Prepaid Smart Meters Will Help Africa Recover Revenue Losses

The prepaid smart meter will help Africa’s utilities to reduce non-technical losses, thereby recovering growing revenue losses.
Published: Mon 02 Jun 2014

Africa cannot afford not to adopt prepaid smart metering solutions since this technology will help them recover significant losses in revenue due to growing non-technical losses. This is according to Chandra Prakash, Vice President, Sales (Africa and middle East), EDMI, who spoke to Engerati at the African Utility Week 2014 conference.

Finger not on the pulse

In Africa, many utilities use meters with limited communication capabilities. As a result, utilities have to assume that meters are working properly. Realizing that utilities don’t exactly have their “finger on the pulse”, many consumers tamper with their meters to avoid paying for their electricity. This tampering leads to a significant loss of income for the utility.

Most of these non-technical losses occur in the industrial and commercial sectors which is generally the utility’s biggest source of income. Manipulation of the meters is creating a 20% plus loss for the utility, says Mr Prakash.

However, once smart prepaid meters are installed, utilities can expect to see a 70-80% improvement in revenue. This return in investment can be realized in two to four years. The smarter meter helps utilities locate tampering and defaulters can be disconnected immediately.

Mr Prakash points out that with the smarter meter, consumers are less likely to tamper with the meter.

But, it’s not only about tampering. In most African countries, many residential areas (about 30-40%) are simply not connected to a meter or at least a working one. Mr Prakash points out that rapid rural electrification projects have left many without working meters.

Africa-at a technical advantage

Many are wrong to assume that Africa’s technology is out of date. According to Mr Prakash, Africa has an advantage over developed countries as they are now receiving the most up-to-date technology whereas many developed countries have less modern equipment as they adopted their meters many years ago.

We asked Mr Prakash about the construction of a new smart grid to accommodate the smarter meters and whether Africa’s utilities are willing to pay for them. He said, “Utilities are generally happy to pay for it since the long term benefits of the smart prepaid meter far outweigh the initial cost.”

Electrification in Africa is currently under 10%. However, this is changing as urbanization has increased and countries’ economies are beginning to prosper. It is for this reason that African countries need to monitor their electricity consumption in a smarter way so that utilities don’t lose income.

With regards to the roll-out process, Mr Prakash says that it is important that utilities explain the smart meter technology to customers prior to the roll-out. He says that the customer must understand how the meter will benefit them. “It will help them understand their consumption levels better, they will receive more accurate bills, and recovered revenue will help utilities reduce escalating rates, and improve their service delivery and increase access rates.”