The Union Cabinet of India, chaired by the Prime Minister Narendra Modi approved the scheme to spend Rs 25,354 crore to deploy metering in cities and upgrade its old distribution networks.
India has been seeking innovative ways to crack down on widespread electricity theft that has affected the power sector for a long time.
The Integrated Power Development Scheme will help minimize electricity losses along with improved collection efficiency.
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These earmarked government funds will be neutralized from the total estimated cost of ₹32,612 crore.
The power departments of states will award the contracts for the execution of projects, which will be completed within 24 months from date of award.
Almost 40 per cent of electricity is going unpaid in several states due to poor political will to address the thefts and ageing transmission lines.
Managing power theft to diminish losses is part of Prime Minister Narendra Modi’s major policy to provide uninterrupted power to the country.
The new wave of communications on the electric grid is occurring more at the end of the network, closer to the end-user, said, Michael Markides, research manager, Smart Grid and Utilities, IHS Technology.
Utilities are now able to economically install and use communications networks that allow real-time monitoring of the distribution layer of the network, which is the medium- and low-voltage part of the grid, added Markides.
The Internet of Things(IoT) has opened a lot of opportunities in the power sector and smart meters are one of such device.
IoT offers increased income margins, reduced electricity theft and the capacity to predict system failures and vulnerabilities for utilities.
They interconnect devices in industries through the Internet and form a smarter grid that enables more information and connectivity.
However, integrating communication technology to electricity distribution systems exposes the grid to potential cyber-attacks.
Generally, a system is protected with assistance from utilities, vendors and regulators who constantly mitigate hacks on the network.
The remote metering device of smart meters makes estimating bill more simple and efficient.
Besides, a unique identification code related with each meter protects the device credentials.
Most meter manufacturers use at least AES 128bit encryption between the meter and the head-end, but it is the control of the meter that is a bigger threat, said Marcus Torchia, research manager, Worldwide Smart Grid Strategies, IDC.
At an individual meter level, control in the wrong hands could be a nuisance to the homeowner or crippling to the business owner if the power is shut off or throttled. At an aggregate level, thousands or tens of thousands of meters controlled by a hacker could be very problematic, he explained.