Role of Smart Grids in Building Smart Cities: An Indian Perspective

December, 2016

Over the past few years there has been a phenomenal increase in the demand for power in India, from both domestic and commercial sectors. The government has struggled in the past to cater to this demand due to inadequate generation capacity as well as inefficient T&D infrastructure which results in significant losses.

Currently India suffers from ~22% AT&C losses which is one of the highest globally and about 2-3 times of the national power deficit. The government plans to bring down AT&C losses to 15% by 2019 primarily with the help of smart grids.

It is expected that the potential demand for electricity will reach around 900 gigawatts by 2032, in view of this, India primarily needs to ramp up its generation capacity as well as control AT&C losses.

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Over the years the percentage share of energy generation from renewable sources has significantly increased. However, the full potential of renewable energy sources can only be realized when they are merged in a smart mainstream distribution grid. The smart grid will have processor based systems to ensure efficient management and overall stability and reliability of the entire distribution infrastructure.

Smart Grids ensure the supply of adequate and quality power, which is a necessity for various urban infrastructure development missions of the Indian government. Smart City mission is one of such development programme which is highly dependent on adequate and reliable power supply through the development of smart grids.


The Indian government launched the smart city Awas Yojana mission in 2015 with a cumulative budget allocation of USD 15 Billion. A total of 109 cities across the country are planned to be developed as smart cities under the program. Smart cities will ensure enhanced quality of life to its citizens through robust core infrastructure, clean and sustainable environment and the application of various smart solutions.  Imperative to the availability and use of smart solutions, is reliable and efficient power supply which can be made sure by a modernized and efficient distribution system.

Realization of most of the above mentioned solutions is dependent on efficient and reliable power supply.

The smart grids will ensure optimized distribution and usage of power, which in turn will provide the energy infrastructure needed for the functioning of smart solutions which are the building blocks of a smart city.

The aim of a smart city is to provide a sustainable high-quality lifestyle to its residents. We understand that to realize this goal the smart city indeed needs a smart grid at the background. However, In the Indian perspective, the advantages of a smart grid do not come without some key challenges associated with its implementation in India. Some of the key challenges are:

  • Mass Deployment of sensors

  • Effective home energy management solutions

  • Smart communication requirements from water and gas utilities

  • Handling and analysis of large scale data

  • Deciding when to retrofit, renew or take up a green field on existing infrastructure

  • Investments in futuristic ideas such as vehicle charging

  • Technology choices

  • Private/Public network sharing possibilities.

Clearly, an immediate challenge for Indian utilities is to integrate the existing aged elements of the system with new, future oriented technologies. Thus, a robust and end-to-end implementation of smart grid is required to realize the full benefits a smart city promises to its residents.

Read more: Smart Cities Market Revenue in India to Worth $47.70 billion by 2023