The Goa government has received a directive from the Ministry of Power questioning the Goa government’s failure to implement a time-of-day (ToD) billing for power consumers and has recommended urgent improvements, including the installation of ToD meters (smart meters) for eligible categories, excluding agriculture. ToD billing is a system in which the power tariff changes according to the time of day the units are used, with higher charges for units consumed during peak hours (early to late evening) and lower charges for units consumed during non-peak hours -- late at night and during the day when power demand is lower. It is a system that can only be implemented after the installation of smart meters, with or without a system of prepaying for electricity bills.
The need for ToD billing has arisen primarily on account of the changing nature of power production in the country. Earlier, when power generation was primarily driven by coal-fired and hydro electric power plants, it really didn’t matter whether consumers were being billed differently depending on the time of the day they consumed the units, because the cost of generating the units was the same irrespective of when they were consumed. Besides, during the era of power shortages, surplus power during the day was diverted to industrial use.
Now, however, things are changing, with the exponential rise in our capacity to generate power from renewable sources like solar and wind; during the day, when sunlight is at its maximum, more power is being generated than the grid can handle during those hours. Generation companies are eager to urge consumers to use power during these hours and are willing to offer cheap rates to distribution companies. Without ToD billing, the distribution companies have no way of passing on the benefits of cheap power to the consumer.
On the other hand, during peak hours, power is sold at a significant premium -- a cost that is borne by the distribution company. In Goa’s case, it's the Goa Electricity Department which is bearing the cost since they have no way of charging the consumer a higher tariff during peak hours.
The question for the end consumer is still unanswered. In the current system, how do people stand to benefit? With the current system, individuals have no benefit from running non-time-bound appliances like water pumps, washing machines and other electric appliances during non-peak hours, and there is no penalty for non-essential consumption during peak hours. But at the same time, if the ToD system were rolled out, the big question is whether the overall cost of power will increase or decrease for an average household.
Undoubtedly, ToD is the future, but before the government can roll it out, they need to explain how people stand to benefit from ToD billing and how they can consciously choose to be eco-conscious by using maximum power when it is readily available for cheap rather than during peak hours when it is expensive and costs fossil fuels to generate.
Behavioural change ultimately needs to be the way forward, but not if it is sold as something that is going to be costlier than the present system. Renewable energy is today cheaper than fossil fuel energy. The consumers need to start seeing the benefits of it.
