Introduction
Digitisation of the Nigerian electricity industry is the key to a successful energy transition and solution to the high technical and commercial losses, making it difficult for distribution companies (DisCos) to recoup investment returns from end users. To this end, all consumers and generators should be able to communicate permanently with each other so that the electricity system as a whole function safely and efficiently.
Modern metering devices are digital meters where the customer can read consumption values. The prepaid meters rolled out by the Nigerian DisCos are good examples of modern metering devices. On the other hand, smart meters are also modern metering devices but have a communication module and a smart meter gateway, which can be used for more than just monitoring. These smart meters are essential if the electricity distribution operations and customers’ energy management are to improve.
Historical Trend Analysis of the Metering Situation in Nigeria
The National Electric Power Authority (NEPA) operated a vertically integrated structure in its primary functions of generating, transmitting, distributing and marketing electricity in Nigeria. This state of affairs persisted until 2006 when NEPA was unbundled into 18 successor companies in line with the power sector reform programme of the Federal Government of Nigeria. The procurement of meters for all aspects of the electricity business in Nigeria was centrally coordinated at the Head Office of NEPA, where requests were received and treated from a central pool. Metering instruments, including Grid Meters for Generation/Transmission, Transmission/Distribution and Distribution interconnecting points, were procured and deployed to all the stations centrally. The DisCos were saddled with the obligation of allocating and installing the meters at customers’ premises. A Grid Metering group was responsible for the installation and maintenance of Grid meters. Three Meter Test Stations were located in Lagos, Kaduna and Port Harcourt. These stations were primarily responsible for calibrating and repairing all the types of meters in the network and certifying the integrity of the meters before deployment and installation. However, with the implementation of the Power Sector Reform Act 2005 and the unbundling of PHCN, the processes involved in the procurement and deployment of metering systems were also being restructured. Some form of autonomy has been achieved as the DisCos can now procure and install meters independently. Given the centralised administration of metering in PHCN, and the inefficiencies in delivering meters to customers, there exists a great deal of dissatisfaction among customers across the country on billing and metering generally. Electricity Customers across the country have complained about exploitation and corrupt tendencies by the distribution companies in their metering, billing and collection of charges. There have been numerous instances of estimated billing and customers who have paid for meters and not received them after waiting for a seemingly endless period.
To a large extent, the gap in grid metering is being met, but there remains a considerable gap in the level of metering of residential customers. The lack of adequate meters contributes to the high level of commercial losses as customers are disenchanted with paying bills that they often dispute as inaccurate. Currently, DisCos uses two methods of the metering system; the post-paid (analogue) billing system and the digital pre-paid meter, which are inefficient due to their limited technology. There is an urgent need for DisCos to adopt smart metering technologies in managing their daily operations, as these will aid in achieving transparent billing and optimising revenue whilst resolving customers’ complaints and boosting their confidence.
Benefits of Smart Meters Across the Value Chain
The benefits of adopting smart meters into the Nigerian electricity network cut across the value chain, including the utilities (electricity companies), the customers (residential, commercial and industrial) and the Nigeria State at large.
Some of the significant benefits of Smart Meters to customers, the state, and utilities include:
- Utilities can detect and restore service more quickly in the event of an outage, resulting in less disruption in their customers’ homes or businesses.
- With time-based rates, customers have greater control over their electricity use and billing, allowing them to choose from various pricing plans to manage their electricity consumption and billing. Smart Meters enable utilities to measure customers’ electricity usage in hourly increments. Suppose their customers choose to participate in time-based rates offered by the utility. In that case, they can lower their electricity demand during “peak” periods (the peak period for most Nigerian utilities is after work hours in the evening), and the customers can save money on their monthly electric bill.
- Provides detailed information about electricity usage and costs to assist customers in making informed decisions. Smart meters are equipped with comprehensive information on customers’ energy usage and can further make informed decisions on optimising their electricity consumption and reducing their bills. For instance, smart-meter customers can access their previous day’s electricity usage through their utility’s website. With technological advancement, in the near future, by installing an in-home display device that communicates wirelessly with smart meters, customers could monitor their electricity usage and costs in real-time (similar to the price and quantity displays on a petrol pump), allowing them to adjust their usage instantaneously in response to changes in prices or system reliability events. Also, customers could receive automatic alerts (via emails or text messages) to notify them when electricity consumption exceeds a predetermined threshold.
- Increases privacy and confidentiality as electricity usage information can be relayed automatically to the DisCos for billing purposes without on-site visits by a utility to check the meter. Thus, this further results in lower operational costs for the utility, which means customer savings as utility rates reflect the utility’s operation cost. Additionally, as technology improves and changes over time, customers can enjoy those improvements without the utility replacing their meters.
- The environment is protected by reducing the need for power plants or by avoiding the use of older, less efficient power plants. Since peaker plants usually emit more greenhouse gases and other air pollutants, the environment benefits when they are not used to meet high demand. This benefits all utility customers because the costs of building new power plants or relying on older, less-efficient power plants are eventually passed on to customers in retail rates. Building power plants that are necessary only for occasional peak demand is very expensive. A more economical approach is to enable customers to reduce their demand through time-based rates or other incentive programs.
Smart Meters are the first step toward creating a Smart Electricity Grid in Nigeria. With a Smart Grid, digital technologies are applied to every aspect of the industry, from generation to transmission, to distribution, to the customer interface. This aids the grid in sensing what is happening to the energy flow, keeping it in balance, improving reliability and making the grid more resilient in the face of outages and other problems.