A Live-Wire Market for Electricity Can Be This Sector's UPI Moment

Digital tools can plug home solar panels into networks that balance demand and supply efficiently

- SAURABH KUMAR & BALAJI CHANDRAMOULI

With a milder summer than expected and early rains, electricity supplies this season have turned out to be more than adequate to meet demand surges due to the extensive use of air-conditioners. The generation margins reflect efficient policy planning and actions by the Union government, a challenging task, especially since 93% of the electricity produced in India is purchased and distributed by state-owned utilities that are weighed down by populist imperatives. On average, they end up charging less than what it costs to serve the consumer, thereby imperilling investments across all limbs of electricity supply, from generation to distribution.

A key lynchpin of the government's reform efforts that has steered capacity addition in states to make utilities viable has been its digital push. Installation of prepaid electricity meters at the consumer end and remote monitoring of bulk distribution supply assets like transformers has cut technical losses and improved utilities' revenues.

However, the digital experience at the consumer end is limited to paying bills, transactions that can now be done effortlessly thanks to the Unified Payments Interface (UPI), an alternate payment system to traditional bank transfers that now accounts for 85% of all digital transactions in the country.

This takes us to the larger question of a UPI embrace in the power sector, with electricity being transacted by consumers on a mobile phone keypad.