- Nigeria faces challenges implementing universal smart metering due to communication infrastructure limitations.
- The adoption of regular meters is increasing, with over 171,000 installed in Q1/2023.
- The absence of smart metering hinders efficient resource allocation, makes it harder to detect power theft, and compromises grid stability.
Experts in the electricity sector have emphasized that Nigeria might not be prepared to implement smart metering for all its electricity customers due to the absence of much needed communications infrastructure.
However, mass metering via the use of regular meters is gaining some ground.
The Nigerian Electricity Regulatory Commission (NERC) acknowledged significant improvement in Nigeria’s metering and information technology infrastructure in its 2022 Market Competition Report compared to the status as of 2013.
Despite this progress, the full deployment of the required technology is an ongoing process, at varying stages of implementation within both the wholesale and retail markets.
Consequently, Nigeria is not yet fully equipped to embrace 100% smart metering.
A source from one of the country’s distribution companies (DisCos) told Nairametrics that the electricity sector in Nigeria is far from implementing smart meters universally in households and businesses.
The reason behind this is that local manufacturers believe they should have a direct role in the distribution of smart meters to the general population.
However, the source highlighted that smart meters manufactured in Nigeria lack certain features necessary to address specific challenges within the electricity sector.
Additionally, achieving 100% smart metering adoption in the country is contingent upon having a smart national grid, which is not currently a primary focus of the sector because there are so many other immediate issues that the sector needs to tackle first.
This stance is also echoed in an October 2023 insight report from the Energy Markets and Rates Consulting (EMRC) Limited, which stated that smart meters, substations, and appliances are some of the fundamentals of a smart grid.
The EMRC report stated that smart grids can track the operations of systems connected to the grid as well as user preferences for consuming electricity while also providing real-time data on all energy events.
Knowing the difference between smart and regular meters
It is crucial to emphasize that the key distinction between regular meters and smart meters lies in the communication capabilities of the latter.
Smart meters possess the ability to communicate through a dedicated communication module, connecting to a remote backend system.
This facilitates the remote and real-time reading of meter data by the utility (DisCo) and allows remote disconnection without requiring a physical visit to the meter.
The evolution of smart metering technology has advanced beyond basic remote meter reading through AMI/AMR technologies to encompass IoT (Internet of Things)-based meters and devices.
These advanced systems can not only read meter data but also monitor the health of the utility’s network. Odion Omonfoman, the Managing Director of New Hampshire Capital Limited, shared insights with Nairametrics, stating that the current metering specifications outlined by NERC for smart meters focus on those utilizing 4G technology within the MAP and NMMP schemes.
Smart meters need backend communications infrastructure
However, despite the intelligence of these meters, equipped with GPRS-based communication modems, a significant portion of meters manufactured in Nigeria face limitations in remote communication due to insufficient network communication infrastructure. Omonfoman further highlighted that Nigerian meter manufacturers locally assemble both regular and smart meters, underscoring the country’s adequate capacity for smart meter assembly.
Nevertheless, he emphasized that deploying smart meters without the necessary communication infrastructure is an inefficient use of capital by distribution companies (DisCos). Ultimately, this inefficiency leads to higher electricity tariffs for consumers.
Consequently, a collaboration between NERC and the Nigerian Communications Commission (NCC) is essential to establish a standardized Nigerian smart meter communication protocol or a dedicated communication frequency exclusively for smart metering devices.
He said:
- “Aside from the challenges with the communication infrastructure which are outside the scope of DisCos or NERC to manage, there are other challenges. For instance, where these meters can be read remotely, many DisCos do not have the right technical analytics to analyze and optimally utilize the meter data remotely collected from the meters.”
Shola Ogunniyi, the Managing Director of Hacom Energy Limited, emphasized the significance of smart metering in the energy sector.
He said it enables real-time monitoring and communication of electricity usage, offering consumers detailed insights and aiding utilities’ inefficient resource management. Ogunniyi outlined key advantages, including enhanced energy efficiency, reduced wastage, and empowering consumers to make informed decisions about their consumption patterns.
He said:
- “As a consumer, smart metering allows me to monitor my electricity usage, recharge my meters remotely, and receive timely recharge reminders. Smart meters expedite the detection of illegal connections and aid in revenue loss monitoring.
- “Despite progress by Discos, Meter Asset Providers (MAP), and the Federal government’s National Mass Metering Program (NMMP) in narrowing the metering gap in Nigeria, the country has not fully harnessed the potential benefits of smart metering.”
Ogunniyi added that hurdles like low consumer purchasing power, telecom infrastructure limits, as noted by Omonfoman, and the recent NMMP 2.0 Project deadlock due to local meter manufacturers’ concerns may hinder broad adoption.
Metering data as of Q1/2023
On the other hand, the adoption of regular meters in the country is on the rise. In the Q1/2023 Electricity Market Report from NERC, it was stated that a total of 171,107 meters were installed between January and March 2023, representing an increase of 6,495 installations (3.95%) compared to the 164,612 meters installed in Q4/2022.
The new installations resulted in a 1.06 percentage point (pp) increase in net end-user metering rate in the Nigerian Electricity Supply Industry (NESI) between Q4/2022 (42.25%) and Q1/2023 (43.31%).
The report also noted that 158,634 meters were installed under the Meter Asset Provider (MAP) intervention while 9,931 meters were installed under the National Mass Metering Programme (NMMP) scheme.
A lack of smart metering can exacerbate sector challenges
Advocating for nationwide smart metering in Nigeria, Ogunniyi stressed the need to expedite its implementation. He emphasized that not adopting smart meters in the country’s electricity sector could have significant implications.
This includes inefficient resource allocation due to challenges in predicting and responding to demand fluctuations accurately. Such inefficiencies may lead to overloads during peak hours and under-utilization during off-peak periods.
Moreover, the absence of real-time monitoring makes it difficult to promptly identify and address issues like power theft or technical faults, potentially resulting in revenue losses and compromised grid stability.
Overall, the lack of smart metering could impede the sector’s progress towards a more reliable, sustainable, and consumer-centric energy landscape.
Ogunniyi further added that smart metering enhances electricity accessibility as Discos can plan based on consumption patterns and make informed return on investment (ROI) projections to enhance investments in power generation and distribution. Omonfoman echoed this viewpoint, affirming that the advantages of smart metering adoption for DisCos are multifaceted.
These include reduced operating costs, diminished commercial and collection losses, streamlined energy audits, and real-time tariff management. However, he emphasized that despite the benefits, smart metering entails substantial initial and recurring expenses.
Cost benefit analysis should be done before mass smart metering
According to Omonfoman, DisCos should conduct a thorough cost-benefit analysis before implementing smart metering solutions to ensure they can realize the benefits it offers. In the long run, it could be financially demanding for DisCos, involving significant upfront capital and recurring costs for both smart meters and backend meter data infrastructure.
Also, the prevalent communication challenges need to be addressed.
- As Omonfoman succinctly puts it; “from a cost versus benefit perspective, I do not think it is practical or prudent to adopt 100% smart metering in Nigeria because the costs for 100% smart meter roll-out for any DisCo far outweighs any benefits to the Nigerian Electricity Supply Industry (NESI).”
