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The case for Smart Metering in Africa

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16 May 2012 - Smart Metering (SM), is an important tool in the management and improvement of energy efficiency on a global scale.

New metering technologies have been introduced all over the world to address energy (electricity, gas and heat) shortages, meter reading problems, revenue protection processes, customer service improvement and a host of other business-related issues.  Coupled to this, many governments and energy regulatory bodies are introducing legislation to enforce the deployment of SM systems. This is a complex and technically demanding process involving role-players from various backgrounds, such as engineering, finance, legislation, customer care and political intervention.

Requirements for electricity metering in Africa
Within the context of Southern Africa, load management is a major additional requirement to the SM process. The NRS 049 specification, which is the South African functional specification for SM systems, goes a long way in defining the SM requirements for electricity metering in South Africa.

The same basic functional requirements will be applicable in many African utilities. The main business drivers for the implementation of SM in Africa are low electrification levels, legislation, network management (including outage management, load control, maintenance and network upgrading), with improved meter reading/billing, cash flow, customer service, as well as reduced energy losses and overall energy conservation.

The functionality and operational implications of this technology were discussed during August/September 2011 at a PIESA (Power Institute for East and Southern Africa) workshop in Lilongwe, Malawi, where Kobus van den Berg, an electrical engineer at Aurecon, presented a comprehensive paper on the topic.

“In the African context, the reasons for using smart meters may well be very different to the reasons for applying them in Europe or America,” says van den Berg. “SM technology has developed significantly during the past five years and it is high time to evaluate its applicability and possible impact on African electricity utilities, especially if new metering technologies are made mandatory.”

Understanding SM
To understand and appreciate the potential changes in metering systems, it is necessary to explain what exactly is meant by SM. Smart Metering is characterised by: the automatic processing, transfer, management and utilisation of metering data, the automated management of meters and two-way data communication with meters.

Smart Metering also functions to support services that improve the efficiency of the energy system, including generation, transmission, distribution and especially end-use.

The two main users of information from SM are the electricity distributor and the customer. SM can increase the efficiency of electricity distributors by providing accurate and timely information. The electricity distributor can then use this information to improve various functions such as billing, revenue collection, revenue protection and network management. SM can also provide meaningful information to customers, which will allow them to personally monitor their energy consumption.

Building a business case for SM in Africa
Van den Berg believes that smart metering is financially viable in Africa but a detailed unique business case needs to be developed for each utility: “It is vital that an effective financial model be compiled to reflect the cost and expected savings within each specific utility when SM is implemented”.

To motivate and justify the use of SM in African utilities, the specific challenges in a utility have to be identified and evaluated. This process will lead to the choice of an appropriate SM system and targeted processes to address problem areas.

Thereafter, identified challenges should be evaluated and addressed in detail. Apart from certain strategic elements that are more difficult to quantify, most of the benefits and risks involved can be converted to a monetary value. Many of these operational risks have yet to be assessed in the African context. Very few SM installations exist in Africa at this stage and thus it is important for utilities interested in implementing SM to perform a detailed viability study in order to minimise risk factors.

Potential operational risks would include:

  • technical reliability of the chosen SM system
  • reliability of the telecommunications infrastructure
  • skills and training of local staff to install and maintain the meters
  • financial viability
  • quality standards and technology aging
  • cyber security
  • customers’ ability to understand their role and react appropriately.

These risks are fundamental factors to be considered in building a business case for the proposed implementation of SM.

Van den Berg highlights the importance of taking a strategic approach and carefully developing a financial model.

“By taking into account the necessary skills that need to be acquired or contracted to plan, manage and operate the systems, as well as the risk factors that need to be well-managed, a successful rollout of SM systems in Africa may well be on the horizon.”

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