India’s rapid economic growth had just started dominating the headlines, when the news of its population reaching 1.46 billion came in. While there are many narratives being weaved between the two, there is one that remains inconspicuous yet integral to the practical realities of our development – the ever-surging energy needs.
India’s current power capacity stands at 427 GW, which it intends to almost double to 900 GW in the next five years. Even as the transmission and distribution (T&D) losses have historically hovered between 20–25%, the country aims to achieve 500 GW of renewable energy capacity by 2030. With its energy demand swelling, as well as its ambitions, India stands at a critical juncture in its energy transition.
Enter Smart grids. According to the International Energy Agency, ‘Smart grids are electricity network that use digital technologies, sensors and software to better match the supply and demand of electricity in real time while minimizing costs and maintaining the stability and reliability of the grid.’ Smart grids are fast emerging as a transformative force. These grids enable real-time monitoring, demand response, and seamless integration of renewables, directly addressing India’s energy inefficiencies and sustainability goals.
Smart grids are not new to the Indian ecosystem, already delivering tangible benefits. The National Smart Grid Mission, launched in 2015, targeted to reduce aggregate technical and commercial (AT&C) losses to 12-15% by this year is well within reach, with losses having dropped from 22.3% in FY2021 to 15.4% in FY2023.
Contrary to popular belief that technology first pervades in the metros and then trickles to other cities, Bihar, followed by Assam and Uttar Pradesh lead the way in smart meters installation. In Assam, smart meters have helped 44% of consumers save about 50 units per month by enabling real-time consumption tracking and accurate billing.
Renewable integration is another area where smart grids shine. Managing the “duck curve”, i.e. the challenge of balancing solar and wind intermittency that requires advanced forecasting and demand response. AI and machine learning solutions are being piloted to predict generation patterns and optimize grid operations, ensuring stable supply even as renewables’ share grows.
Rural access has also improved, with microgrids now serving over 10,000 villages. These projects not only provide electricity but also create local employment and support livelihoods. Electric vehicle integration is another frontier. NITI Aayog’s vision for 70% EV sales by 2030 aligns with smart grid capabilities to manage charging infrastructure and balance demand spikes.
Despite progress, critical gaps remain. Cybersecurity is a growing concern, with limited protocols to safeguard smart grids from cyberattacks, even raised in recent Rajya Sabha debates. Moreover, the AI and machine learning models, while promising, need to be tailored to India’s diverse load patterns and regional disparities. Which also brings up the challenge of interoperability. Fragmented technology systems across states hinder seamless data exchange and grid management.
Overall, outdated equipment, inadequate metering, and high rates of power theft that result in transmission and distribution losses of 15–25%, undermine the effectiveness of smart grid technologies. Moreover, the rapid growth of renewable energy, which now constitutes about 30% of installed capacity, has exposed the grid’s inability to manage variable supply, leading to instability and inefficiency.
However, it is not just that smart grid technology is still evolving that has created implementation hurdles. Governance issues have also played a significant role in the slow progress of smart grids. Pilot projects in states like Odisha and Gujarat have been observed to have failed due to mismanagement, political interference, and flawed tendering processes. Lack of public advocacy efforts have also led to public resistance, with consumers expressing concerns about higher tariffs and the perceived health risks of smart meters.
To overcome these challenges, a comprehensive and coordinated approach is required. Policy reforms must prioritise the depoliticisation of DISCOM operations, establishing independent oversight and transparent governance mechanisms. Securing investment through public-private partnerships and innovative financing instruments, such as green bonds, can help bridge the funding gap. Technological solutions, including the widespread adoption of automated systems and advanced metering, should be implemented in tandem with robust cybersecurity measures to safeguard grid integrity.
Equally important is the need for a consumer-centric approach. Public awareness campaigns can help dispel myths and highlight the benefits of smart grids, such as cost savings and improved reliability. Incentives like prepaid meters and time-of-day tariffs can encourage efficient energy use and foster greater acceptance among consumers.
India’s smart grid journey is just beginning. The market is projected to grow from $2.4 billion in 2024 to $19.3 billion by 2033, reflecting both ambition and urgency. To fully unlock the energy potential, India must consistently work on all aspects of this energy transition, be it public advocacy, prioritsing public-private R&D investments, or standardising protocols. Global examples, such as the U.S. demand-response programs and China’s deployment of over 100 million smart meters, offer valuable lessons in scalability and consumer engagement.
India’s transition to smart grids is not merely a technological upgrade but a systemic transformation that demands collaboration between government, industry, and citizens. By addressing financial, technical, and governance challenges head-on, India can unlock the full potential of smart grids and pave the way for a more sustainable and resilient energy future.