International Experience in Electrifying Urban and Peri ...siteresources.worldbank.org/EXTAFRREGTOPENERGY/... · International Experience in Electrifying Urban and Peri-Urban Areas:

6/10/09 Connie Smyser, Smyser Associates 1

International Experience in Electrifying

Urban and Peri-Urban Areas: What

Technology Can and Cannot Do

By Connie Smyser

For African Electrification Initiative Workshop

Maputo, Mozambique

June 9-11, 2009


Overview

• Background

• Technological and Programmatic

Elements

• Applications in Different Urban and

Regulatory Contexts

• Lessons Learned

• Factors Affecting Sustainability


Reasons for and constraints to electrification

affect program design

• Reasons

– Reduce losses / increase revenues

– Meet universal access requirements

– Rebuild war-torn or neglected grids/systems

• Constraints

– Legal and regulatory

– Financial


Reducing Losses and Increasing Revenues

Effort usually focuses on one or more of the

following:

– Losses: Technical and non-technical

– Payment performance

– Collections performance

– Adding new revenue sources

– Increasing or decreasing consumption (depending on

supply availability and affordability)


Technical and Non-Technical Loss

Reduction

• Technical losses: myriad points of attack. Conventional solutions can generally be applied.

• Non-technical losses can comprise one or all of the following:

– Theft by registered customers

– Theft by illegal consumers

– Graft/collusion with company personnel

• Programmatic and technical approach to non-technical losses will depend on which type that they are.

Initial Identification of Source of Losses

25%

15%

10%

35%

10%

5% MT & LT technical losses

Meter malfunctions

Theft and illegal

connection

Billing/reading errors

Non-payment

Miscellaneous

Typical example (derived from India): this DISCO

might attack technical losses and internal

incompetence first; then move on to theft and non-

payment.


Technological and Programmatic Elements

for Eliminating Theft

• Community engagement and building of trust; social compact

• Preparation for electrification– Physical and operational design (tailored to likely level of theft),

– Incorporation of community and potential customers’ characteristics and idiosyncrasies and regulatory and/or institutional mandates/constraints.

• Implementation– Electricity education for potential customers

– Prepare structures (deal with safety issues) and improve affordability (e.g., replacing inefficient lighting)

– System installation

• Post implementation– Customer and community satisfaction

– Ongoing engagement and assistance with payment and other problems encountered

– Ongoing vigilance

• Scale up


“Smart” Technology Helps• Synergies: Area metering and

comparison with billed consumption can help pinpoint both technical and non-technical losses and focus investments in anti-theft technology.

• Electronic (“smart”) meter systemshave a range of functionality: e.g.,

– remote reading,

– disconnection,

– tamper detection and communication,

– prepayment option and

– delivery of “social” quantities of electricity.

• GIS systems useful, inter alia, in designing electrification for informal areas with irregular land tenure and development patterns and for pinpointing likely sources of theft and/or technical losses. Angola DISCO used GIS and community input to map areas accurately prior to electrification. Indian DISCO uses GIS in smart grid operations.

Theft, Graft,

Illegal Access

“Smart” technology

enables detection and

management of losses

Technical

losses

Smart technology is only as

good as the resolve and

capability of the DISCO to

use it rigorously.


Removing Temptation with “Smarter”

System Configurations

• Higher poles discourage tapping into distribution lines

• Meters with remote reading capability located high on poles reduce tampering; customer interface unit in home allows customer to track usage.

• Moving MV lines closer to LV lines makes tapping riskier for thief.

Anti-theft configuration (Ampla, Brazil)

A taller pole (10 m)

Transformers with small capacity (12

customers per transformer)

Every MV/LV transformer has a

meter

Low voltage cables are together

Distribution boxes and connections

are not reachable from the pole

Larger distance between the low

voltage network and the pole


Configurations (2)

• Enclosing ground level meters and situating them to be visible from the street also help.

• Using insulated or coaxial cables, particularly in service drop, reduces ease of illegal tapping into distribution lines.

Burned out meter after attempt to

connect to coaxial cable in service drop

Burned out meter after attempt to

connect to coaxial cable in service drop

Meters in plastic enclosures

Examples from AES Eletropaulo, Brazil


Non-payment is not a priori a

technology issue but technology helps

• Low income customers generally have good payment performance unless habituated to “free” electricity.

• But arrears are common because families live close to the margin and cannot “save up” to pay a monthly bill.

• Improving energy efficiency of accustomed usage is effective for maintaining payment performance.

• Prepayment systems allow the purchase of what is affordable. – DISCO improves collections, eliminates billing, meter reading,

disconnection but still has to be vigilant for potential theft situations.

– “Split” meters (meter inaccessible on pole and separate read-out in the home) reduce ease of theft while preserving customers’ ability to monitor usage.

– Two-way communication allows for better, real time system information but is more costly.


Prepayment systems can be linked

to social assistance efforts

If a customer uses

electricity wisely, sufficient

electricity will always be

available. Customer can

purchase additional

energy as desired.

Argentina’s Electricity Fixed Invoice (Plus)

Source: ENRE Argentina

>The customer contracts for, or is granted

by subsidy, a fixed amount of energy.

>A small quantity of electricity is credited

every 15 seconds

Customer is constantly informed of electricity

demand & supply balance and cumulative credit.

LCDFriendly icons

Low-Credit Alarm(visual & audible)

Consumption Rate Indicator

LCDFriendly icons


Consumption Rate Indicator

LCDFriendly icons

LCDFriendly icons



Consumption Rate IndicatorConsumption Rate Indicator


Applications in Different Contexts

• Each solution is tailored to the context.• Continuum of low to high tech of approaches:

– No meters, fixed invoice, load limiters, & periodic “sweeps” to disconnect illegal connections (Dominican Republic & Kenya)

– Master meter with sub-meters and community representative doing collections (Morocco)

– Perimeter-based elevated individual meters (Philippines)– Ground level enclosed meters with tamper signals to DISCO (India)– Split-meter prepayment system with smart configuration and macro-

metering (South Africa)– Strategic use of technology and customer investments: Visible ground-

level conventional meters with coaxial cable service drop and intensive effort (and investments by DISCO) to reduce consumption to affordable levels (Brazil)

– Elevated electronic meters and smart configuration with macro-metering and energy balancing. (Brazil, Chile, Colombia)

• The higher tech approaches are more effective but more costly.


Load Limiters Kenya/Nairobi

• Pilot for 21,000 households: electrification, elimination of illegal extensions and extortionist cartels. Commercial losses estimated at 40%.

• Electrification Approach– Community based approach for power supply, where one service cable supplies one plot

with approx 7-10 households through a load limiter

– Service turret located on the pole top for security reasons

– Installation of miniature circuit breakers (MCBs) with grounding

– Insulated cables used on high poles to ensure safety

– Internal wiring to be provided by community based labor

– Provision of standard ready-to-use unit (Ready Board) for use in the households

– Customer costs: deposit before connection, connection charges and fixed monthly payment

• Problems: – Lack of local technical expertise for standardized internal wiring

– Goal incongruence between tenants and landlords

– Challenges for disconnection

– Increase in power usage by legal customers tripped the load limiters causing loss of sales to the utility

– Shift to the use of automatic load limiters, in order to avoid manual resetting, still had problems of customers being able switch off excessive loads within the time delay set

• Way Forward: Replace load limiters with prepayment system.


Load Limiters in Slum Electrification /

Dominican Republic• Initial conditions (2001):

– 20 hour power disruptions, GoDR need to reduce subsidy to sector.

– Social contract agreed: GoDR subsidy for slum areas, fixed monthly payment by customers, DISCOs to invest in system upgrade in slums, 2 year sunset clause

– Slum program only a small proportion of overall subsidization of the sector

• Program results– Collections varied by DISCO from 25% to less than 10% (avg. 14%)

– Disconnections ineffective because of active illegal service providers (ISPs) reconnecting (HHs pay ~6% of family income to ISPs; >10 electrocutions/month)

– Large errors of inclusion and exclusion in receipt of subsidy targeted geographically

– DISCOs too comfortable with GoDR operational subsidies. Infrastructure investments not made.

• Load limiters in overhead lines were one option tried to limit amount stolen or not paid for. But ISPs skilled enough to bypass them.

• Solution to sector problems still elusive. Program continued despite faults past sunset (6 years).


“Temporary” Electrification (Morocco)

• GoM has policy of eliminating slums (City without Slums campaign.)

• Municipalities have responsibility to provide water, electricity and other utilities and contract out such services.

• Concessionaire in Casablanca, LYDEC, wanted to stem theft by slum residents but city did not want to perpetuate slums.

• DISCO proposed temporary electrification (could be removed within 24 hours if required.

• Approach used master meters on perimeter of slums with sub-meters and community representative making collections and aggregating them to pay DISCO for consumption billed from master meter.

• Payback was less than one year.

• Most of the slums are still there and receiving service in this way.

• Principles set-up for electricity adapted to water supply and sanitation.

3 700 000 pers en domicil.

800 000 pers par B.F

Logement

Réseau Lydec

Compteur collectif

Réseau privé

Compteur

individuel

Household

Lydec’s

Network

Collective

meter Network managed

by local

intermediary

Individual

meter & circuit

breaker

LYDEC MNGT DELEGATED MNGT to LOCAL OPERATORS





LogementLogement

Réseau Lydec

Compteur collectif

Réseau privé

Compteur

individuel

Compteur

individuel

Household

Lydec’s

Network

Collective

meter Network managed

by local

intermediary

Individual

meter & circuit

breaker

LYDEC MNGT DELEGATED MNGT to LOCAL OPERATORS

Source: Morocco, Casablanca, LYDEC

LYDEC Electrification Scheme


Perimeter-based elevated individual meters

(Meralco / Philippines)

• Lack of right of way was a barrier to electrifying slums.

• DISCO used wall of meter boxes installed at perimeter of slum. Reduced connection costs and financial assistance for safe wiring in houses.

• Communities organized to collect funds for line extension and connection.

• Approach rapidly and cheaply electrified slums but led to high levels of theft (among residents), especially given long distribution lines from homes to meters and disconnections for non-payment.

• Subsequent phase went to elevated meter centers, tamper indicating signals, and shielded cables to reduce access by thieves.

• Overall system losses reduced almost 4 percentage points (from 14.8 to 11.1%).

Initial approach:

meters and

cable from

meter to homes

too accessible

to thieves.

Subsequent phase


Ground-level enclosed meters with tamper

signals to DISCO (India)

Modem interlocked

with Panel doors

Opening of Door sends SMS

To Control Center

Modem interlocked

with Panel doors

Opening of Door sends SMS

To Control Center

Source: Reliance, Mumbai

DISCO monitors tamper signals and sends crews to investigate on site.

Use of SMS communication allows quick response to tamper signal.


Comprehensive approaches

• ESKOM / South Africa: Split-meter

prepayment system with smart

configuration and macro-metering

• ENDESA Group: Brazil, Chile, Colombia:

Smart configuration, elevated meters with

macro-metering and energy balancing.


Strategic Use of Technology and Consumer

Assistance (AES Sao Paulo, Brazil)

• Pilot project incorporated lessons learned by previous efforts (140,000 HH).

• Approach: Visible, ground-level conventional meters with coaxial cable service drop and intensive effort to reduce consumption to affordable levels and improve safety within the homes.

• Investments by DISCO in system upgrade, safety improvements, public lighting and energy efficiency and safety measures within homes.

• Payback on $1.8 M investment of less than 1.4 years.


Cost Issues

• The smarter (more effective) the technology, the more it costs. ROI may or may not justify the investment.

• Focusing theft control technology on worst areas can improve ROI.

• Spreading cost over larger customer base and using it to reduce all types of losses also helps.

• Where low cost options are the only answer, emphasis must be on customer relations and vigilance.

No

n-t

ech

nic

al L

osse

s

RO

I o

n I

nve

stm

en

t in

AT

te

ch

Proportion of or number of customers “controlled”

Optimal point of

investment in AT

technology

Optimal point of

investment in AT

technology

>1

Optimizing Investment in Anti-theft Technology

LossesROI


Time Scales and Relative Costs

• Loss reduction programs can take up to 10 years to get theft problems under control for all customer segments. Codensa, Colombia and Chilectra, Chile both had time scales on the order of 10 years from beginning to “control.”

• AES Eletropaulo’s experience showed that the anti-theft component of a program might be as little as 30% of the total costs that include upgrading the distribution system, engaging the community and assisting new customers with energy efficiency improvements.


Regulatory and Institutional Barriers:

Examples of Workable Adaptations

• Lack of government approval to electrify an informal area: “temporary” electrification (Morocco)

• Lack of tenure: Certificate of no-objection (India)

• Lack of right of way: perimeter electrification (Manila)

• Illegal on-selling: regulator acquiescence to need for investment in grid extension and safety upgrades. (Senegal, in initial stages)

• Graft and collusion: feeder level metering to isolate instances (Georgia)


Lessons Learned (1)• Once theft is “institutionalized,” it is very hard to

eliminate. Avoidance is best; if not, degree of technical solutions may have to be elevated. Where there is hard core theft, programs may take a decade or more to bring areas back under control.

• Start with the areas with the greatest amount of theft (may not be low income).

• Low income areas may require additional special treatment, e.g., assistance with safety, efficient consumption, bill payment, manner in which collections are done.

• Technological solutions are only as good as the ability to manage them and the good will of customers. The DISCO must keep its bargain to provide reliable and safe service to customers, rich or poor.


Lessons Learned (2)

• Energy efficiency assistance can help ease the burden for consumers turned paying customers.

• In addition to their benefits for the DISCO, prepayment systems help customers control their usage and decide when to go without if necessary.

• Multi-year commitments are usually necessary to truly bring theft and payment problems under control. Strategy may change as time goes on, depending on learning during the process.


Long term, multi-prong effort required to meet

permanent challenge

May 198422.6% Losses

May 198422.6% Losses

Pilot project on Economic

Aerial Distribution

Pilot project on Economic

Aerial Distribution

Economic Aerial

Distribution (DAE)

Economic Aerial

Distribution (DAE)

Important Client ProjectImportant Client Project

Concentric Aerial

Distribution (DAC)

Concentric Aerial

Distribution (DAC)

Focus on

problem areas

Focus on

problem areas

Shielded Anti-theft Meter

box with tamper shut down

Shielded Anti-theft Meter

box with tamper shut down

Work in slums; ethnographic

studies

Work in slums; ethnographic

studies

Acme Grid and Company

Social Responsibility

Acme Grid and Company

Social Responsibility

12 month indicator of electricity losses at Chilectra (from 1981-October 2007)

Tecnical Measures

Implemented(PIMT)

Tecnical Measures

Implemented(PIMT)

Source: Chilectra, Chile


Sustainability

• Community engagement is essential to initiating and successfully completing operations in informal areas.

• Options that require “sharing” a meter (e.g., multiple families in one house) or are non-metered, such as fixed invoice, may be necessary at first but should be considered temporary as they inevitably lead to payment problems and unhappy customers.

• The high cost of anti-theft technologies and/or smart grids requires “smart use,” e.g., – Starting with the largest sources of theft (could be commercial or

industrial customers) and working down to lesser sources

– Tailoring the approach to local conditions and severity of the problem and targeting technology to the most egregious cases.

• Willingness to use “workable adaptations” may be the key to overcoming regulatory or institutional barriers.


Sustainability (2)

• Schemes that limit entrepreneurial activities (such as load limiters) run counter to desired economic advancement of poor households.

• Economic development and income generating schemes improve community acceptance and ability to pay. COELBA, Brazil: credit for recycled waste on utility bill.

• Safety and security improvements also help. – Internal rewiring for safe electricity usage (Brazil, proposed for

Senegal) reduces liability of DISCO and improves community acceptance.

– Security from added public lighting is one of most often cited benefits by new customers.


For more information

• Useful documents available– 2004 Report on “Innovative Approaches to Slum Electrification”

– 2005 Practitioners’ Workshop and Proceedings (Salvador, Brazil)

– 2006 Development of projects in Angola and, with the International Copper Association, in India and Brazil.

– 2007 Practitioners’ Workshop and Proceedings (Sao Paulo, Brazil)

– AES/USAID/ICA Brazil Slum Electrification and Loss Reduction Case Study, February 2009

– USAID Optimal Feeder Technology Tool Kit, to be published June, 2009

• Pedro Antmann, World Bank, “Strategies to Achieve Sustainable Improvements in Operational Performance of Electricity Distribution Companies,” available by request from [email protected]

• Connie Smyser, Smyser Associates, [email protected] (URLs for above citations available upon request.)

mailto:[email protected]

mailto:[email protected]

Documents

International Experience in Electrifying Urban and Peri ...siteresources.worldbank.org/EXTAFRREGTOPENERGY/... · International Experience in Electrifying Urban and Peri-Urban Areas: