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Sam Amadi, PhDSam Amadi, PhDChairman/Chief Executive Officer
Nigerian Electricity Regulatory Commission
(NERC)
Nigeria
TOPIC:TOPIC:
Nigerian Energy Landscape: Nigerian Energy Landscape:
Understanding The Metering ClimateUnderstanding The Metering Climate
OutlineOutline1. Introduction2. Overview of the Nigerian Energy Sector3. Institutions Associated with Metering in the NESI4. Metering Points in the NESI5. Metering Issues in the NESI 6. Consequences Of These Issues7. Metering Challenges 8. Drivers for Smart Metering in Nigeria 9. Historical Metering And New Trends10. Factors Bringing Resistances to Cutting Edge Solutions11. Components of Successful Implementation Strategies12. Progress so far…13. Conclusion
� Nigerian Electricity Regulatory Commission (NERC) is mandated by the Electric Power Sector Reform Act (EPSR Act 2005) in S.32(1b) to maximize access to electricity services by promoting and facilitating consumer connections to distribution systems in both rural and urban areas.
� The Commission since 2007 has identified the pivotal importance of metering in meeting and improving the customer experience which has been full of mixed reactions when the country’s electricity sector was totally under a state-owned monopoly.
IntroductionIntroduction
� Access to electricity supply in Nigeria is currently less than 50% of the Country’s population.
� Total customers figure is about 5.4 million.� There is a very wide metering gap in the Nigerian Electricity
Supply Industry (NESI) with only about 66.8% metered customers.
� Utilities are unable to meet the growing demand for power, due to myriad of problems ranging from inadequate generation resources, poor gas facilities, low energy mix, weak and inadequate transmission network, poorly-managed distribution network leading to low access and high emergency generation.
Introduction Introduction (Cont’d)
Data Value
Electricity - production: 30.66 Million MWh (2011 est.)
Electricity - consumption: 28.51 Million MWh (2011 est.)
Electricity - exports: 1.34 Million MWh (2010)
Electricity - imports: 0 kWh (2011)
Oil - production: 2.458 million bbl/day (2010 est.)
Oil - consumption: 279,000 bbl/day (2010 est.)
Oil - exports: 2.102 million bbl/day (2009 est.)
Oil - imports: 187,700 bbl/day (2009 est.)
Oil - proved reserves: 37.2 billion bbl (1 January 2011 est.)
Natural gas - production: 23.21 billion cu m (2009 est.)
Natural gas - consumption: 7.216 billion cu m (2009 est.)
Natural gas - exports: 15.99 billion cu m (2009 est.)
Natural gas - imports: 0 cu m (2009 est.)
Natural gas - proved reserves: 5.292 trillion cu m (1 January 2011 est.)
Source: 2010 Annual Market Report (Market Operator)2011 EIA Facts File
Overview of the Nigerian Overview of the Nigerian EnergyEnergyIndustryIndustry
� The Nigerian Electricity Regulatory Commission (NERC) oversees the Electricity Industry only.
� The Oil and Gas sector has several entities which oversee the upstream (Ministry of Petroleum, Nigerian National Petroleum Corporation (NNPC))while the Department of Petroleum Resources (DPR) oversees the petroleum downstream sector. The Petroleum Products Price Regulatory Agency (PPPRA) sets final user tariff for petroleum products.
� The gas sector has no commercial distribution system in Nigeria like the electricity sector.
� This presentation focuses only on the Electricity Met ering Climate in Nigeria.
Overview of the Nigerian Overview of the Nigerian EnergyEnergyIndustry Industry (Cont’d)
66
Overview of the Nigerian Electricity Overview of the Nigerian Electricity Supply IndustrySupply Industry
Source: KPMG Electricity Sector Report 2011
Overview of the Nigerian Electricity Overview of the Nigerian Electricity Supply Industry Supply Industry (Cont’d)
Overview of the Nigerian Electricity Overview of the Nigerian Electricity Supply Industry Supply Industry (Cont’d)
Source: Metering Inquiry Committee 2012 (Unpublished)
� Utilities – 6 GENCOs, 1 No Transmission Company and 11 No SC-DISCOs
� NERC – Regulates metering through the Market Rules, Metering Code, Connection and Disconnection Agreements etc, and other regulations or orders.
� Standards Organization of Nigeria (SON) – Mandates Standards� Market Operator � Consumers – Residential, Commercial and Industrial� Meter Manufacturers and Vendors
� Meter Test Stations (MTS) – Oshodi, Port Harcourt, Kaduna and some private MTS
Institutions Associated with Institutions Associated with Metering in the NESIMetering in the NESI
Metering Points in the NESI Metering Points in the NESI (Grid)(Grid)
Most of these are unmetered, about 31 meters are presently been installed
Most of these are unmetered, about 31 meters are presently been installed
Source: 2010 Annual Market Report (Market Operator)
Metering Systems in the NESI are characterized by the following shortcomings:
- Substantial number of metered customers are billed, but still onestimation .
- Faulty Installations.- Divergent/Conflicting Choice of Technology (functionalities) from
Disco to Disco.- Maintenance (the MMF Saga).- Administration (New Services, Ownership, Replacements,
Timeliness, etc).- Penetration.- Tampering and Bypassing.
Metering Issues in Metering Issues in the the NESINESI
� Estimations and Overbilling
� High Technical Losses
� Poor Energy Accounting
� Poor Collection Efficiency
� Customer dissatisfaction
Consequences of These IssuesConsequences of These Issues
The Metering Code expects of any Metering System:� Adherence to minimum standards� Accuracy of measurement� Efficient transmission of data through adequate communications
network� Cost effectiveness� Security of metering system and data� Adequate feedback for parties served by meter� Total energy accountability� Fulfillment of clear Owner and User responsibilities
Metering ChallengesMetering Challenges
Historical Metering And New TrendsHistorical Metering And New Trends
Expectation Electromechanical Electronic Prepayment
Future Smart Metering with
Prepayment and remote
disconnect/reconnect
Adherence To Minimum
Standards
Yes Yes Yes Yes
Accuracy Of
Measurement
Within a range Yes Yes Yes
Adequate
Communications
Network
No No No Yes
Cost Effectiveness
Affordable without budget
function
Affordable without
budget function
Costly with budget
function
High Capital outlay with budget
function
Security Of Metering
System And Data
Tamper, wrong reading, and
bypass
Bypass Bypass Highly secure
Adequate Feedback For
Parties
No No No for keypad but
yes for smart card
through manual
means
Yes
Total Energy
Accountability
No No No Yes
Owner And User
Responsibilities
Yes Yes Yes Yes
Source: KEMA
� Anti-theft of electricity and surveillance capability� Energy accounting and Loss control� Remote collection of real-time data for billing and analysis on
demand and on schedule� Guaranteed cash flow through popular PPM functionality
(solving the problems of inflated billing efficiency and poor collection efficiency)
� Customer control of budget and enhanced decision making � Smart metering already in Nigeria in the form of Automated
Meter Reading (AMR) for MD customers and Grid metering
Drivers for Smart Metering in NigeriaDrivers for Smart Metering in Nigeria
� Existing PPM clusters may be upgraded to smart metering where possible
� Scalability, openness and flexibility of smart metering to dovetail into future technologies (e.g. smart grid)
� Bad debt recovery management from time of cut-over (this can even help defray the cost of smart metering roll-out)
� Regulatory demands (e.g. the ability to automatically load free units to consumers who qualify under the Power Consumer Assistance Fund or automatically apply loss adjustment factors)
� The Aggregate Technical, Commercial and Collection loss reduction model for privatization adopted by NCP.
� A stepping stone to Smart Grid
Drivers for Smart Metering in Nigeria Drivers for Smart Metering in Nigeria (Cont’d)
Factors Bringing Resistances to Factors Bringing Resistances to Cutting Edge SolutionsCutting Edge Solutions
� Fear of technology� Loss of jobs� “Too sophisticated for us”: gradual ascent vs leap-frogging� Fast-paced obsolescence
� High capital outlay� The diversification argument is contradictory
� Combine electronic credit meter, prepayment meter, Advanced Metering Infrastructure, etc.
� Privacy issue� Cyber-security
Components of Successful Components of Successful Implementation StrategiesImplementation Strategies
� Need for Policy Framework� Need for Regulatory Framework (minimum
standards, minimum functionalities required, registration of Meter Service Providers etc)
� Need for cost benefit analysis (FMP/NERC)� Strategy: phased implementation over years� Training� Customer awareness
� The Contextual Environment
(economic, political, and
administrative viability)
�Objectives and Goals
�Action Plan (Short term, Medium
term, Long term)
� Instruments e.g. technological
prescription, subsidy,
legislation etc
�Deliverables
� Policy Outcomes e.g. consumer
choice, security of electricity supply
etc
� Structural Outcomes e.g.
attraction of private investment,
competition etc
� The Contextual Environment
(economic, political, and
administrative viability)
�Objectives and Goals
�Action Plan (Short term, Medium
term, Long term)
� Instruments e.g. technological
prescription, subsidy,
legislation etc
�Deliverables
� Policy Outcomes e.g. consumer
choice, security of electricity supply
etc
� Structural Outcomes e.g.
attraction of private investment,
competition etc
Components of Successful Components of Successful Implementation StrategiesImplementation Strategies
�Market Rules (detailing
settlements and costs)
�Metering Code
(highlighting Minimum
Standards and
Communication etc)
�The Metering Market
Procedure (detailing
payment system in the bulk
electricity market)
�Others including:
� - Grid and Distribution
Codes
�Market Rules (detailing
settlements and costs)
�Metering Code
(highlighting Minimum
Standards and
Communication etc)
�The Metering Market
Procedure (detailing
payment system in the bulk
electricity market)
�Others including:
� - Grid and Distribution
Codes
� Need for Policy Framework� Need for Regulatory Framework (minimum
standards, minimum functionalities required, registration of Meter Service Providers etc)
� Need for cost benefit analysis (FMP/NERC)� Strategy: phased implementation over years� Training� Customer awareness
Components of Successful Components of Successful Implementation StrategiesImplementation Strategies
�The Ministry needs to
check policy effect on the
citizenry and cost effect
on the government (if
applicable)
�NERC needs to see
effect on the operators
while considering overall
effect on the final rate
payers
�The Ministry needs to
check policy effect on the
citizenry and cost effect
on the government (if
applicable)
�NERC needs to see
effect on the operators
while considering overall
effect on the final rate
payers
� Need for Policy Framework� Need for Regulatory Framework (minimum
standards, minimum functionalities required, registration of Meter Service Providers etc)
� Need for cost benefit analysis (FMP/NERC)� Strategy: phased implementation over years� Training� Customer awareness
Components of Successful Components of Successful Implementation StrategiesImplementation Strategies
Strategy: Phased implementation
through Project Monitoring
Office domiciled at NERC.
1. Grid Meters
Ensuring all boundary points on
the Grid have advanced metering
and have redundant check meters
as required by the Metering Code.
2. Industrial/Commercial/Institutio
nal Meters
Change all substandard MD
meters to smart meters
Ensure that all MD customers
come under smart metering as in
the PHCN Eko Industry
Competence Center (ICC)
initiative.
3. Residential Customers
Also in Phases (four) with definite
timeframe
Strategy: Phased implementation
through Project Monitoring
Office domiciled at NERC.
1. Grid Meters
Ensuring all boundary points on
the Grid have advanced metering
and have redundant check meters
as required by the Metering Code.
2. Industrial/Commercial/Institutio
nal Meters
Change all substandard MD
meters to smart meters
Ensure that all MD customers
come under smart metering as in
the PHCN Eko Industry
Competence Center (ICC)
initiative.
3. Residential Customers
Also in Phases (four) with definite
timeframe
� Need for Policy Framework� Need for Regulatory Framework (minimum
standards, minimum functionalities required, registration of Meter Service Providers etc)
� Need for cost benefit analysis (FMP/NERC)� Strategy: phased implementation over years� Training� Customer awareness
� Training is critical to the successful
privatization of the Nigerian Electricity Supply
Industry (NESI) and is given due importance in
the MYTO II.
� Customer Awareness through Consumer
Assemblies held regularly throughout the whole
Country; meeting consumers and getting their
buy-in on electric power issues, particularly
tariff, metering and connection issues
� Training is critical to the successful
privatization of the Nigerian Electricity Supply
Industry (NESI) and is given due importance in
the MYTO II.
� Customer Awareness through Consumer
Assemblies held regularly throughout the whole
Country; meeting consumers and getting their
buy-in on electric power issues, particularly
tariff, metering and connection issues
Components of Successful Components of Successful Implementation StrategiesImplementation Strategies
� Need for Policy Framework� Need for Regulatory Framework (minimum
standards, minimum functionalities required, registration of Meter Service Providers etc)
� Need for cost benefit analysis (FMP/NERC)� Strategy: phased implementation over years� Training� Customer awareness
� The Commission has successfully passed regulations with implications on metering in the areas of:� Independent Electricity Distribution Network (IEDN)� Embedded Generation� Independent Electricity Transmission Network (IETN)
� The Commission instituted a panel of inquiry called “Metering Inquiry Committee” which was mandated to hold wide ranging public consultations on metering issues nationwide. It has held public hearings in all the six (6) geopolitical zones of Nigeria and is about to submit its findings.
Progress so farProgress so far ……
� NERC commissioned an international Consultant on issues of Aggregate Technical, Commercial and Collection (ATC&C) Losses, which is the new system of Loss estimation and handling. This also led to redesign of the RfPs for the privatization of the state-held Utility Companies (Gencos and Discos)
� The ATC&C project is now fully on course with a partnership between NERC and National Space Research and Development Agency (NARSDA), which is Nigeria’s satellite agency, for more sophisticated and advanced satellite mapping, monitoring and calculation strategies.
Progress so farProgress so far …… (Cont’d)
� The Commission is presently reviewing the electricity tariff rate, as mandated by the EPSR Act 2005. The Commission has developed a tariff methodology as empowered by Section 76 of the Act called Multi-Year Tariff Order (MYTO) .
� The MYTO, a 5year tariff methodology order, is presently in its second run (MYTO II).
� The Consumer is, once more, the thrust of the order where, for simplicity, lesser consumer classification was considered, and distribution areas are categorized to have different, realistic tariff rates.
Progress so farProgress so far …… (Cont’d)
� The Commission is presently working on Feed-in-Tariffs for both Bulk Renewable Electricity Generation and Distributed (Embedded) Generation.
� Nigeria, at present, generates far less than its demand and as such rationing and allocation methodology has to be devised.
� To discourage losses, load allocation to Discos is based on achievements in meter deployment.
Progress so farProgress so far …… (Cont’d)
� The Nigerian Electricity Supply Industry is undergoing massive changes through the reform and privatization program.
� Ownership, operation, consumer relations, technological and investment decisions are all reconsidered in the whole value chain of the industry.
� These efforts are already having positive results with more energy produced by the generators, higher revenue streams, more industry incident and performance reportage, more consumer connections, important foreign and local investments in all electricity sub-sectors.
� The Nigerian Consumer is expected to continually gain more from the current reforms of the electricity sector.
� A critical success factor is effective metering.
ConclusionConclusion
THANK YOUNigerian Electricity Regulatory Commission (NERC)Nigerian Electricity Regulatory Commission (NERC)Plot 1099, 1st Avenue, off Shehu Shagari Way, CBD,
PMB 136, Garki Abuja, Nigeria
w: www.nercng.org; e: info@nercng.org
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