Earlier this month, the Indian state of Maharashtra announced a US$25 million smart grid program covering electricity distribution networks in eight cities including Mumbai, the country’s financial capital. Maharashtra has commissioned the German company Siemens to install smart grid technologies in the state to tackle issues such as outages and electricity theft. Smart grid technologies will also improve the efficiency of the existing and very inefficient Indian transmission and distribution network. Currently, nearly a quarter of electricity in India (and up to half in some states) is lost while being transported through the grid system (compared to 7 percent in the U.S.), causing economic losses to utility companies and contributing to widespread electricity shortages.

Evidence of an inefficient electricity grid in Hyderabad, India. Image source: Flickr user mckaysavage.

Evidence of an inefficient electricity grid in Hyderabad, India. Image source: Flickr user mckaysavage.

This investment is just one aspect of a recent major push for smart grids by state and central government in India. India ranks third in the world for smart grid investment behind the U.S. and China, and its investment is growing rapidly. A meeting of the Central Electricity Authority on March 5 led to a proposal for nearly US$50 million of funding from the Ministry of Power for smart grid projects across India. State governments are also expected to contribute about half of the funding required for smart grid pilot projects.

The Ministry of Power has established the India Smart Grid Forum – a voluntary consortium of power utilities, implementing agencies, smart grid consultants, research agencies, and nongovernmental organizations, among others – which aims to bring different stakeholders together to ensure a rapid and efficient deployment of smart grid technologies in India. The Forum calls for implementation of smart grid systems in all state capitals and large cities between 2014 and 2017.

The Ministry of Power also established the India Smart Grid Task Force (ISGTF), which serves as a platform for smart grid activities, but also focuses on coordinating initiatives between different government Ministries.

Recent weeks have seen smart grid projects moving forward in other Indian states as well. Puducherry was selected by ISGTF as one of eight pilot cities for smart grid technologies, and it recently signed a Memorandum of Understanding with the Power Grid Corporation of India to install smart meters on 87,000 homes over four months this year. The new advanced metering infrastructure will allow customers to view their electricity billing in real-time and better manage their consumption. Smart meters will also enable the Puducherry Electricity Board to detect electricity theft, which costs India billions of dollars each year, much more easily. The city of Bangalore also launched a program this month that aims to install one million smart meters over the next year.

Expanding the use of smart grid technologies will also be instrumental as India strives to rapidly increase generation from variable renewable sources. India’s National Solar Mission aims to increase solar capacity from 250 megawatts (MW) at the end of 2011 to 20 gigawatts (GW) of grid-connected solar alone by 2022. India already ranks fifth in the world in total installed wind capacity, with over 13 GW at the end of 2010.

One of the challenges associated with some sources of renewable power, such as solar and wind, is that they generate varying levels of power at different times due to changes in available sunlight and wind patterns. Smart grid systems can help integrate multiple, variable renewable energy sources by directing the power efficiently to electricity end users. The government’s demonstrated commitment to transitioning to a smart grid infrastructure is a strong and necessary step toward a more sustainable energy future for India.

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energy efficiency, finance, Green Investment, India, renewable energy, renewable energy finance, smart grid