India Announces Plans for Nationwide Smart Electricity Meter Rollout By 2022

The Indian government announced plans to begin the nationwide rollout of 250 million smart electricity meters across nearly 58 government-owned regional power Distribution Companies (DisComs) by the end of 2022. The DisComs smart meters implementation will be spearheaded by the joint venture of Energy Efficiency Services Limited (EESL), a government-owned Energy Service Company (ECSO), and the National Investment and Infrastructure Fund (NIIF), a sovereign wealth fund set up by the government of India that focuses on infrastructure investment. The new joint venture, named IntelliSmart Infrastructure, was created in October 2019 and is tasked with implementing, financing, and operating the smart meter rollout program of the government-owned power distribution companies.

The Indian Ministry of Power announced the installation of 1 million smart meters under the smart meter national program by the end of 2019. In the government's 2020-2021 financial budget, US$21 Billion, has been allocated for the nationwide rollout of 250 million smart meters, which roughly translates to $84 per meter including hardware, connectivity networks, installation, system integration, and data storage and analysis. One of the biggest challenges for large scale deployments is attributed to the high cost of smart meters; however, EESL has developed a Pay As You Save (PAYS) model to drive regional distribution companies to implement smart meters in a more affordable manner. In the PAYS model, IntelliSmart Infrastructure will finance the necessary Capital Expenditue (CAPEX) and Operational Expenditure (OPEX) for the Advanced Metering Infrastructure (AMI) implementation. The AMI deployment will be based on the Build, Own, Operate, Transfer (BOOT) model, with three years to build out the AMI systems and five years for the operations and maintenance phase. Subsequently, IntelliSmart will recover the cost through monthly installments from regional DisComs over time. In August 2019, EESL published findings from its partial roll-out of 500,000 cellular smart meters that were installed and believes the benefits from smart meters validate the PAYS model for DisComs to adopt smart meters. Some key highlights are as follows:

• The initial rollout was initiated in five regions with 12 regional DisComs where smart meters were connected using 2G.
• The average communication network availability was 97.2%.
• Smart electricity meters transmitted data of 7kB/hour with meter data polled every 15 mins which are easily supported by 2G networks.
• Among the many benefits realized by the early tests, three distribution companies were able to increase the average revenue per customer between 8% and 21% due to more accurate meter readings, a decrease in peak power purchase costs, and improved reliability.
• There was also a significant improvement in customer satisfaction with improved billing efficiency and reduction in exceptional billing or back billing by 73% and reduction in bill corrections by 65%.

There have been some contradictions in India’s approach to its smart meter implementation framework since the roadmap for smart meter implementation was first announced in 2013-2014. Based on the earlier framework, 18 smart meter pilots were conducted in early 2016, which tested various connectivity technologies, including IEEE 802.15.4, Powerline Communications, cellular connectivity, and proprietary LPWA networks. The implementation framework published in 2013 had a five year deadline to finish the smart meter rollout in 2021. However, EESL has completely scrapped the previous pilots to recommend the use of public cellular networks based on the second round of pilots with 500,000 General Packet Radio Service (GPRS)-enabled smart meters. Over the years, the Ministry of Electronics and Information Technology (MeitY) has in consultation with government and private sector companies have been developing guidelines and regulatory frameworks for large-scale AMI deployment.

The Indian government has set an ambitious implementation deadline to complete the 250 MM meter rollout in three years (by the end of 2022), which creates several opportunities for both domestic and international Internet of Things (IoT) solution providers: 

Smart Meter Hardware: Opportunities are likely to come up soon with Requests for Proposals (RFPs) for electricity meters that would request participation from both domestic and international smart meter Original Equipment Manufacturers (OEMs). Earlier tenders in 2017-2018 have witnessed fierce competition between several domestic OEMs such as ITI and Genus, and International OEMs such Hexing. The winning bidders offered cellular smart meters with an Average Selling Price (ASP) of under US$35. Earlier smart meter ASPs were considered too expensive for large scale rollouts, so upcoming tenders for smart meters will likely see fierce competition to get the smart meter ASP to under US$30. Market developments over the last 18 months have indicated that smart meters, to a large extent, are likely to leverage existing connectivity network infrastructure to reduce CAPEX. Cellular connectivity, especially 2G and 3G, has demonstrated over 97% coverage during trials and is most likely to be the connectivity technology of choice. That’s said, even though 2G and 3G address connectivity coverage challenges, their longevity to support smart meters with 10 to 15 year product lifetimes is still questionable, as telcos plan to sunset 2G and 3G in the future. To mitigate challenges with technology longevity and also be low cost and support low-bandwidth connections, new smart meters will likely also support Narrowband IoT (NB-IoT). .

Cellular Connectivity Services: In India, four operators—Reliance Jio (32%), Vodafone Idea (28.89%), Airtel (28.43%), and BSNL (10.55%)— serve 1.15 billion subscribers. Aside from Reliance Jio, which operates a 4G-only network, all of the other telcos operate 2G and 3G networks, although Airtel and BSNL started to sunset their 3G networks in 2019. Reliance Jio, Airtel, and Vodafone Idea are currently piloting NB-IoT in several cities and have announced plans for nationwide coverage except for the government-owned BSNL. BSNL started deploying 4G networks in late 2019, but claims it will start commercially offering 4G services in most regions in India by the end of March 2020. With most operators except Reliance Jio offering 2G connectivity and with operators starting to offer NB-IoT networks in 2020, 2G and NB-IoT are most likely to be the connectivity technology of choice for smart meters. However, telcos don’t offer ubiquitous cellular coverage and 5% or nearly 12.5 million smart meters or more will be addressed by other Wide Area Network (WAN) technologies such as proprietary Low Power Wide Area LPWA networks.

Cloud Storage: There are early indications from EESL to leverage Information Technology (IT) infrastructure on the cloud to reduce CAPEX for large-scale smart meter rollout. As of December 2019, MeitY has empaneled 12 cloud service providers that will be allowed to host smart meter data in a private cloud environment. The cloud service providers are also required to offer a standard web-based interface to integrate the cloud services with DisComs IT systems. Reviewing past RFPs has also indicated cloud service is required to operate as a virtualized platform capable of running various applications, including Meter Data Management (MDM) and analysis module, to provide the complete 360-degree view of the meter data, including but not limited to Load Survey, tampering events, event logs, phase association, outages, blackout periods, single-phase and three-phase power supply, etc.

System Integration, Installation, and Maintenance Services: In 2018, EESL announced tenders for system integration and installation services for 10 million smart meters. In March 2019, the French energy company Électricité de France (EDF) was awarded a US$77 million contract from EESL to offer services ranging from AMI design to meter installation and integration with the existing billing system of three regional DisComs. EDF India will install five million smart electricity meters over two years and is also responsible for the design and operations of the AMI system for six years. In May 2019, L&T India and Trilliant won a separate contract for US$137 million for head-end systems, system integration, and installation services for 5 million GPRS-enabled smart meters over the course of the next eight years. Reviewing past smart meter RFPs indicates system integrators will also be responsible for storing and managing the security information related to smart meters, including device security keys. IntelliSmart infrastructure will initiate multiple tenders for system integration and installation services on behalf of regional DisComs.