4 minute read 12 Apr 2021
Power sector transformation

11 digital catalysts transforming the power sector in India

By Somesh Kumar

EY India Power & Utilities Leader

Experienced energy leader with deep regulatory knowledge.

4 minute read 12 Apr 2021
Related topics Power and utilities Digital

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  • Digital Catalysts for Power Sector Transformation

Empowered by digital technologies, the slew of initiatives launched by the government to promote more efficient grid management, energy accounting, and metering are likely to gain momentum in the coming days.

Driven by financial and operational stress, pandemic and policy measures, digital transformation for Indian utilities may have reached an inflection point, transitioning from a ‘want’ to a ‘necessity’. Key digital initiatives, if implemented timely, may catalyze this power sector transformation.

As per the Central Electricity Authority’s Optimum Energy Mix report, the electricity requirement of the country by 2029-30 will be 817 GW, approximately a four-fold increase from the current peak demand of 189.64 GW. As the sector braces for growth, digital initiatives are bound to play a significant role in bringing operational and financial efficiency in meeting these targets.

As per Investment Information and Credit Rating Agency (ICRA), consolidated debt of state distribution companies is estimated at INR 6 lakh crore in FY 2022, in addition to INR 1.24 lakh crore pending due payable to generators as of December 2020[1]. The average AT&C losses of Indian Discoms is 24.88% compared to a global average of 8.3%. Improving the operational and billing efficiencies can help plug these losses. Some of the key digital initiatives shaping the distribution landscape are smart grids with Advanced Metering Infrastructure (AMI) and IoT enabled devices. AMI is the foundational block of a smart grid which facilitates bidirectional data/energy flow between consumer and utilities. Integrated with Advanced Distribution Management Solutions (ADMS), capable of enhancing the utility’s network and outage management capabilities. Discoms can further narrow their commercial inefficiencies, by shifting to a Unified Revenue Management System that can be future-proofed by integrating with digital payment avenues.

To meet the ever-increasing energy demands of consumers and the ambitious targets set by policymakers, the power sector is poised for digital transformation with the potential of revolutionizing the value chain.
Somesh Kumar
EY India Power & Utilities Leader

Another key pain point is the high purchase cost of power and operational inefficiencies attributable to sub optimal asset utilisation and maintenance. While advanced analytics can help in better load forecasts and optimisation of the despatch schedule, thereby reducing power procurement costs, Enterprise Asset Management (EAM) enables the asset intensive utilities to optimize the operating conditions of the asset over its entire lifecycle. Empowered by machine learning algorithms, optimal usage of Asset Performance Management (APM) coupled with EAM can help the utilities not only detect and predict failures but also prescribe actions that can be taken to avoid failures. Real time asset monitoring can be made more efficient with the aid of technologies like drones or Unmanned Aerial Vehicles that can help lower the operational and management costs.

Emerging technologies such as Blockchain and Virtual Reality/Augmented Reality/Mixed Reality (VR/AR/MR) have also started gaining traction due to the significant benefits that they offer to the sector. Early adopters are moving towards Blockchain enabled smart contract management that can help in transparent and efficient energy accounting at all levels and facilitate peer-to-peer trading between prosumers of electricity. Virtual site visits, field staff training, remote assistance to field workforce, and maintenance can be made operationally efficient and cost effective by leveraging VR/AR/MR where the assets, especially when it comes to generating stations, are geographically spread. Adoption of these technologies backed by advanced analytics can significantly improve operational efficiency and manpower productivity. Virtual Power Plants are virtual replicas created on cloud, with the support of IoT devices installed on the asset and AR/VR/MR technology, that can help in streamlining remote operations. All these initiatives together pave the way for a fourth industrial revolution in the sector. The COVID-19 pandemic has further reiterated the importance of a virtually connected world and has given an impetus to such digital interventions.

The IT & OT devices and applications that shall be installed as part of the power sector transformation shall bring forth unprecedented volumes of consumer and network sensitive data to be handled by the utilities, which puts them at greater risks. Cyber-attacks amid the Covid-19 pandemic rose by almost 300% last year in the country to reach 1,158,208 compared to 394,499 in 2019, the Union home ministry told Parliament on Tuesday, citing the data from Computer Emergency Response Team (CERT-In).

(Milind Solanki, Manager, EY India has also contributed to this article.)

Summary

The digital initiatives shared above, will enable a fast-paced digital transformation and can future proof the utility to face more changes and challenges. Driven by the need to lower losses, improve efficiency, enable data-driven decision-making and deliver better services to end consumers, utilities can benefit significantly through digitalization. The COVID-19 pandemic has further compelled utilities to accelerate this shift.

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By Somesh Kumar

EY India Power & Utilities Leader

Experienced energy leader with deep regulatory knowledge.

Related topics Power and utilities Digital