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L&T Wins Bid For India’s Smart Meter Pilot Project To Cut Utility Losses

L&T emerged the lowest bidder to supply 50 lakh smart meters to EESL.



A bank of “smart” electric meters are tested in a Southern California Edison meter service center in Westminster, California, U.S. (Photographer: David Paul Morris/Bloomberg)  
A bank of “smart” electric meters are tested in a Southern California Edison meter service center in Westminster, California, U.S. (Photographer: David Paul Morris/Bloomberg)  

Engineering conglomerate Larsen & Toubro Ltd. will supply 50 lakh smart meters in two north Indian states as it emerged as the lowest bidder in a global tender for a pilot project that is expected to help ailing power companies reduce billing inefficiency.

L&T quoted the lowest price of Rs 2,722 per single phase smart meter in a contract floated by Energy Efficiency Services Ltd., the government agency said in an emailed media statement. EESL will procure 40 lakh smart meters for Uttar Pradesh and 10 lakh for Haryana to be installed in a phased manner over three years, the statement added.

Smart meters can enable the government to reduce losses at state-owned power distribution companies which had a combined debt of Rs 4.3 lakh crore as of September 2015. Discoms in India lose money on every unit of power they sell due to electricity theft, insufficient billing and subsidies.

The average technical and commercial losses for state discoms is currently at around 25.3 percent. Haryana and Uttar Pradesh, where EESL will implement the smart grid, grapple with even higher transmission loss rates of 28.4 percent and 34.3 percent respectively.

The smart meters will help these states in not only significantly reducing their AT&C losses by way of increased billing efficiency, but will completely change the way in which electrical energy is presently being consumed and paid for by the consumers.
EESL Media Statement

Capable of two-way communication, smart meters record electricity consumption in real time, allowing consumers and power distributors to see how much is being used and its costs. “This means one can adapt the energy use and cut down on waste to provide financial savings to consumers,” said the media statement.

The price quoted by L&T was 40-50 percent lower than the market rates for smart meters, said EESL. The smart electric meter market is expected to cross $11 billion by 2024, according to Bloomberg’s Global Market Insights. Bloomberg New Energy Finance expects 1.5 crore smart meters to be installed in India by 2020. This would, however, still be lower than some Asian peers.

EESL, which is bearing all costs of this procurement, will also open a bid on October 31, for the system integrator of this project who will be responsible for meter installations, data storage on clouds and preparing dashboards, the statement added.

The smart grid projects are aimed at providing uninterrupted power supply. The Ministry of Power has allocated 14 smart grid pilot projects that will be implemented by state-owned distribution utilities.

Shares of L&T closed 0.14 percent lower ahead of the announcement, while the benchmark BSE Sensex ended trade 0.1 percent higher.