Come nightfall, most of Africa is left in darkness – more than a century since the commercial light bulb was invented.
Only 10% of the continent’s population has access to the electrical grid, and even these areas are often subjected to unreliable access to power, according to the World Bank. What’s more, based on current trends, less than 40% of African countries will reach universal access to electricity by 2050.
While some Africans have finally been connected with electricity, another pressing challenge that municipalities across the continent face is getting people to pay for the energy that they have used. According to the Groupe Speciale Mobile Association (GSMA), roughly 40% of those connected to infrastructure services do not pay for them, including 20% of the most affluent customers.
Electric meters used today don’t always produce accurate bills. Another problem is that meter readers aren’t always able to gain access to properties, which often results in ‘no reads’ or ‘estimated’ reading on a bill.
Taking the guesswork out of energy consumption would make a significant difference in Africa. One solution is smart metering.
‘Smart devices could provide the answer to reducing non-technical losses for African utilities,’ says John Cronin, executive chairman of UK-based integrated design system firm Cyan, in an online article. Non-technical losses such as meter tampering or fraud, unmetered and illegal connections, as well as data tampering in billing represent a significant challenge for utilities.
In fact, it constitutes around 20% to 30% of revenue losses across the continent. In some cases, this figure reaches 50%.
‘By adopting smart metering, sub-Saharan African utilities would be better able to manage their load distribution, reduce power outages and encourage off-peak use by domestic consumers through time-of-use tariffs,’ says Cronin.
‘This will benefit consumers, who will have wider access to more reliable power 24×7, accurate monthly bills and lower energy costs for off-peak electricity. It will also benefit manufacturers, which will be able to reduce the revenues lost through lack of power supply.’
Another important upside of smart meters is their remote connection/disconnection functionality, which aids in cash collection. If a customer does not pay their bill, an alert is sent to the utility and a notice is issued. If this fails to elicit payment from the customer, the power supply can be switched off remotely.
Once payment has been received, the power supply can be restored immediately.
A transitional approach would allow the region to successfully adopt and upgrade smart solutions for widespread energy access
Some African countries have already started introducing smart metering. In South Africa, Johannesburg’s electricity utility, City Power, has installed more than 60 000 smart meters in areas where domestic customers consume in excess of 1 000 kWh of electricity a month.
An additional 220 000 installations are set to happen during the course of 2015, at no cost to customers.
Johannesburg Mayor Parks Tau says the introduction of smart meters forms part of an innovative system known as ‘load limiting’, which is designed to reduce load shedding and improve consumption efficiency.
Customers with smart meters will receive a text message to reduce their electricity usage when the grid is under strain. ‘It will be up to the customers to switch off those electrical appliances that aren’t needed. If you ignore the signal, your power will trip for 30 seconds and will switch on again,’ he says.
‘If you continue ignoring the warning signal, the power will switch off completely.’
As much as 775 MW could potentially be saved if all households with smart meters applied the system.
Zimbabwean utilities have been rolling out prepayment and smart meters since 2009. So too, has Nigeria. And while these projects are not yet complete, Cronin estimates the size of the market opportunity in Nigeria to be about 23 million devices.
Also in West Africa, the Electricity Company of Ghana has close to 3 million customers that have a metering system of sorts in place – 38% of which are prepaid. The utility aims to upgrade 50% of its customers to prepaid meters within the next few years.
Uganda, on the other hand, has adopted a more progressive approach, one that serves as an important lesson for other countries.
The country’s national electricity utility, UMEME, sought to enhance its energy service following a government-mandated 2018 deadline to improve revenue collection rates from 75% to 99%, and to reduce losses (technical and non-technical) by 14%.
After installing GSM-enabled meters at network nodes, it started reflecting losses owing to poor network, bad supply and an inefficient post-paid billing system, which included 900 non-billed connections.
Changing tactics, UMEME retrofitted 8 600 households with prepaid split meters in 2012. Installed outside the household, these meters have a separate keypad on which a voucher code can be entered.
The 12-month pilot cost US$2.3 million –US$1.5 million of which was recovered within a year. In addition, late penalty payments totalling US$387 000 were also received.
What’s more, the pilot also resulted in a 30% decrease in energy consumption, primarily because customers were becoming more conscious of their actual usage.
Taking the guesswork out of energy consumption would make a significant difference in Africa. One solution is smart metering
Traditional methods of distributing and billing electricity – whether it’s prepaid or post-paid systems – typically result in seemingly endless challenges for the municipalities that manage them. That said, it’s essential that some form of monitoring is in place in order to ensure utility revenue.
Viven Perumal, marketing manager of pre-payment electricity meter company Conlog, says that even though there is a trend of smart metering across the world, Africa needs to be ‘smart’ with its meter investment.
He explains that requirements differ substantially depending on the country and continent. Africa doesn’t necessarily need a ‘first-world smart meter’ – a basic prepaid version will suffice, a long as it is affordable, helps with efficiency, assists utilities to be more effective in monitoring the market and the risk factor is minimal.
According to Conlog general manager Dudley Millers, the devices enable customers to track their energy usage more accurately. The are also able to exercise greater control in terms of their energy consumption.
‘Even more beneficial, is that the movement towards smart prepayment meters allow for better and more detailed analytics of both the flow of energy and the means to track this electricity for better management,’ he says.
GSMA’ s research agrees with this sentiment. Sub-Saharan Africa may not yet have grasped the business case for smart metering. However, the research company believes that a transition approach would offer the most benefit.
‘In areas where smart technology does not yet make sense, traditional prepaid meters, coupled with smart enabling services – payments and customer service – could adequately answer the pressing need to improve energy access,’ it says. What’s more, further down the line, it may also ‘increase the number of connections’.
A transitional approach would allow the region to successfully adopt and upgrade smart solutions for widespread energy access. In doing so, it will also provide countries with the time they need to identify appropriate business models – ones that take into account the population’s purchasing power and available infrastructure – varying from urban to rural areas.
