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How Smart Grid Technology Could Power the World—Especially India

Sujith Thannikkatt

Cofounder, Longman Suntech Energy
A diagram of how many smart grids work. (Illustration by Portland General Electric, Flickr / Creative Commons)

A diagram of how many smart grids work. (Illustration by Portland General Electric, Flickr / Creative Commons)

If you are in India and have an uninterrupted power supply, you are either lucky or privileged. The fact that electricity even reaches many of India’s citizens for any amount of time whatsoever is a mystery a mystery known only to God and the Republic of India. This is in spite of the fact that India’s net power-generation capacity is much more than its demand.

In India, severe fuel shortage greatly reduces the total amount of power coming out of the power plants across the country. An obsolete transmission network further reduces the power availability, while theft and poor power management adds trouble to the already unstable and inefficient power grid in India. End result? We run a power shortage figure equivalent to net generation capacity of 30 Nepals or 20 Cameroons!

A political or policy solution seems far-fetched at this point. Smart grids, on the other hand, are a technology-based solution and a highly practical way out of this mess.

If India were to implement smart grids, it would augment renewable-power generation capacity as rooftop solar power plant developers and small wind turbine owners all around the country will be incentivized to build bigger capacities than what they current do and pump excess power into the grid. Excess power technically means the amount of power that developers or power plant owners can produce over and above what they consume.

For a tropical country such as India, where grid parity has long been achieved vis-a-vis unsubsidized power, this means not just green but also cheap power. This could lead to better power management, allowing utilities to control theft by remotely putting off any power-withdrawal source that is unauthorized or not a paying customer.

Then again, what has worked in the developed world won’t work in India, where under-utilization of capacity and theft are the biggest problems. After implement a smart grid, a European utility stands to save on metering costs, whereas a utility provider in India namely expects to reduce theft. And if expectations are different so are the challenges.

Overhauling the grid with the introduction of smart-grid components and features will come at a steep price to both utilities and consumers. Utilities may recover the costs incurred in the long run, but arranging for funds can be a huge challenge in the short run. Making consumers pay for expensive net-meters and related electronics can be another challenge. Massive marketing campaign can raise awareness, but once again the state or worse, utilities will need to foot the bill. Thus, sound and innovative financial planning need to be put into place before we can crack this juggernaut.

Furthermore, installing smart grids in small European countries such as Germany or Spain is very different from doing the same in India. Because climatic conditions, cultures and power usage patterns differ as one crosses the country, cities need localized solutions to ensure viable technical and financial returns from the smart grid. Interestingly, the Government of India has initiated pilot smart-grid projects in 14 locations along the length and breadth of this country. From Amritsar in north to Pondicherry in south and from Baramati in west to Guwahati in east, each of these locations should provide the power infrastructure managers with as many prototypes to expand the smart grid in both reach and impact in a truly effective manner.

The deadline to initiate these pilots is the third quarter of this financial year, and the improvised smart grid solutions should take effect by mid next year. Such deadlines do create great optimism but, once again, meeting these deadlines could be difficult given the not-so-great implementation record of the developing world when it comes to infrastructure projects, especially considering that many of the solutions from the pilots could be unique and untested.

If India overcame all these challenges, it would create a huge demand for smart-meters, rooftop solar power plants and small wind turbines. Indian manufacturers in the renewable sector however had become highly conservative and put on hold their expansion plans following the recent credit crunch and European crisis. Such a conservative outlook of the Indian companies means they will find it very difficult to cater to such a huge spurt in demand and put their Chinese and U.S. counterparts, with much bigger capacities and expansion plans very much in place, at a great advantage. This situation will likely lead to a demand for introduction of protective measures by the Indian manufacturers but such a move could be counterproductive to the growth of renewable energy in India.

The final, remaining question is whether the federal and the state governments will bow down to these demands, or whether they will attempt a great balancing act of saving the local industry and not stifling the smart-grid-induced power sector growth at the same time.

Sujith Thannikkatt

Cofounder, Longman Suntech Energy

Sujith Thannikkatt is cofounder of Longman Suntech Energy and leads its corporate strategy and product development. He is a BITS-Pilani Engineering graduate and a MBA graduate from Lancaster University Management…