AMI penetration in Africa: a comparison with global progress


Nicholas Nhede explores the adoption of advanced metering infrastructure in Africa and looks at factors driving and hindering rollout of the technology as well as how the solution is helping utilities in the region to address critical energy challenges.

According to Michael Hartnack, an analyst with Navigant Research, “Smart meters have the highest deployment rates of any smart grid technology, and the global market, although slowing slightly, continues to expand.

This article was originally published in Smart Energy International Issue 2-2020. Read the full digimag here or subscribe to receive a print copy here.

“Across all regions, the Middle East & Africa demonstrate the highest potential for growth in smart meter deployments, while the Asia Pacific accounts for the highest percentage of overall global smart metering revenue.” The global penetration of smart meters will rise from 41.2% in 2019 to 59% by 2028 driven by continued increase in utility investments in grid intelligence, security and edge computing, according to Navigant Research. A new report published by energy market research firm ABI Research states that utility metering and video surveillance will dominate the global Internet of Things smart city market through 2026. Smart utility metering (power, gas and water) and video surveillance are expected to represent 87% of the total number of smart city connections by 2026.

Utilities are mainly focused on consumer energy, gas and water usage monitoring, savings and efficient operation of grid networks.

Most markets continue to pursue and install first-generation smart meters as energy providers seek to maximise investments in smart grid technologies and to improve customer services. In Africa, the need to improve revenue collection and to reduce nonrevenue expenses drives utility investment in advanced metering infrastructure.

Northeast Group forecasts over 430 million advanced meters to be deployed across 50 emerging markets, including some countries in Africa by 2024. This will increase the number of smart meters installed in these economies to 541 million. The water metering segment is expected to generate $6.7 billion in revenue by 2024.

Up to 111 million units were deployed in emerging countries at the end of 2019. Emerging markets are expected to invest $40.7 billion in advanced metering infrastructure between 2020 and 2024, and up to $47.9 billion will be invested in additional smart grid infrastructure segments over the same period.

China will account for the majority of the volume (269 million smart meters) as it progresses with its second-generation “refresh” deployment. However, outside of China there are still very significant opportunities. In the past year, critical progress has been seen in countries as diverse as Thailand, Angola, India, the UAE, Uruguay, and Lithuania.

Steve Chakerian, a senior research analyst at Northeast Group, said: “…with so much regulatory action and major tender activity, 2020 signals a new era of smart grid activity in the emerging market countries.”

A separate study also conducted by Northeast Group highlights the possibility of utilities in sub-Saharan Africa investing up to $141 billion in power sector infrastructure development between 2019 and 2028.

“Electrification efforts in Africa understandably typically focus on adding generation but that’s far from the whole story. Generation will see huge growth, but billions of dollars will still need to be spent to build out T&D grids.

In addition, electricity meters are the ‘cash registers’ of the power sector. Without efficient metering, African utilities will not have the necessary funds to invest sufficiently in their grids,” adds Chakerian.

More than 600 million people in Africa still lack access to affordable energy.

Investment in metering will be critical to enabling further crucial investment in T&D infrastructure and generation.

The recent growth of low-cost Chinese-made AMI meters has opened up the market to smart metering, helping improve utilities’ capacity to reduce non-technical losses. There are now notable AMI projects in Angola, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Nigeria and South Africa, among others.

However, large international vendors are also penetrating the market, frequently in partnership with local manufacturers, governments and utilities.

Examples of AMI rollout being done in partnership with governments and utilities in Africa include 20,000 smart electric meters in Mali which have been installed in efforts to reduce losses by 20%; 30,000 points in Burundi, with an aim to reduce energy losses by 22%; and the one currently being implemented with the only energy distribution company in Benin, Société Béninoise d’Energie Electrique (SBEE).

With SBEE, the pilot project includes installations to some 40,000 low-voltage customers in Cotonou. The project aims to reduce technical energy losses by between 5% and 10%.

SBEE has been operating at only 25% of the annual projected revenue and the project is expected to help the utility to optimise grid monitoring, improve revenue, recover CAPEX and OPEX and improve cash collection per kilowatt. Commercial losses are between 10% to 40% due to a lack of accurate metering technology, fraud and intermittent services as a result of power deficits. The situation is further-compounded by ageing infrastructure which is negatively impacting operational efficiency.

For the initial phase of the rollout, large power users will be the focus of the installations.

If successful, a nationwide rollout will be implemented over a period of five years to more than 600,000 customers.

WI-SUN standard RF-MESH radio frequency communications technology will be leveraged for smart meter data telemetry between the utility and the smart meter.

Customers will pre-pay via a self-service internet portal, Android-based point-of-sale terminals or smartphone applications, but they can also be upgraded to a post-paid solution depending on their profiles.

The project lays a foundation for SBEE to deploy distribution automation applications to strengthen the resilience of its grid in future.

Babacar Diba, area vice president: Africa at Itron, said multiple projects have also been implemented in Tunisia, Kenya, Egypt, Rwanda, Morocco, South Africa and Tanzania as utilities seek to improve efficiency.

Governments and the World Bank, the biggest funder for energy, are pushing hard for an increase in the penetration of AMI in Africa.

Policies in the region are also changing in favour of AMI and importantly, funding – which has been an issue – is being addressed.

The kick-off costs of AMI projects is high despite the technology’s return on investment over a certain period of time being fairly certain.

At the same time, utility awareness on the benefits of AMI is increasing across the continent.

Factors hindering rollout of advanced metering technology

AMI installations are complex projects hence the need for full commitment between governments, utilities and suppliers. There is a need for utilities to change technology procurement processes to software-as-a-service (SaaS) at this simplifies project rollouts and training of utility staff so that they will be able to run the technology themselves The interoperability of different AMI hardware and communication systems is another challenge the industry continues to experience, hence the need for the use of open and highly secure communications technologies and standards such as WI-SUN, says Diba.

Asked to project the penetration of advanced metering in Africa over the next two to three years, Diba believes Africa will go faster compared to Europe and the US in a bid to catch up on the delay the continent has experienced in terms of adoption over the past few years.

What is needed is the goodwill from utilities to embrace the shift in business models towards digitisation, decentralisation and decarbonisation as well as commitments to make massive investments in grid modernisation and automation.