ISGF Paper Proposes new Revenue Opportunites For Electric Utilites

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A new white paper entitled New Revenue Opportunities for Utilities, which highlights various opportunities for revenue generation for utilities through digitalising the power sector and unlocking existing infrastructure and services, has been published by India Smart Grid Forum- a public private partnership initiative of Ministry of Power for accelerated development of smart grid technologies in the Indian power sector. The report argues that since India has been making good progress towards clean energy transition, with solar panels and batteries becoming increasingly cost-friendly and efficient in technology, it is time for the electric utilities to consider new revenue streams for growth and sustainability, as selling electricity to customers- their current primary source of revenue- will become less viable in the future.

For this purpose, the paper suggests, the utilities should take advantage of the digitalisation of the power sector that enables them to make use of information gathered from customer data, billing and collection system, smart meter data and energy consumption profile, GIS maps, automation systems like SCADA/DMS, DA and SA, DERMS, and Outage Management System (OMS) and Mobile Workforce Management System (MWFM).

The study also throws light on new services and revenue opportunities that the utilities should explore by unlocking existing infrastructure and services. Some of the report’s salient examples are as follows:

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1. Selling Rooftop PV (RTPV) Systems: While RTPV has become economically attractive to most categories of customers (1 kW PV system costs around Rs 35000 to 40000 and is expected to become cheaper, around Rs 20000-25000 by 2025), customers are unfamiliar with RTPV systems and models available in the market and do not know the formalities to avail net- metering/gross metering benefits. Utilities should test and certify good quality RTPV Systems and offer services to their customers for procurement and installation of RTPV systems as well as its annual maintenance. This way, they can participate in the RTPV revolution already underway in the country and avoid becoming a “Kodak of Tomorrow.”
2. Selling Energy Efficient (star-rated) and Smart Appliances: Since efficiency is key in all technological appliances, many utilities are already promoting replacement of old air-conditioners and refrigerators with new star-rated appliances. Now, they should go a step further and promote “smart” appliances, which can be connected to the WiFi network and remotely controlled. The range should cover geysers, washing machines and electric cooktops with energy efficiency programs and incentives. Promoting innovative and sustainable business models will be mutually beneficial for both the utilities and the customers.
3. Selling Electric Vehicle Chargers: Most market analysts predict a bright future for large-scale use of Electric Vehicles (EVs) across the world, including India. To profit off this emerging scenario, utilities can collaborate with EV manufacturers and provide charging solutions to their customers, especially home charging facilities like ACs, etc. Large number of EVs connected to the grid could be aggregated as virtual power plants (VPP) and support the grid in many ways. They can take inspiration from Jaguar Land Rover (JLR) which has recently entered into a partnership with Tata Power to set up and provide EV charging solutions at 27 outlets of JLR and also at customers’ residence in India.
4. Selling Batteries for Energy Storage and Other Applications: Energy Storage System (ESS), particularly Lithium-ion Batteries (LiB), is fast becoming popular for several applications at the customer’s end. It is being used in DG set replacement, solar and wind power applications, EV charging, data centres, and as stand-by power for all new infrastructure like lifts, emergency lights, computers and WiFi routers. Utilities can offer LiBs to customers to provide ancillary services, solve network upgrade deferrals, smoothen power from solar PV, etc. Smaller batteries at customer premises can be aggregated through battery aggregation systems and run as Virtual Power Plants (VPP).
5. Cooling as a Service – District Cooling Systems: Temperature in India has been rising in recent years and only 5% people in the country have room air-conditioners. District Cooling Systems (DCS) has been successfully implemented in several cities around the world including GIFT City in Gujarat where cooling is provided as a service against monthly bills. DCS, highly energy efficient and economical, reduces the electrical load of individual buildings, and can also be combined with thermal storage. Electric utilities should seriously consider cooling service with DCS as a new business opportunity.

Among other services and revenue opportunities that the paper mentions are Promotion of Electric Cooking, Communication Bandwidth, Smart Homes: Grid Interactive Buildings and Appliances, Unlocking the Value of Substation Land: Commercialisation of Surplus Land by Conversion of Existing Substations to Gas Insulated Substations (GIS), Unlocking the Value of Lamp Poles and Towers, and Maintenance Services.