India has a power grid that is ripe for renovation and transformation. More than a third of the nation’s grid electricity is lost to power theft and inefficiencies, and that doesn’t include the half of the population that has no grid electricity at all. For those who do, daily blackouts are a common occurrence, and major system-wide failures, like last year’s blackout that left 600 million people in the dark, point to long-term challenges in matching power supply with booming demand.

All of these problems spell opportunity for the smart grid industry. After years of stalled-out attempts to drive investment into grid transformation, India’s central government is now in the midst of its Restructured Accelerated Power Development and Reform Programme, or R-APDRP, which is directing roughly $10 billion over the coming years to grid modernization. 

But India’s smart grid efforts likely won’t play out like those we’ve seen in Europe and North America. Specifically, the failures of India’s previous grid renovation projects have driven today’s R-APDRP program to start with systems to diagnose distribution grid losses in cities and towns across the country, along with proven progress in lowering those losses, before bigger investments can go forward.

In other words, big deployments of smart meters, distribution automation systems and other smart grid gear won’t get funding until that critical benchmarking and diagnosis framework is in place. That means that India could see a much bigger upfront role for the kind of system integration and data analysis work that many U.S. and European utilities are just now starting to add to their multi-million-dollar AMI and DA deployments.

And, while that indicates opportunities for U.S., European and Japanese grid and IT firms in these fields, it also includes a major role for India’s IT giants like Infosys, Wipro and Tata Consultancy Services (TCS), the IT arm of Indian conglomerate Tata Group.

Out of the eighteen Indian states now engaged in R-APDRP projects, TCS is managing the IT infrastructure for thirteen of them, Sumit Kumar Ray, head of the Center of Excellence for TCS’ Utilities Business Unit, told me in an interview last week.

The challenge it faces is, simply speaking, to establish a true baseline of the performance of the distribution grids serving some 500 cities in its purview, and turning what are now unreliable systems with incalculable risks into investment-worthy power delivery systems.

Mapping and Measuring a Country’s Worth of Distribution Grids

“The distribution sector has not had the right investments and does not have the right business case for investment,” he said. It’s a classic chicken-and-egg problem: without a clear picture of where and how losses are occurring, it’s next to impossible to implement cost-effective technology solutions to fix them. 

That’s why the “Part A” phase of R-APDRP, which has directed about $2 billion to projects around the country, started with the task of “empirically finding out the technical loss” of each distribution feeder and transformer in each city, he said. “If we know the last mile of the system, then over that we can overlay the delivery of power and use some electrical formula that can figure out the technical loss in that area.”

That’s a major task in itself, including the GIS mapping, metering and automated data logging of every distribution transformer and feeder in each system, as well as indexing of every consumer being served by those transformers.

“Once you have segregated the technical losses out, we can know the commercial losses as well,” he said. Those commercial losses can range from rigged lines that illegally divert electricity to neighborhood homes and businesses, to the more subtle pilfering done by utility workers and power customers colluding to misrepresent how much power is being used.

At the end of it all, “You should know to the smallest fragment of the network what the segregated technical and commercial losses” are, he said. This process has required a fair amount of field work, such as adding communications to existing transformer monitoring systems via cellular and WiMAX networks, he added.

But more important have been the back-end IT systems meant to provide billing and collection, energy accounting and auditing, and consumer services and support systems to provide an honest and accurate measure of all this new data. “These will be the precursor to the capital projects,” Ray said, “so we know where to invest.”

Part B of the R-APDRP program is where the big money is beginning to flow. Starting this year, India’s government has begun seeking tenders for projects vying for a piece of the roughly $8 billion available for distribution grid “renovation, modernization and strengthening” projects, replacement of electromechanical meters with “tamper-proof” smart meters, and other such smart-grid work.

These investments come with strings attached, however. Government funding for Part A projects has come in the form of loans that can be completely converted into grants once the baselining data system has been installed and verified. But the Part B programs are funded via loans of up to 25 percent for each project -- and any conversion of those loans into grants must be accompanied by proven progress in bringing aggregate technical and commercial (AT&C) losses to 15 percent or lower by 2017.

An IT Underpinning for the Next Phase of Smart Grid Plans

Those projects are already underway. In January, India’s Ministry of Power named fourteen smart grid projects, combining smart meter deployments and implementation of outage management and peak load management (i.e., demand response), as being eligible for $100 million in funding. Earlier this month, one of these projects, a 1,400-meter deployment in the state of Puducherry, was given the go-ahead to expand to 87,000 meters.

But the IT systems put in place for the first phase of R-APDRP are still there, underlying all of these projects, and serving as the measure by which they’ll be proven successful or not. That implies a fairly substantial role for the IT providers like TCS and Infosys that manage those systems at a state-by-state level.

In the case of TCS, “We have definitely built a data center infrastructure that will grow and expand to cater to these needs,” Ray said. Likewise, TCS’ system for collecting metrology from the distribution sensors it’s monitoring should be able to support the expansion to smart meters at customer premises: “If the telecom infrastructure goes on adding the bandwidth, we should be able to do it.”

“We are looking at how they can expand this into the last mile” of the smart grid network, he said. “That’s where we see a lot of companies coming in to cater to specific market needs,” with well-known smart grid vendors such as Silver Spring Networks, Landis+Gyr, General Electric, Siemens, IBM and others seeking out opportunities.

At the same time, India’s smart grid roadmap released last month (PDF) specifically calls for the “availability of an indigenous low-cost smart meter by 2014,” with one likely contender being Secure Meters, which holds roughly half the current Indian metering market.

Still, the fact that India’s newly created IT infrastructure has come into being relatively recently provides “the opportunity to leapfrog” the limitations of legacy systems in more developed countries, Ray said.

“All the latest and greatest applications are being implemented,” he said, from mobile prepayment for power customers to support of microgrid and distributed generation resources. “For example, we are now using a network analysis application that supports bidirectional power flows -- it supports the prosumer, who both generates and consumes electricity.”

Given the blackout-prone nature of India’s grid, many large industrial, commercial and critical government facilities are already capable of generating their own power. On the other end of the spectrum, remote rural communities are being targeted for solar and biomass-powered microgrid systems. India’s smart grid roadmap calls for 1,000 microgrids to be up and running by 2017, ranging from villages to commercial hubs.

At the same time, India’s national grid infrastructure is the target of significant investment. This ranges from a state-spanning synchrophasor project to deliver real-time visibility into transmission grid status, to the launch of a national power exchange to grow the still-tiny share of electrical generation that’s bought and sold on an open market-based system -- and TCS is involved in both projects, Ray said.