Companies & Sectors
Smart grids may make power sector financially viable

Smart grids, which increase the connectivity, automation and coordination between electricity suppliers, consumers and networks, will make the sector more financially viable, says an expert

Globally, smart grids are becoming more popular. Power distribution in India has also not been left untouched by this revolution in the grid system. If smart grids were to be the next big step for power distribution in India, it will make the sector financially more viable and control power theft, says an expert.

“Smart grids will make the sector more financially viable. This will help you get that much more money into the system. So with smart grids, power utilities will suffer lesser financial losses,” said Banmali Agrawala, executive director for strategy and business development, Tata Power Co Ltd.

A smart grid delivers electricity from suppliers to consumers using digital technology to control appliances at consumer homes to save energy, reduce cost, increase reliability and improve transparency. It includes all kinds of information technology—such as sensors, digital meters and a communications network.
 Among other things, a smart grid would be capable of avoiding outages, will save energy and help other green undertakings such as electric cars by encouraging use of renewable sources of energy.

With smart grids there is no need to send people to rectify things physically, in case of a power failure. A few commands from a computer at the control centre may help fix the problem or the equipment may even fix itself. Sensors on transmission lines and smart meters at customers' premises would locate the fault and smart switches then would be able to route power supply through other resources.

One of the important fundamentals in smart grids is ‘time of the day’ metering or time of usage, which involves dividing the time into different tariff slots where there would be higher rates for peak hours and lower rates for off-peak periods. With ‘time of the day’ metering, real time monitoring of the consumer’s actual consumption is possible. Mr Agrawala explains how consumption is already being monitored in some places in India. “In Delhi, we are already using it (monitoring actual power consumption) with New Delhi Power Ltd (NDPL); in Mumbai, we are using it in some areas and would like to increase it in other areas as well,” he said.

With ‘time of the day’ metering, problems like power theft could be easily tackled by both the consumer as well as the power supplier. ”Suppose if I see a family’s consumption going up all of a sudden, I should be able to call the consumer and enquire why the consumption has shot up suddenly. One can actually monitor consumption in a far more robust manner. With smart grids, you can have a far closer link with your consumer,” said Mr Agrawala.

A power import-export relation can also be established with the consumer through smart grids. Many electricity customers are installing their own electricity-generating equipment for reasons like economy, redundancy or environmental concerns. When a customer is generating more electricity than required for his own use, the surplus may be exported back to the power grid. This could prove helpful to distributors in meeting demand during peak hours.

In the exercise of distributing power, smart grids could make the system more efficient. “You can monitor the health of all the equipment that you have without actually having any people in place to keep a check,” Mr Agrawala added.
He also lists out other possible uses of the smart grid system. “We can look at the possibility of using the grid for other forms of communication,” said Mr Agrawala.
However, he points out what would be crucial in getting such a system in place, is ‘time of the day’ metering and lowering of current subsidies on energy.

“Without ‘time of the day’ metering, smart grids as a concept will not work. Secondly, the lower the subsidies on energy, the more effective will be these smart grids. The whole idea is that we want people to experience and experience the actual price of energy, before choosing a smart grid. The subsidy element has to go down,” added Mr Agrawala.

Smart grids—in the initial stages—would have a higher potential in urban areas, for power utilities. “To start with, the advantages in urban areas would be more because the potential in the urban areas to save is high and the subsidies in these areas are lesser. So if there is no subsidy, this concept of smart grids works well,” points out Mr Agrawala.
-Amritha Pillay [email protected]
 

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COMMENTS

Udit Chaudhuri

7 years ago

Nothing new in the concept or statement of need for a smart combination of local grids, distributed generation and inter-grid links, with facilities for trading, etc. Some of this was proposed in the Vickers report to our government during the First 5-year Plan. Unfortunately the Government decided to go whole-hog for only large centralised plants and dams. Micro-hydel generation from canals fed by large dams continue to get lip-service.

Even when Panchayats are empowered to facilitate local power plants, Government regulatory hurdles abound. A power line cannot even gross a road without permission from the district administration or municipal corporation concerned.

Clearing administrative hurdles and ridding the system of inter-departmental jealousies is imperative for any reform process. Otherwise we will miss yet another bus in power sector development and that will hurt the economy severely.

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A few expensively priced IPOs and follow-on issues that opened recently failed to find retail subscribers. Financiers who help in closing the issue are extracting a hefty discount and also dumping the shares on listing.

While the government is drawing up major plans for follow-on issues of public sector undertakings (PSUs), the finance ministry would do well to take a real hard look at the IPO (initial public offering) market instead of being focused on the liquidity-driven boom in the secondary market. Industry sources tell us that a few expensively priced IPOs and follow-on issues that opened recently failed to find retail subscribers. They were only closed by pumping in subscriptions through financiers, who extract a discount of 30% to 50% for their funds. Most of them dump the shares on listing and this explains the mystery of the sharp discount at which many companies have listed.

Here is how it works. The problem is greedy promoters who shop for investment bankers promising the highest price for their shares. In the first couple of days after an IPO opens for subscription, panic sets in when the poor retail response becomes evident. The investment bankers bring in financiers who demand a 30% to 50% discount to put in applications. These financiers also have the capability of making 4,000 to 5,000 retail applications if required. Yes, the multiple applications scam is thriving, but has only got more sophisticated to evade detection. Our sources say that investment bankers are an integral part of this racket.

Another aspect of the scam is pure extortion. Here, some unscrupulous financiers prey on IPOs that get a poor response on opening. They then put in large applications to corner the retail quota. On issue-closing day, they call the company and its investment bankers and threaten to withdraw their application unless they are given a cash payoff. With little time to rustle up genuine applications, a couple of promoters have succumbed to the blackmail—but this trick cannot work over the long term. If the government is not aware of these dubious goings-on in the primary market and draws up disinvestments plans on the false belief that the IPO market is thriving, it may end up with serious embarrassment, rather than a solution for its yawning fiscal deficit.
— Sucheta Dalal
 

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COMMENTS

Dilip Davda

7 years ago

Sucheta, we have written about this in media, but it appears that all our efforts are meeting deaf and dump regulators. Vested interest game continues at the cost of retail investors. How long it will continue????

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