• Wednesday, June 12, 2024
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Overcoming issues around energy theft hinged on effective metering system


Electricity Distribution Companies of Nigeria (Discos) are constantly bedeviled by distribution losses occasioned by power theft, illegal connection, sabotaging power effort by power company staff and destruction of power infrastructure.

Only recently, Electricity distribution companies reported unpaid electricity bills from residential, commercial and industrial consumers as well as the Ministries, Departments and Agencies of the three tiers of government to the tune of N39.1bn by pre-privatisation and N39.5bn post-privatisation as well as the outstanding interest of N15bn.

The figures as presented by the Electricity distribution companies shows that Abuja Disco, N18.6bn; Eko Disco, N8.6bn; Kaduna Disco, 8.2bn; Enugu Disco, N7.2bn; Ibadan Disco, N6.8bn; Ikeja Disco, N5.9bn; Port Harcourt Disco, N6.8bn; Benin Disco, N5.8bn; Jos Disco, N6.5bn; Yola Disco, N2.4bn; and Kano Disco, N1.2 bn.

Analysts observe that if the issues surrounding distribution of power are not tackled, Nigerians will continue to experience shortfall in electricity supplies.

They are of the view that Discos may never overcome the challenges of huge revenue loss owing to Energy theft unless they perfect the strategic deployment of smart technology in their metering and monitoring processes stressing that the use of technology and the development of software can help save the country from unnecessary expenditure and fraud in the power sector.

Distribution Companies in Nigeria need to invest in smart technology that will detect if a consumer is bypassing their meters or not, Thomas Dada, Managing Director, Frontier Oil and Gas Limited said.

Dada observes that 40 per cent of generated electricity in the country is lost to theft and that a lot of people who use electricity do not pay for it. He recommended that the only approach to solving the issue of electricity theft is by heavily investing in smart technology and prosecuting those who steal electricity, those who by-pass meters, and those who use it without paying for it.”

In his words, “These energy thieves are not only shortchanging the distribution companies but also the entire nation”. He added that it is affecting everybody that has invested in the power sector

Dada further pointed out that huge investment in smart technology would eliminate this bottleneck in the future stressing that technology deployed by cable television network is a clear example of how smart technology can be deployed.

“The smart technology that operate with Cable television network ensure that  subscribers are automatically disconnected at the expiration of their package, Discos needs to work out something along this line if they ever want to address the energy theft issue” he said.

Discos and Gencos Issues

Available statistics indicate that the Discos have still suffered continued losses due to collection, technical and other commercial issues. In the early part of Buhari’s tenure, there was increase in the operational generation capacity, by almost 30 percent. There was also the execution of a handful of World Bank partial risk guarantees to support the financing of new IPPs.

In spite of these bursts of progress, experts observed that there are still some core structural issues that need to be addressed, and ensuring that Discos have adequate revenues to meet wholesale obligations, meet their OPEX and even go on to invest in new capacity.

According to industry watchers, the power sector value chain is interconnected, “if there is disruption, it cascades across the whole sector. Problems with electricity generation impact on distribution and in turn distribution collection losses, which undermines the financial well-being of all market participants.

“Building new generation capacity is not sufficient as it needs to be supported by adequate and stable upstream gas supply, and it also needs to be underpinned by additional transmission capacity”  they noted. 

Technologies to curb Energy theft:

Ayodele Oni, a solicitor that specialises in international energy law and policy in a recent write up suggested that a Smart Grid technology be deployed by power companies to address the power challenge.

According to him, smart grid is a modernised electrical grid Information and Communication Technology (ICT) to gather and act on information about behaviours of suppliers and consumers, to improve efficiency, reliability, economics and sustainability of the production and distribution of electricity.

He however noted that this is still not widely used around the world, but a lot of Countries, have started making it mandatory for power companies to install Smart Grids within the next couple of years.

“As electricity costs continue to rise and the importance of concepts such as environmental friendliness, sustainability and inter-generation equity soars, it becomes increasingly clear, that energy efficiency is now an important consideration for everyone. Incandescent lamps should be replaced with LEDs and CFLs, attitudinal changes such as switching off appliances not in use, should be encouraged and newer technologies and attitudes should be encouraged”, he said.

Experts take

Dolapo Oni Head, Energy Research, Ecobank Development Company (EDC) Nigeria Limited opines that government would always have to take the lead by making the business environment stable enough to attract investment in smart technology that will tackle the energy theft.

Oni further stressed that the government must support to ensure the right tariff are being paid because “If the right tariff are not being paid, investors are not able to guarantee rate of return, they will not invest money which is what the private sector wants”.

According to him, “Government need to ensure that the right tariff are set up and need to create regulation to support proper collection of tariff , criminalise power theft (illegal connection) so that people will pay for power. Give people the option of being able to switch to any source of power that they want to use”.

He further insists that Government should enforce the roll out of meters. Discos should deliver meters to everybody. You can charge it over a period of time, but everybody should have proper meters. These are things government need to put in place.

“Transmission is still in the hand of government. They need to expand transmission capacity. Transmission should always lead generation. You cannot be generating 7,000 megawatts and be transmitting only 4,000” 

“If government wants to privatise transmission they should go ahead. Most countries have moved away from this national grid structure. Most countries have their grids broken down into several segments so that you can have a northeastern grid and various grid connections. That is what we need to start exploring the idea of breaking down the grid and making sure that it works”, he said.