This article looks at the smart metering landscape with specific focus on adoption of the technology in Africa, why the region is lagging behind other regions and what needs to be done to accelerate adoption.
A decade since the introduction of the first model of communicating meters, the global advanced metering industry remains strong and growing, according to market intelligence firm Navigant Research. The company forecast the global market to increase from approximately $8.8 billion in 2016 to over $10.7 billion in 2025.
The increase in revenue generation within the market is a result of smart metering being considered as an enabler for utilities to achieve energy transition and digitisation goals. Strong markets will include North America, which is expected to pass the 50% penetration level by 2024 owing to massive smart grid investments by governments and investors and public utility companies.
Deployment in the Asia Pacific region is expected to be backed by massive rollouts in China whilst the European Union‘s 80% penetration target by 2020 will drive adoption in Europe.
Projects in developed regions will mainly be replacement and upgrade initiatives for existing units. Less developed economies such as Africa are yet to fully embrace the smart meter revolution. The majority of the projects in Africa are still in the pilot phase with implementation mainly in South Africa and Nigeria.
Grand View Research predicts South Africa’s smart metering landscape will record a 5.1% growth between 2018 and 2025 and that revenue generation will increase from $54.1 million over $79.5 million during the forecast period.
However, Egypt is expected to play a critical role in driving smart meter activity, as the country has announced plans to install up to 30 million smart meters over a 10-year period.
The need to eliminate continued energy theft, reduce increasing electricity demand, lower operating costs and protect revenue are factors likely to spark the smart meter revolution in Africa.
Despite the presence of AMI adoption drivers, a number of challenges continue to hinder government, utility and energy stakeholder interest in implementing large-scale rollouts of smart meters.
Smart Energy International spoke with Shawn Papi, Senior Research Advisor at Eskom, to explore the smart meter landscape in Africa.
The cost of the smart meter
The slow rate in the adoption of smart meters in the region is due to the perceived high costs related to the technology, says Papi.
He says smart meters tend to cost more in comparison to basic prepaid meter systems used by the majority of utilities in Africa.
The higher price related to smart meters has made African utilities reluctant to adopt the technology; and to continue using prepayment meters as their primary intent is to assure revenue collection through upfront payment. Other AMI capabilities are not seen to be of great importance to energy providers in Africa at the moment.
However, the meter manufacturing industry is releasing more smart metering products than basic prepaid meters as it shifts its focus to new technologies.
Unlike in developed economies, the absence in Africa of all-inclusive smart metering business cases, addressing applications beyond revenue protection such customer centricity and operational efficiency, is limiting the role of funding institutions towards the expansion of the market.
Smart meter standardisation
At the same time, the standardisation of smart metering technology on the continent is a major concern. Various African utilities are piloting or looking forward to adopting differing (and mostly proprietary) technologies.
There is a need to solve the standardisation issue on an African level. For instance, to develop standards that would, at least, keep the prepayment feature in African smart meters since the majority of the utility firms are still interested in the prepaid energy metering use case over and above smart meter features such load limiting, etc.
Despite the efforts implemented by the African Electrotechnical Standardisation Commission (AFSEC) to increase energy stakeholders’ awareness of the adoption and use of standards, knowledge and interest remains low.
In October 2018, AFSEC released the Guide for Application of Standards for Smart Metering Systems in Africa following a mandate from the African Union to look at international standards and tailor them to the African region – and to stimulate the standardisation of technology at a regional or continental level.
“If we standardise across the continent, we will build up economies of scale (at a continental level) and encourage competition which will reduce the costs and improve innovation,” Papi believes.
“For instance, if you go to France or the Netherlands, (smart meter) costs are reasonable because they have made huge investments in standardisation.”
To achieve smart meter standardisation at national level, South Africa’s NRS 049 specification workgroup (composed of metering experts from Eskom and South African municipalities), developed and published the second edition of the NRS 049 specification in October 2016. This edition specifies open communication standards and adopts the DLMS/Cosem data object model, application layer and data security features.
Furthermore, the NRS 049 Ed.2 includes smart meter use cases applicable to the South African utility environment and aspects of the Internet of Things. This positions NRS 049 Ed.2 as the first attempt at a true South African companion specification.
The lack of sufficient communications infrastructure and systems, particularly cellular network coverage, to provide connectivity to the smart meters in Africa is also a barrier.
However, there are a lot of options for utilities to ensure they have the communications infrastructure they need for smart meter data telemetry for different environments.
There are many communications options that can be implemented that have been standardised through the IEC and can be privately owned by utilities or contracted to a telco to implement for them. The arrival of the Internet of Things has helped to introduce communication technology alternatives in areas, for instance, where there is no cellular coverage.
The emergence of distributed resources and new business models will drive utilities in the region to adopt smart meters with time to stay competitive and financially sustainable. The need to make use of real-time grid operations data to achieve acceptable levels of operational efficiency will further necessitate the adoption of smart metering on the continent. Moreover, consumer demands for new and innovative services and the need to ensure business practices are sustainable through services such as quick detection of faults will within the coming years force energy providers to go straight into smart metering rather than basic prepayment. SEI
Shawn Papi is a Senior Research Advisor at the Eskom Research & Innovation Centre focusing on smart metering technology research, testing and standardization. Papi is Eskom’s designated expert on IEC TC13 WG14, DLMS User Association Maintenance Workgroup and AFSEC TC13 and a member of the NRS 049 workgroup.
Papi is one of the speakers at African Utility Week. The Smart Energy Knowledge Hub on the exhibition floor will be dedicated to metering and demand management on Wednesday 15 May 2019. Topics covered will include metering requirements in smart grids, split metering in Soweto, AMI and meter data management, among others.