We all feel and experience daily the fundamental problems of the power infrastructure in India. The rampant theft, the technical losses, the reliability of the grid, the gap between demand and supply, frequent blackouts and for those who are lucky, the expensive to run but indispensable hum of the diesel generators are our everyday endeavor.

For the past several years, the Smart Grid is a much talked about buzzword that promises to solve all our pain points. So what is the Smart Grid? At a very high level, it is an intelligent power grid that uses information and communications technology to gather and act on information in an automated fashion to improve the efficiency, reliability, economics, and sustainability of the generation, transmission and distribution of electricity. Smart Grid brings some key benefits to manage and solve our power infrastructure problems immediately and into the future. It is important though to identify the most immediate challenges of the Indian grid and start making investments in a phased manner. The problems the Smart Grid would address in India, at least in the short term would be subtly or very different from other Smart Grid initiatives in various parts of the world. It is extremely important to define and solve the pain points first to start demonstrating the Return on Investment and ensure financing in the long run.

Technical and commercial loss reduction based on our burgeoning demand supply gap and instability of the grid that unfortunately led to the world’s worst blackout this past summer are the high priority items from an Indian context. 

As a priority for Phase 1, complete automation of substations on the transmission end is basic necessity followed by substation automation down to the high voltage distribution grid. This is necessary to prevent the wide area blackouts. Feeder automation as part of distribution automation has shown to give high return on investment by voltage control, reactive power control and isolation of faults. Automated meters in dense urban locations, at least at the neighborhood transformer level to measure the energy, power factor, pin-point outages and to locate and co-relate the potential sources of theft should be a priority.

Further granular view offered by Automated Meter Reading (AMR) with Smart Meters at the customer level that are tamper proof while increasing the metering reach and efficiency with automated billing, tracking and auditing for accuracy is the need for the hour. The communications infrastructure and the protocols for this initiative has to keep into consideration the future phases of Smart Grid deployment. Phase 2 would include Automated Metering Initiative (AMI) initiatives to get set time interval load profile, auto connect-reconnect with non-payment of bills (even though could be hard to implement in India), pre-paid metering options along with Time of Use (ToU) pricing would be next logical steps. Distribution Automation down to mid-voltage substation automation increasing operational efficiencies while reducing technical losses and improving power factor should be the priority in Phase 2. Phase 3 would include device monitoring and diagnostics, connecting up the off-grid solar (there will be several off grid solar projects by then)generation back to the grid and infrastructure for distributed storage, distribution automation down to low and ultra-low voltage level, load management and peak load shaving and self-diagnosis and self-healing of the grid by re-routing power.

In parallel to the implementation of Phase 1, 2 and 3, there are horizontal efforts that span all phases of the Smart Grid deployment. The architecture, communication infrastructure and protocols, the security protocols, cyber-security initiatives and control protocols are parallel efforts that need to be decided, many of them upfront.

The immediate benefits of Smart Grid in India should be to reduce the technical and commercial losses from the 30-33 per cent number and to ensure grid stability is not compromised to prevent wide area blackouts.

The major challenges are both strategic and tactical in nature. Strategic challenges are in terms of investment and will. The problems of our power infrastructure have to be acknowledged by all and the Smart Grid initiative needs to be taken up as a “Critical Mission” by India, cutting across all political, state-center and private-public boundaries. A common cost-benefit methodology that can be applied across all smart grid demonstrations approved by financing sources and regulators, and publishing of the agreed upon methodology, including underlying rules and assumptions need to be done.

A carrot-and-stick policy need to be structured, incentivizing the utility companies to cut down on the technical and commercial losses, and penalizing them for not making progress. Another interesting idea is to explore and contrast with the telecom industry where a large part of the tower and mobile infrastructure originated as a “Build, Operate, Maintain” model and charged/leased back to operators as an operational expense. While sharing of infrastructure is not possible in case of power distribution utilities, can there be a business case in India where Smart Grid vendors with access to debt capital can fund the capital expenditure and charge it back to utility companies based on services/benefits provided on a per home passed over several years or even decades? This then transitions from capital expenditure to operational expenditure with a “Pay as you Benefit” model for the utility companies.

More tactically, there are several trade-offs between use of mobile infrastructure versus a private infrastructure with low power wireless or powerline communication in terms of the communications infrastructure required on the distribution side. While the 2.4 GHz unlicensed band offers higher speeds for data, the range is rather limited especially in concrete/brick construction and higher fog and moisture content regions like in India and hence deployment would be costly. 865MHz band is well suited with excellent trade-offs between speed and range but in India is limited to a 2MHz spectrum due to CDMA frequency overcrowding and hence lacks the available and desired spectrum which needs to be actively looked into. A 2MHz band AMR network is feasible but constraints on data and frequency of metering reading will have to be examined.

As a summary, identification of the key problem areas that will benefit from the Smart Grid, identification of the Phase 1 efforts that provide an immediate measurable return, a structured and agreed upon methodology for cost-benefit analysis, initiating the India’s Smart Grid effort as a critical mission, a carrot-and-stick approach to get all utilities in line and finally looking at creative ways to solve the financing gap to create a self-sustained investment in India’s Smart Grid are the key takeaways looking at the opportunities and challenges for Smart Grid in India.