Smart meter: Prepaid smart meters are the new generation of energy meters installed in households and businesses that are used to record electricity consumption in real time. As they are connected to the internet, users can easily track and monitor electricity usage and get accurate bills.

Smart Meter Segments

Smart meters can be classified under different categories depending on the usage, technology used, etc. For example, based on usage we have separate smart meters for water, electricity, and gas. Besides that, there is a further classification based on the technology used like AMI and AMR meters.

Advanced metering infrastructure is an integrated system of smart meters, communication networks, and data management systems that enables two-way communication between meter endpoints and utilities. Unlike AMR, AMI doesn’t require utility personnel to collect the data. Instead, the system automatically transmits the data directly to the utility at predetermined intervals.

Building blocks of AMI(Advance Metering Infrastructure)

AMI includes Smart Meters which can collect information about energy, water, and gas usage at various intervals and transmit the data through the second component of the grid which is the Communication Network. This data is further transmitted to the Meter Data Acquisition System (MDAS) which acquires the data and pushes it forward to the Meter Data Management System (MDMS) which eventually receives the data, stores it, and analyses it.

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Global Outlook

The global smart meter market is estimated to grow by 9.4%CAGR between 2023-2028 from an estimated USD 23.1 billion to USD 36.3 billion by 2028. Major factors fueling the growth would be the current NDA government’s initiative towards contactless billing, improved grid reliability, and efficient outage response. This would also allow electric companies to have data to analyze multiple factors affecting the industry.

Asia Pacific would be the leading growth engine with China and India leading from the front followed by Europe which will be the second-largest market for smart meters during the forecasted period.

Government Initiatives

Working to rapidly establish its stated goal of pan-India universal electricity access, the government of India is enabling Smart Grids which can offer affordability and other benefits to consumers. The first step towards realizing Smart Grids is the implementation of Advanced Metering Infrastructure (AMI).

The Smart Meter National Program is being implemented to deploy smart meters across the country. The scheme is being implemented by Energy Efficiency Services Limited (EESL), a JV of PSUs under the Ministry of Power.

The SNMP(Smart Meter National Program) aims to replace India’s 250 million conventional meters with smart meters. The smart meters will be procured by EESL. The program has already been initiated for the states of Haryana and Uttar Pradesh as of now.

Smart Meter Stocks

Some of the global players in the list are LandisGyr, Itron, Inc., Osaki Electric Company, and Siemens. While some of the players in India listed on the stock exchange are:

Genus Power Infrastructure

Genus Power Infrastructure was incorporated in 1992 as a part of the Kailash Group. It predominantly deals with manufacturing and providing Metering Solutions and also undertakes construction and engineering contracts.

Key Metrics

ParticularsFigures
Market Capitalisation₹ 9,272 Cr.
Current Market Price₹ 309.2
Price to Earnings Ratio123
Book Value₹ 51.5
Stock all time High and Low₹ 344 / 96.0
Dividend Yield %0.26 %
FII Holdings16.87 %
DII Holdings5.01 %
Promoter Holdings42.66 %

HPL Electric & Power

HPL Electric & Power is a leading electrical equipment manufacturer in India with close to over 4 decades of experience. The company operates across 5 key product verticals i.e. metering solutions, modular switches, switchgear, LED lighting, wires, and cables. The company also exports its products to over 42 countries throughout the world.

Key metrics

ParticularsFigures
Market Capitalisation₹ 3,130 Cr.
Current Market Price₹ 486
Price to Earnings Ratio66
Book Value₹ 129
Stock all time High and Low₹ 492 / 98.1
Dividend Yield %0.24 %
FII Holdings0.24 %
DII Holdings0.32 %
Promoter Holdings72.66 %

Larsen and Toubro

Larsen and Toubro is a multinational corporation engaged in diversified business prospects ranging from engineering, procurement, and construction solutions to defense, power, IT as well as financial services.

Key metrics

ParticularsFigures
Market Capitalisation₹ 5,07,000 Cr.
Current Market Price₹ 3689
Price to Earnings Ratio37.3
Price to Book Value₹ 628
Stock all time High and Low₹ 3,949 / 2,327
Dividend Yield %0.81 %
FII Holdings24.36 %
DII Holdings38.08 %

Currently, shares of Genus Power have risen by more than 200% in a year while stocks of Larsen & Toubro have gone up by close to 55%. HPL Electric & Power has also shot up from the price of ₹100 to ₹486 in the last 1 year. The shares of all these companies have given phenomenal returns as a result of enhancing revenue numbers and the prospective scope of the companies in the future.

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Controversies

Health Implications

Smart meters expose the power grid of any country to cyber attacks at times of military or political turmoil. In Europe there are concerns regarding the health implications of smart meters from the radio frequency emissions by wireless smart meters however, the California Council of Science and Technology couldn’t find any health implications from the frequency waves of the smart meters.

Another study by Daniel Hirsch, retired director of the Program on Environment and Nuclear Policy at UC Santa Cruz criticized the CCST report because it did not consider studies that suggest the potential for non-thermal health effects such as latent cancers from RF exposure.

Pricing Controversy

Smart meters also allow dynamic pricing; it will enable prices to be reduced at times of low demand, it can also be used to increase prices at peak times if all consumers have smart meters. Smart meters also allow energy suppliers to instantly switch customers to expensive prepay tariffs in case of difficulties paying.

In the UK during a period of very high energy prices from 2022, companies were remotely switching smart meters from a credit tariff to an expensive prepay tariff which disconnects supplies unless credit has been purchased.

Privacy Issues

Another concern culminating in the minds of the people is the privacy issues regarding the collection and usage of data as smart meters are potent enough to collect detailed energy usage and time slots of the usage. It can also collect data regarding the devices being used etc. Certain instances of such usage have been seen in the past in Australia debt collectors can make use of the data to know when people are at home.

Besides, such data have even been used as evidence in a court case in Austin, Texas where police agencies secretly collected smart meter power usage data from thousands of residences to determine which used more power than “typical” to identify marijuana growing operations. 

Limited benefits

There are questions about whether electricity and water are or should be primarily a “when you need it” service. Further, there is little evidence to prove that smart meters would be effective in saving energy and water wastage. Also, the rate structure displayed on the screens of some models of smart meters is in technical terms which makes it difficult for users to contemplate.

Conclusion

As electricity and water will be the key resources with time, because of water shortage globally and the world shifting towards green energy, it will be interesting to watch how the smart meter industry performs in the upcoming years with the push from the government and power generation and distribution companies. It will also be critical to note how the data collected by the Smart Metering Companies is being used to optimize the usage of energy resources and water.

Written By Dipangshu Kundu

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