The Indian Smart Grid Industry

Market Expertz   |     October 29, 2018



The energy sector in India is a critical component of the infrastructure that affects India’s economic growth and hence is also one of the largest industries in the country. India has the 5th largest electricity generating capacity and is the 6th largest energy consumer amounting for around 3.4 % of global energy consumption. India’s energy demand has been growing at a rate of 3.6 % pa over the past 30 years. The consumption of the energy in a country is directly proportional to the progress of manpower with ever-growing population, improvement in the standard of living of its population and industrialization of the developing countries. Smart grid technology can attribute an important role in the energy scenario. Smart grid refers to the electric power system that enhances grid reliability and efficiency by automatically responding to system disturbances. This article gives a brief insight into the new communication infrastructure and a scheme designed to integrate data.

Due to demand and supply imbalance, transmission and distribution losses go on increasing. Consequently, grid frequency as well as plant load factor decreases. Fluctuation in state grid frequency is harmful to plant equipment. Due to peak demand, strain on power generation and utilization equipment increases which result in increasing energy cost. The industrial sector is the major energy consuming sector in India and uses about 50 % of the total commercial energy available in the country. The main reason for higher specific energy consumption in Indian industries are obsolete technology, lower capacity, utilization, causal metering and monitoring of energy consumption, lower automation, raw material quality and poor handling, operating and maintenance practices. High economic growth in the APAC region, including India, is spurring a rapid increase in energy consumption. India has seen an expansion in the total energy use in the past five decades, with a shift from non-commercial energy to commercial energy sources. The trends in the production of primary commercial energy in the past five decades indicate coal as the most abundant among all commercial energy sources. Petroleum and natural gas sector have also significantly grown in the domestic production and supply. Despite increasing dependency on commercial fuels, a sizeable quantum of energy requirements especially in the rural household sector is met by non-commercial energy sources, which include fuel,  wood, crop, residue, and animal waste. However, other forms of commercial energy of much higher quality and efficiency are steadily replacing the traditional energy resources being consumed in the rural sector. Resources augmentation and growth in energy supply has not kept pace with increasing demand and, therefore, India continues to face serious energy shortages. This has led to an increased reliance on imports (fossil fuels and uranium) to meet the energy demand.

Smart Grid as a Solution:

A smart grid is an automated widely distributed energy delivery network characterized by a two-way flow of electricity and information, capable of monitoring and responding to changes in everything from power plants to individual appliances. It can also be defined as- electricity delivery system (from the point of production to the point of consumption); integrated with communication and information technology.


India’s growing economy has forced the country to increase installed power capacity to 200 GW this year. Despite this growth in supply, the country is still facing major challenges in providing electricity access to all the households and also improving reliability and quality of power supply. Its power systems are struggling to overcome power shortages and poor power quality. The major constraint in achieving the target is shortage of capital resources. Shortages are exacerbated by inefficiencies in power generation, distribution and end-use systems. There is an immediate need for change in planning strategies from the traditional approach of increasing generation to meet demands for consumption, to a resource and conservation-based approach for economic and environmental benefits. Considering the scale of the target, multipronged strategies are envisaged. Some of these are partial solution for power shortages, yet these are important measures in context of resource crunch since these would enable reducing the requirement for new generating capacity. These include removing obsolescence, optimum utilization of existing assets, reducing transmission and distribution losses, demand-side management through greater conservation of electrical energy, policy changes in pricing mechanism, shift and emphasis on renewable energy sources for power generation, total energy systems, new energy storage systems like Superconducting Magnetic Storage Systems as spinning reserve to meet peak demand and energy efficiency promotions in accordance with national and socio-economic and environmental priorities. Also large scale integration of renewable power with conventional power generation should also be patronized.

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