Fuji Electric of Japan will set up a smart grid in Andhra Pradesh's Vijayawada to make energy management efficient, an official statement said Friday.

The smart grid monitors the consumption of energy and forecasts the demand for the next 24 hours.

As a follow-up to Andhra Pradesh Chief Minister N. Chandrababu Naidu's visit to Japan in November last year, officials of Fuji Electric met him here Friday and informed him that the smart grid will be set up in Vijayawada on pilot basis.

The company has conducted a feasibility study for a smart grid project and will submit the report soon.

The officials also informed him that their smart grid technology can support the new state capital, said a statement from the chief minister's office.

In gated communities, sensors can be installed on buildings which will forecast energy requirement and give insights into energy consumption patterns, they explained.

The smart grid allows one to share energy with other grids if the demand is less from one grid and more from the others.

Naidu wanted the officials to install smart meters and suggest technologies which will bring down the transmission and commercial losses from the current 12.9 percent to 6 percent.

Explaining that energy efficiency and energy saving is one of the government's focus areas, the chief minister has also asked them to identify the possibilities of collaboration in energy-related technology areas such as renewable energy.