The smart meters are being installed under the first phase of the Power Transmission and Distribution Efficiency Enhancement Project financed by the Asian Development Bank.

The $150-million project envisages modernising the electricity grid by installing advanced metering infrastructure to reduce power losses, improve collection efficiency, and manage electricity demand and outages faster.

On the consumption side, households with smart meters are expected to get a regular and accurate view of electricity consumption besides high-quality electricity supply eliminating the need to use voltage stabilisers, and faster recovery from power outages.

The smart meters will also enable automated billing system so meter readers will not have to visit individual houses each month and give customers a bill.

“The smart metering rollout programme is in its early stages, and will be deployed in phases across the electricity distribution network of Nepal. It is envisaged to conduct six smart metering pilot projects in six distribution centres by September 2020, deploy 450,000 smart meters by May 2021, 3 million smart meters by May 2023, and 5 million smart meters in total by May 2025,” said the Asian Development Bank.

The Nepal Electricity Authority gave the contract to install smart meters to Chinese firm Pinggao-Wisdom after finding out that the lowest bidder, Huizhou Zhongcheng Electric Technology, had submitted fake bid documents. Pinggao-Wisdom has quoted a price of Rs81.08 million to install 90,000 smart electricity meters.

Project coordinator Juju Ratna Shakya said that the contractor had begun collecting meter data of the targeted households, and requested consumers to provide the necessary information to the visiting surveyors. The contractor is expected to install and operate the automated metering system by December 2020.

Automating the distribution network by fitting smart meters is consistent with the effort to reduce electricity distribution losses to 8.5 percent within this fiscal year by strengthening the power delivery infrastructure.

Although the power utility has slashed transmission and distribution losses to 15.32 percent saving Rs7 billion in the process in the past three years, the utility is still unable to bank in a substantial 1,156.85 gigawatt hours of energy owing to such losses.

In the last fiscal year, the power utility lost 1,156.85 gigawatt hours out of the total available 7,551.23 gigawatt hours because of poor quality transformers, conductors and pilferage.

The country lost 27 percent more energy than the annual output of the Kali Gandaki A, the largest hydel scheme in operation which churns out 842 gigawatt hours annually.

Power utility officials say the focus has now shifted to improving the reliability of energy supply and enhance operational efficiency.

“We plan to achieve the reduction targets by using sealed conductor cables in loss-prone areas, installing smart meters, upgrading overloaded transformers and coordinating with the local administration to investigate cases of meter tampering and electricity pilferage,” said Kulman Ghising, managing director of the Nepal Electricity Authority.

Also, the reduction of distribution losses is considered by energy officials to be a fundamental effort consistent with achieving Sustainable Development Goal 7 (Sustainable Energy for All) as well as Nepal’s Nationally Determined Contributions for the United Nations Framework Convention on Climate Change.

The Asian Development Bank has provided $150 million as a 32-year term concessional loan at 1 percent interest during the eight-year grace period and 1.5 percent interest after the grace period under the distribution enhancement project.

According to the donor, for the rollout of 5 million smart meters across Nepal, the power utility will require about $500 million; and a major part of this amount will cover the purchase of smart meters (including communication modules), meter boxes and communication infrastructure such as data concentrator units, gateways and routers.

"Nepal's power supply is expected to increase rapidly during the next several years because of the commissioning of the 456 megawatt Upper Tamakoshi hydropower project and the planned commissioning of multiple hydropower projects with a combined installed capacity of 1,635 megawatts by 2022," states a report by the Asian Development Bank.

"Therefore, the existing transmission and distribution systems need to be immediately rehabilitated and upgraded for the network to be able to deliver the additional electricity supplies to consumers."