Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· Smart meters are the third pillar of the proposed technology-driven transition in electricity systems globally, in addition to renewable energy and energy storage technologies.
· Prepayment is seen as a remedy for the financial ailments of the electricity distribution companies (discoms), thus solving a long-standing problem.
· Consumers are expected to be empowered to plan consumption in an efficient manner, and be able to choose the supplier and tariff plan in a future multiple supplier system.
Criticisms
· Prepaid meters address only a small part of the problem of discom finances – non-payment of billed amounts. In fact, discom losses have two additional components: Line losses in the distribution network, and theft outside the meters, neither of which will be helped by smart meters.
· Smart meters will require access to network and support architecture to transmit and store data. There is no clarity on the network costs, who will bear it, and the impact on the electricity bills of the poor.
· Prepayment will imply elimination of security deposits, which offer cheap working capital. Both factors impose costs on discoms. On the positive side of the ledger, prepaid meters will reduce meter-reading and billing costs, and working capital requirement.
· Prepaid smart meters are advocated as pro-poor, but the poor may, in fact be the first to suffer. The pro-poor argument is that prepaid meters allow payment in small, affordable fragments, offer a sense of disciplined autonomy and control over consumption, and thus, relieve the poor of the debt they accumulate with the discom.
