepping up efforts to deploy them in larger numbers.
It is expected that installation of the smart meters in Bihar to be more challenging than in Andhra Pradesh based on the current AT&C loss figures and it would be interesting to see these losses getting curbed using the new technology. EDF has shown its presence in India in other key areas that reduce the country’s carbon dioxide emissions – nuclear and renewable generation, smart grids and intelligent public lighting. It is expected that this expertise would help ensure that the rollout runs on schedule just as in France and other developed nations.
Another challenge that EDF needs to address is to ensure that the meters from different manufacturing companies such as Genus, ITI, and Hexing, each with their own inbuilt data supervisory control and management system can communicate through the network that is going to be set up by EDF in Bihar and Andhra Pradesh. Acceptance of the prepaid functionality (recharging meters with smartphones) by consumers is also to be tested.
Smart Metering Penetration in Asia and India
According to different market research organisations, the global smart meter market would garner exponential accruals, registering over 8.7 per cent CAGR throughout the forecast period (2017 to 2023). Global smart meter market stood at $ 8.6 billion in 2018 and is projected to reach $ 12 billion by 2023.
Asia-Pacific is estimated to be the fastest growing market for smart meters from 2017 to 2022. Factors such as government policies & mandates in developed economies, accurate billing and improved customer service are driving the market. China had taken a lead and had a major market share for smart meters over the past few years. By the end of 2019, China would be fully deployed. In other developed countries, such as Japan and South Korea, the nationwide roll-outs are well on their way. Rest of the Asian countries are also witnessing replacement with smart meters on a massive scale. The smart electricity meter penetration in Asia is projected to increase biennially, from 70 per cent by the end of 2019, to 77 per cent, 88 per cent and 99 per cent, respectively. The entire region would be fully deployed by the year 2026 and there would be an installed base of more than 1 billion smart meters! These figures are fairly consistent with the study carried out by Berg Insight (Dataquest).
Over the next six years, we would see a steadily increasing demand of smart meters to feed the rollouts in the Asian region, ranging between 35 and 55 million meters per annum. The demand for meters in the region would drop down to approx. 41 million meters per annum thereafter.
India has just entered center stage with two major roll-outs in Bihar and Andhra Pradesh commencing in 2019. We expect to see a nationwide rollout commencing by the end of 2020. Thereafter, we expect deployment at a steadily increasing rate ranging between 35 and 45 million meters per annum till the year 2025 when the country would be considered fully deployed.
Since it was late to start, most of the demand for the smart meters over the next six years in the Asian region would be coming from India. One benefit of the late start is that India gets meters with NB-IoT technology!
Low Power Wide Area Network (LPWAN) Radio Technologies
A Low Power Wide Area Network (LPWAN) or LPWA is a radio (wireless) telecom network designed to allow long range communications at a low bit rate among ‘things’ (connected objects), such as sensors operated on a battery. The low power, low bit rate (ranging from 0.3 kbit/s to 50 kbit/s) and intended use distinguish LPWAN from regular wireless WAN that carries more data using more power.
Different LPWAN wireless technologies such as NB-IoT, LTE-M, LoRa, Sigfox and the Wize technology are competing with each other. NB-IoT is a standard frozen by 3GPP in 2016 (Release 13) to enable a wide range of cellular devices and services. In March 2019, the Global Mobile Suppliers Association announced that over 100 operators have deployed/launched either NB-IoT or LTE-M (Long-Term Evolution Machine-Type Communication) networks, both 4G technologies.
Narrowband Internet of Things (NB-IoT)
NB-IoT focuses specifically on indoor coverage, low cost, long battery life, and high connection density. NB-IoT uses a subset of the LTE standard, but limits the bandwidth to a single narrow-band of 200kHz. It uses OFDM modulation for downlink communication and SC-FDMA for uplink communications.
LTE-M
The advantage of LTE-M (Long-Term Evolution Machine-Type Communication) over NB-IoT is its comparatively higher data rate, mobility, and voice over the network, but it requires more bandwidth, is more costly, and cannot be put into guard band frequency band for now (Figure 1).
Why NB-IoT for Smart Metering?
While new IoT communication technologies surface at a staggering rate, no single one can cater to every need. Each application has its own set of requirements for connectivity, bandwidth, latency, power consumption and more. The choice of communication technology should ultimately be determined by the needs of the application.
How do we identify the ‘smart metering communication technology of the future’? For any smart metering use case the network must be reliable and resilient, but to achieve true grid intelligence, near real-time communication and high data rates are simply a prerequisite. At the same time, utilities are seeking flexibility at every level of their business with the aim of getting the most out of their investment in the long run and being prepared for whatever needs may arise in the future.
All of that make NB-IoT a great fit for AMI systems and smart grids. With its inherent qualities – like the potential for delivering true interoperability and insensitivity to disturbances from other systems – NB-IoT ticks more boxes than most communication technologies and is worth considering for a lot of utilities.
So, what makes NB-IoT the way to go? Below, excerpts from Mr. Carsten Nielsen’s post on the blog at kamstrup.com
• Flexible deployment and maintenance-free infrastructure
Because NB-IoT uses an existing infrastructure, the utility practically eliminates the need to deploy one of its own and as a result, the initial roll-out costs are very low. Regardless of their location, meters can connect to the infrastructure instantly, so the utility has the flexibility to deploy or exchange meters at random – wherever and whenever they want – meaning they spend less time and resources on planning.
For flexible performance, a number of variants are available today and more will be released in the near future. Each variant will have its own balance between cost and performance, allowing the utility to pick and choose on a per meter level based on their needs, while using the same AMI architecture. In addition, as the infrastructure is the sole property and responsibility of the telco, no infrastructure maintenance is required by the utility.
• The freedom to play with whomever you like
NB-IoT puts the utility in the driver’s seat by allowing them to piece together their ideal smart grid solution rather than being confined to the product portfolio of one supplier. In addition, being able to choose different suppliers for different parts of the system (meter, infrastructure, head-end system etc.) also provides security of investment because the technology will survive even if one of the suppliers does not. Ultimately, for a communication technology to claim true interoperability it must be usable worldwide and be driven by a large ecosystem of stakeholders.
• Global support beyond smart metering – ALL ABOARD!
The NB-IoT technology can be used for many other applications than smart metering. Consequently, it is driven by an extensive worldwide community that includes telecom equipment manufacturers, mobile network operators and suppliers of communication modules and chipsets.
In addition to increasing the expected longevity of the technology, this also increases the speed and explosive nature of its growth and development, which currently promises a more or less unlimited potential.
As a matter of fact, NB-IoT rollout is already ongoing at full speed, with nationwide coverage already completed in several countries, such as the Netherlands, Ireland, Belgium, South Korea and China. Many more countries are expected to follow suit, amongst others Germany and Poland where NB-IoT is already deployed in many large cities. Even US is moving ahead with concrete plans for a nationwide NB-IOT rollout.
Observations
So far India had only been talking about smart metering. Other than a few pilot projects scattered around the country, India had little to boast of when it came to large scale deployment of smart meters.
India is finally beginning to see large-scale smart metering projects being deployed, driven by ambitious governmental targets to reach nationwide coverage of smart electricity meters. After the recent re-election of PM Modi, smart meter rollouts are anticipated to pick up pace in 2020.
Major credit is due to EESL and its newly set up JV IntelliSmart for the increase in smart meter penetration in India which appears more like a miracle these days. Through its demand aggregation, and bulk procurement model, they have effectively addressed the cost issue of smart metering investments – currently the main barrier for Indian state utilities to launch standalone deployments. So far, EESL has procured 10 million smart meters to be deployed for utilities across India, which is significant compared to the total installed base of less than 1.5 million meters in the country at the end of 2018. Despite intense price competition and the introduction of a national smart meter standard in 2015, EESL has shown international vendors like EDF that India is relatively more open to them in comparison to the East Asian markets.
Conclusion
Early standalone deployments of smart meters in India were mired with compatibility problems as they used different standards (such as wireless RF mesh). With EESL entering the stage, cellular point-to-point has become the preferred smart meter communications technology. Cellular connected meters are expected to take on a central role in the coming mass-deployments.
A clear preference for NB-IoT ready meters is already emerging in the market. NB-IoT offers high throughput, great range and full flexibility as an interoperable solution. Utilities has the flexibility to deploy or exchange meters, with different variants, at random. While it requires utilities to put the communication (4G) network infrastructure responsibility (ownership & maintenance) in the hands of telcos, it is backed by a worldwide community making it a safe bet as a future proof technology. NB-IoT puts the utility truly in the driver’s seat, being able to choose different suppliers for different parts of the system while providing security of investment since the technology will survive even if a supplier does not!
Dr. Vithal N. Kamat,
Director, Centre for Apparent Energy Research.
