Why sub-Saharan Africa needs to get smart with its energy metering

Why sub-Saharan Africa needs to get smart with its energy metering

Sub-Saharan Africa is on the threshold of a decade of strong economic growth, yet 68% of its 880 million inhabitants lack access to electricity. To put this into perspective, only 32% of the population has access to electricity, comparable to other emerging countries such as India at 40%. Across the African continent, only 10% of the population has access to the electrical grid, and in these areas power is often unreliable.

This unreliability, due to inefficiencies in the power infrastructure means that the manufacturing sector in Africa suffers an average of 56 days without power each year, which results in a 6% loss of sales revenue. In some regions across Africa, where backup power generation is scant, the revenue losses can total up to 20%.

Technical losses are only half the story, however. During 2011/12, Eskom, South Africas national utility, reported a total energy loss of 1400 GWh within its distribution networks. Between 25% and 40% of the total could be contributed to theft, but other non-technical losses included faulty meters, meter tampering, billing and metering errors.

Considering the poor accessibility and low reliability, one might assume Africas power is, at least, reasonably cheap. However, this is not the case; at an average price of UD$0.13 per kilowatt-hour, it is 2 to 3 times higher than most other parts of the developing world.

These fundamental weaknesses in the power sector pose real threat to Africas economic growth. Some Sub-Saharan African countries are starting to put measures in place to help turn the situation around, and the overall trend is towards smart metering.

The Electricity Company of Ghana (ECG), with over 2.5 million customers and a monthly distribution of about 800 GWh of electricity, has deployed various types of prepayment metering since 1995 for over 100,000 customers. In Zimbabwe and Nigeria, utilities have gradually been rolling out prepayment and smart meters since 2009, and although these projects are still far from complete, the size of the market opportunity in Nigeria has been estimated at 23 million units total. In South Africa, 13 million meters are currently installed, of which 5 million are pre-paid and 500,000 are contractall with Eskom. The remaining 7.5 million are installed with municipality customers. This is advantageous to both utilities and consumers, enabling improved reliability of supply for consumers and improved revenue assurance for distributors.

However, as well as these advantages, there are also disadvantages to prepaid meters for utilities which include additional expensive hardware costs and the inability to offer end customers dynamic rate plans such as time-of-use (TOU) pricing, which, in turn, disadvantages the consumers.

Smart metering could provide the answer to reducing non-technical losses for South African and Sub-Saharan African utilities as a whole, by enabling utilities to monitor usage and detect tampering and theft more quickly. In South Africa alone, the estimated market size of electricity meters in 2010 was over 11 million, and the US Trade & Development Agency (USTDA) forecasts that South Africa will spend $11 billion over the next decade on grid modernization. This investment will help to expand and strengthen grid supply, and eliminate some of the technical losses.

Additionally, by adopting smart metering, sub-Saharan African utilities will be able to better manage their load distribution, reducing power outages, and encourage off-peak use by domestic consumers through time-of-use (TOU) tariffs. This will benefit consumers, who will have wider access to more reliable power 24x7, accurate monthly bills and lower energy costs for off-peak electricity. It will also benefit manufacturers, who will be able to reduce the revenues lost through lack of power supply.

Smart metering could also enable distributed generation and provide a means for small local generators (e.g., solar farms) to make a business of injecting power into the network, stabilizing the supply and making it more reliable, to cater to the growing power needs of households and businesses as more and more are connected to the grid. South Africa is currently targeting 42% of its energy to come from renewable sources with plans to add 9600 MW of new nuclear capacity to the country's energy mix by 2030.

As technical and non-technical losses are reduced, and utilities see the benefits of increased revenue assurance, they will be able to invest more into strengthening and extending the power infrastructure throughout the countries of Sub Saharan Africa. In addition, Sub Saharan utilities will be more attractive to outside investors when they can be assured of seeing returns on their investments through secure grids, stable supply and reliable payment systems. All of which will support and strengthen sub-Saharan Africa as it grows, for the next decade and beyond.

Source: intelligentutility

Smart Grid Bulletin May 2018

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22 June 2018