Abstract
The privatization exercise that led to the creation of 11 distribution companies (Discos) is yet to yield the result of meeting the electricity supply needs of Nigeria. It is in realization of this fact that the Federal Government of Nigeria recently made different proposals and regulations to increase efficiency, availability, and competitiveness within the power industry. This article establishes a technical gain ratio to measure the impact of scaling up smart metering on the aggregated technical commercial and collection (ATC&C) losses. The ATC&C loss is the difference between the amount of electricity received by a distribution company from the transmission company and the amount of electricity for which it invoices its customers plus the adjusted collections loss. To achieve this objective, reviews of historical data of the Discos ATC&C losses and customers’ metering records as published by the Nigerian Electricity Regulatory Commission (NERC) for 2015, 2016, 2017, 2018, and 2020 were carried out. In addition, efforts were made to mathematically model the relationship between % metering and % ATC&C losses as this was the framework to help carry out effective forecasts and analyses of the study in order to show the impact level of the strategy employed. One of the salient technical contributions of this article was that it established that for every 1% increase in metering installation, there is a proportionate 0.8% decrease in ATC&C losses, provided all other factors responsible for technical and commercial losses remain constant. Consequently, improved ATC&C loss reduction would be achieved if Discos adopt a combination of other strategies that would ensure reduction in technical and commercial losses in addition to aggressive deployment of meter assets. However, in practice, factors causing technical and commercial losses are never constant as system components depreciate/burn out with time, energy theft, and pilferage, and meter tamper/bypass is on the increase daily; meter deployment is not aggressive enough to match utility customers’ growth. Hence, the adoption of combined modern strategies in addition to aggressive metering in tandem with customers’ growth has to be employed by Discos in a deliberate attempt to reduce ATC&C losses.
Highlights
The privatization of the power industry by the Federal Government of Nigeria was a thoughtful attempt to improve electricity supply, quality, and reliability across the country (Odje et al, 2018)
In order to quantitatively analyze the effect of scaling up smart metering on ATC&C losses, we assumed that all the distribution companies (Discos) in 2019 and 2020 implemented the strategy that would strengthen their systems to address all factors responsible for collection losses only and ensure the scaling-up of smart energy meters deployment by MAPs that would result in a 25% increase in the number of customers being metered on a year over year basis
The probable effect of Discos adopting this strategy of a 25% increase in the number of metered customers’ strategy on ATC&C losses is shown in Tables 4, 5 for the years of 2019 and 2020, respectively
Summary
The privatization of the power industry by the Federal Government of Nigeria was a thoughtful attempt to improve electricity supply, quality, and reliability across the country (Odje et al, 2018). To break the monopoly of Discos and improve the efficiency of supply, the commission has begun a process of approving regulations that would allow for the subfranchising of Discos original licensed coverage areas to eligible independent investors for effective operation and management This is a deliberate effort to increase the investors’ participation in providing financial liquidity that is required to aggressively build the power infrastructure (Nigerian Electricity Regu, 2019a). The Nigerian Federal Government Electricity Roadmap proposal lamented on the underperforming state of the distribution systems, quoting the country’s per capita consumption of electricity as of 2015 as 0.15 MWh/capita as against those of other African countries like South Africa and neighboring Ghana, which are 4 MWh/capita and 0.3 MWh/ capita, respectively, with the formal being the highest within the African continent These constraints have undermined the integrity of existing capacities, resulting in the underutilization of the overall power supply system value chain [Siemens (2019). Smart meter features include real time-and-date recording, load survey data, import/export data, and tele-metering-remote capacity, among others (Jain and Bagree, 2011; Jiang et al, 2016)
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