A perspective on justification, technology, funding, and connectivity
Though a utility’s low-end customer base may not contribute substantially to its revenue, the Batho Pele (People First) paradigm still requires that they receive the same level of service as their higher-end counterparts.
That is, utilities are still obligated to provide adequate quality of supply and collect due revenue timeously and efficiently from low-end customers as they would from high-end customers. Smart metering provides a means to address this paradox and, at the same time, supports financial sustainability and efficient business operations.
This article originally appeared in Issue 5 2016 of our print magazine. The digital version of the full magazine can be read online or downloaded free of charge.
The benefits of smart metering, for African utilities, in particular, is outlined comprehensively in DLMS/COSEM, an internationally recognised set of standards for metering data exchange. These include accurate billing, enabling timeous detection and response to meter faults and tampering, a substantial reduction in meter operation and maintenance costs and effective means of demand-side management. Certainly, these are desirable across a utility’s entire customer base, whether low-end or high-end and can lead to a more efficient electricity supply industry, where costs are concerned.
Traditional prepayment meter technology, without two-way communication, has delivered considerable benefits for African utilities over the past few years with regard to revenue management and collection. Recently, the technology has transitioned from single-part meters to split meters where the measure and control functions (MCU) and customer interface functions (CIU) are built as separate units. The MCU is typically located in a secure enclosure (e.g. a pole-top box) while the CIU resides on the customer’s premises. The CIU and MCU then communicate via an RF or PLC communication link.
The split meter approach has clear advantages such as limited customer access to the MCU, but has not been fully effective in deterring customers from tampering with the meter. For this reason, the argument is that split prepayment meters should be supplemented with two way communication, which to a large extent means replacing them with a cost and functionally equivalent smart metering technology.
Considering the above, rolling out smart meters to low-end consumers is justified. However, due consideration has to be given to the cost of the smart meter, connectivity and project funding.
A successful example of a split prepaid meter rollout is that of South African power utility Eskom. In 2013, the parastatal embarked on a project of installing split prepaid meters in Soweto, a large urban township in the city of Johannesburg, which resulted in a ZAR33.63 million ($2 million) revenue improvement in Soweto. The improved revenue collection is due to the installation of 40,000 split prepaid meters and having converted over 13,000 meters to prepaid mode. The figure is cumulative from July 2014 up to 28 February 2016.
Cost of smart metering technology
The second edition of NRS049 specification, recently published by the NRS Association3, is a significant milestone as this edition addresses requirements for the use of open communication standards in South African smart metering systems and ultimately, interoperability between meters from different vendors. The latter, when achieved, can enable economies of scale, which substantially reduce the cost of smart meters.
Furthermore, the NRS049 second edition is entirely built on the DLMS/COSEM standardisation framework – DLMS/COSEM, an internationally recognised set of standards for metering data exchange. The standards were initially developed by a group of utilities and meter manufacturers, belonging to the Device Language Message Specification User Association (DLMS UA), during the early 1990s. The objective of the DLMS UA was to provide a means for interoperable data exchange between multi-utility (all energy types) meters, independent of manufacturer, over a variety of communication technologies – with regard to communication functions of the meter. This is significant because though DLMS/COSEM can support a very rich feature, it can equally support a ‘minimal’ feature set. That is, meters built on DLMS/COSEM can be very advanced or simple, depending on the utility’s requirements but still be capable of two-way communication. In other words, DLMS/COSEM enables functionality and scalability.
Interoperability, we have noted, can enable economies of scale that substantially reduce the cost of smart meters. Furthermore, functional modularity will enable the deployment of a ‘top of the range’ smart meter for high-end customers where the full set of advanced metering functionality will be utilised fully; and deploy a ‘minimal’ functionality smart meter to low-end customers. In short, the utility will pay only for the functionality that it needs.
A well-known obstacle to the deployment of smart meters for low-end customers is inadequate cellular network coverage in areas where these customers are located. However, alternative Advanced Metering Infrastructure (AMI) backhaul connectivity options are being widely researched globally, and some are mature enough for large-scale deployment. These options include the use of TV White Space and a variety of long-range Lower Power Wide Area Networks (LPWAN), mainly at Internet of Things (IoT) applications. A key design criterion for TV White Space and LPWAN technologies is cost-effectiveness and long-range communication capabilities.
Thus, utilities are no longer tied to the single option of public cellular networks but have viable alternative connectivity options for supporting smart meter deployments in low-end customer areas.
Currently, most South African utilities employ a ‘piece-meal’ approach when planning the development of electricity infrastructure and/or services. However, in smart metering projects, a more integrated approach, with due consideration for all elements of utility operations that can benefit from the smart metering system, is necessary. Such an approach would spread the cost of deployment and return on investment across the greater utility business as opposed to just the metering department. This would leverage any smart meter business case.
Furthermore, the South African Government has recently shown glimpses of interest in funding smart meter projects. A recent smart meter Request for Information (RFI) advertised by the South African Department of Co-operative Governance and Traditional Affairs (CoGTA) and the announcement of a ZAR150 million ($10.7 million) smart meter pilot project for Nelson Mandela Bay, funded directly by the Department of Energy, are evidence of this. Both of these initiatives are aimed at the low-end of the utility customer spectrum. Therefore, though funding for South African smart meter projects continues to be in short supply, there is evidence that potential project funders, such as national government, are cognisant of the need for smart meter rollouts in low-end customer areas.
The rollout of smart meters for low-end customers is justified, considering the benefits associated with the technology, standardisation efforts that are driving smart meter interoperability, the variety of available cost-effective connectivity options – and the growing interest from government, a potential funder, in the potential of technology to efficiently address the service delivery needs of these customers.