Norman B Ndaba is the leader for Africa Power and Utilities Sector within management consultancy EY. The company, which is working on projects within South Africa, is an advocate of smart metering as the “missing link to Africa’s energy future”, as outlined in its publication Smart Metering – Transforming Africa’s Energy Future.
The prospectus states: “The power and utilities sector urgently needs to attract investors to increase generation capacity and mobilise people to consume energy efficiently.
“Introducing smart metering could be a fundamental ‘missing link’ to help the sector to achieve these goals.”
Smart metering in Africa is contentious and EY admits that achieving these benefits will “take hard effort”. But the global consultancy believes that accelerating to a more systematic smart metering rollout in the region will link directly to business benefits and promote growth.
We asked Norman B Ndaba, Africa Power and Utilities Sector Leader at EY, to share his top three predictions for the African metering industry.
1. Moving to base load
Mr Ndaba said: “The first and big challenge for African countries is to get base load power. Without it, smart metering shouldn’t exist.
Assuming we get base load power within the next five to 10 years, we expect to see South Africa, Nigeria, Kenya, Ghana and Namibia as the most likely countries to adopt smart metering systems.
South Africa ticks all the boxes for deployment. All the main drivers for adopting an advanced metering infrastructure are apparent – from regulatory, revenue management, energy efficiency, non-technical losses – but the challenge is for Eskom to get back into a cash positive position. It needs an injection of ZAR25 billion (USD2.3 billion).
There is also the question of smart metering making utilities more efficient and with efficiency comes fewer jobs – this could be a problem in South Africa.
In Nigeria, if the privatisation process works well, the country could surprise us big time but the issue there is cost – will the population be prepared to pay three to four times more for power than they are now.
Mozambique has issued smart metering tenders but the challenge is who pays? Do you have enough people on the grid in the first place?”
In all cases, it looks to me that the first port of call for smart metering is industrial users, as one, they can afford it and two, they are the ones looking at energy efficiency to help manage revenues.”
2. Smarter grid
Ndaba said: “Within the next 15 years, we could see smart grids in Africa.
South Africa is well on its way – the infrastructure is there and Eskom will have two new power stations functioning, but the question will come back to what the government wants – is it utility-scale renewable energy or smart grid.
In the same way as telecoms moved from fixed lines to cellular phones, what will be the jump in the energy sector?
Will countries move from a non-existent base load to a position where you have base load and can tag on all the other benefits such as renewable energy, natural gas, smart metering and grids?
Consumers are becoming more vocal and more powerful so in the next 15 years they will expect to see more changes.”
3. Metering equipment and suppliers
Ndaba said: “The cost of smart metering equipment is still high but we may see costs coming down, as experienced in the solar panel industry and the oversupply on the global market.
The issue of non-technical losses in Sub-saharan Africa, however, is a big one and means that meter units must be fitted with more security and safety features than their European counterparts, which adds 60-70 per cent to the cost.
To open up opportunities for contracts, metering suppliers and manufacturers need to lobby government to elect the necessary regulations and legislations to drive the smart metering market.
The renewable energy sector has a big lobby mechanism and government takes notice when you shout the loudest.
The smart metering and smart grid industry should find a good name for a lobbying group and then begin to make themselves heard.”