IEEE Technology and Society Magazine - June 2021 - 30

Commentary
recovery period for the smaller producers. The other
reasons include lack of adequate knowledge among
the potential producers and financing institutions,
and lack of control over fixing the tariff by the producers
[5]. Earlier research [27] indicates that new
suppliers of the sharing economy compete with the
suppliers in the old system and the service location
tends to be crowded. Regulatory incentives and nimbleness
of the platform can address the crowd problem
and provide the services at locations erstwhile
unavailable. A better service quality offered by the
suppliers strengthens the overall functioning of the
platforms [3].
Infrastructure: The distribution segment in India is
still in the nascent stage [52] and monopoly control
of state-owned utilities. Unlike roads, the existing
distribution network for the transfer of electricity
is not readily open for the platforms which might
not be able to establish their own networks. The
owners of the physical infrastructure, transmission
lines, should be encouraged to share with potential
users for a fee. The lack of use of smart meters in
households is another challenge. Smart meters help
in analyzing the consumer usage pattern, enable
bi-directional power, and information flow. They
will also help in the reduction of AT&C losses due
to better theft detection and reduction in errors in
meter reading. The infrastructure gaps can be filled
by increasing the number of prosumers which also
enhances the likelihood of success of the sharing
economy platforms (Lang et al., forthcoming).
Customers: The extant research [22] found that
customers in rural India are willing to pay double and
61% of industrial customers are willing to pay more
for reliable electricity supply. Given the inefficiency
in the present electricity sector, there will be faster
adoption of electricity to be provided through the platforms.
A similar trend was evident among New Delhi
commuters moving towards Uber due to inadequate
public transport systems [34]. There is a need for incorporating
views of different user and social groups in
designing and implementing the appropriate sharing
economy models to implement a fully functional government-business-society
system [41], [69].
Platform: Since there is no platform firm in the
electricity sector, the new entrants shall be faced
with multiple challenges and dilemmas [28], [48].
The government should permit the platforms that
connect small producers and consumers and should
allow them to use the existing physical infrastructure
30
for transmission. The platform needs to convince
the producers and consumers to transact. It has to
forecast demand and supply while determining
the pricing structure based on multiple uncertain
factors. The electricity production from renewable
resources like solar energy is dependent on weather
fluctuations. The platform has to perform various
optimization activities to minimize the transmission
congestion also constrained by the available transmission
capacity, reduce the power transmission
loss, and maximize its profit by pricing suitably. Platforms
should also be made aware of the possible
misuses of the power or consumer mistrustfulness as
in the case of bike littering in China [11].
Pricing Structure: The existing state-controlled tariff
structure is a significant hindrance to the evolution
of the sharing economy. Utilities in India cross-subsidize
domestic consumers by charging large-scale
industrial consumers. The existing players shall be
reluctant to uptake platforms without assurance for
the market pricing. The new platforms might undertake
risks in serving the small consumers at the market
rates but making consumers pay higher prices
shall be a challenge. Dynamic pricing models as in
Uber can be tried in the electricity sector. There are
suggestions based on mathematical models [40]
and literature review [15] which can be explored.
Policy/Regulations: Apart from strict control over
the pricing, the target customers of the distribution
firms are also protected by the state. In Mumbai, a
private distributor, Tata Power Company Ltd., with
the provision of Electricity Act 2003, was allowed to
distribute power to any retail customers in the city
by using another distributor's power supply lines on
paying the necessary wheeling charges. However,
due to Tata Power's lower billing rate, many industrial
customers from the RInfra distributor switched
to Tata.4 This resulted in RInfra losing customers who
subsidized residential customers. RInfra fought this
in courts which finally restricted the migration of
customers consuming more than 300 units a month.
Another example, in Karnataka province, excess
power from the installed roof solar panels cannot
be sold to the grid resulting in slow adoption of
solar panels.5 Given these instances, it is clear that
regulations need to be revamped to enable the shar4https://economictimes.indiatimes.com/industry/energy/power/reliance-infrastructure-tata-power-clash-over-cross-subsidy-surcharge/articleshow/19607256.
cms?from=mdr
5https://www.deccanherald.com/city/cloud-over-rooftop-solar-panels-in-bengaluru-726248.html
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https://economictimes.indiatimes.com/industry/energy/power/reliance-infrastructure-tata-power-clash-over-cross-subsidy-surcharge/articleshow/19607256.cms?from=mdr https://economictimes.indiatimes.com/industry/energy/power/reliance-infrastructure-tata-power-clash-over-cross-subsidy-surcharge/articleshow/19607256.cms?from=mdr https://economictimes.indiatimes.com/industry/energy/power/reliance-infrastructure-tata-power-clash-over-cross-subsidy-surcharge/articleshow/19607256.cms?from=mdr https://www.deccanherald.com/city/cloud-over-rooftop-solar-panels-in-bengaluru-726248.html https://www.deccanherald.com/city/cloud-over-rooftop-solar-panels-in-bengaluru-726248.html

IEEE Technology and Society Magazine - June 2021

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