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Project Details

Reliability
Robyn Meeks
Pakistan
Kyrgyz Republic
Duke University
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Dr Robyn Meeks

Did smart metering help utilities retain revenue and customers access to electricity during COVID lockdowns in Pakistan and Kyrgyzstan?

The role of metering and infrastructure improvements in power system resilience during COVID-19

Power systems and COVID-19 in the developing world: understanding the role of metering and infrastructure improvements in power system resilience

 

Background, challenges, and context

When the quality of electricity delivered is poor – which is common in many developing countries – consumers may resist paying for services. Low bill payment and high theft mean electricity distribution companies have lower cost recovery and less to invest in infrastructure maintenance, modernisation, and technical upgrades – which, in turn, perpetuates poor-quality service. This cycle – an infrastructure quality trap – can be persistent.

Concerns around these issues have increased during the COVID-19 pandemic. Lockdowns and quarantines have restricted the movement of billions of people, affecting many utilities’ revenue collection models – and therefore the delivery of electricity services.

In many developing countries, meter readers need to travel – they visit consumers multiple times per month to read meters, record consumption, and deliver bills. Customers typically visit utility offices or other payment locations to pay their bills. During the pandemic, some utilities requested that customers pay their bills electronically, but this is infeasible for households without internet connections, computers, and smart phones.

Another challenge is that household electricity consumption might be higher than usual during lockdowns and when people are self-isolating – imposing an extra burden on the electricity distribution system, which might further affect losses and revenue collection. Furthermore, without utility workers regularly patrolling neighbourhoods, there might be less prevention and identification of illegal connections and electricity theft.

Prior to COVID-19, some utilities implemented efforts to increase cost recovery, including installing metering systems (electronic, pre-pay, or smart meters), which could mitigate the problems of low payment and theft, and infrastructure improvements such as aerial bundled cables (ABCs), which, through having an extra protective layer, are designed to prevent illegal connections. Other utilities have implemented institutional innovations in efforts to increase cost recovery as well.

These interventions were designed to mitigate problems in typical times. During the COVID-19 pandemic, they have potentially been more important, with greater benefits, but no evidence existed on their effectiveness.

 

Research overview and objectives

This research project was carried out in Kyrgyzstan and Pakistan. Prior to 2020, both countries suffered from high losses, low cost recovery, and sub-standard electricity service quality. They were also substantially impacted by COVID-19, in terms of cases and deaths as well as lockdowns that severely restricted movement – but the pandemic also posed a new threat to the resilience and functioning of their power systems.

In Kyrgyzstan, smart meter installations have featured heavily in electricity distribution companies’ strategies to reduce losses and increase cost recovery. An estimated 215,000 electricity consumers had smart meters installed as of February 2020 (representing approximately 15% of the country’s total electricity connections) and there were plans to install several hundred more.

Pakistan’s approach has included both institutional innovations and technical upgrades. Utility Karachi Electric (KE) has made institutional efforts to incentivise payment increases by feeder level. Technological upgrades have focused on the replacement of old infrastructure with ABCs.

The research team explored how the shock of the COVID-19 pandemic affected the efficacy and resilience of smart meters in reducing losses and/or increasing cost recovery in the power sectors of the Kyrgyz Republic.

Meanwhile, in Pakistan, the team analysed the effectiveness of KE’s institutional innovations and infrastructure upgrades in improving its bottom line. The timing allowed the team to study the effects of COVID-19 on the utility’s operations and determine whether its interventions allowed it to better weather the effects of the pandemic.

 

Research methodology

The research design, methodology, and data varied depending on the country. For the Pakistan study, data came from two different sources:

  1. Records from the Karachi power utility covering 2,163 feeder lines and providing a comprehensive and unique dataset including feeder level losses, revenue recovery, utility claims, consumer complaints, and which lines had ABCs installed. Datasets all started in 2018 and included at least two, and in some cases three, years of records.
  2. Household survey data from approximately 3,000 residential customers that included household expenditure (electricity and non-electricity related), perceptions about neighbours’ electricity theft and payment practices and respondents’ beliefs about the utility’s performance.

For the Kyrgyzstan study, data was captured through telephone interviews with 57 staff members of 43 electricity distribution company district offices. The data collected focused on understanding how the utilities are using the smart meters and whether the installation of smart meters across the country’s districts affected the utility’s operations and their resiliency to the shock of COVID-19.

 

Research results, key messages, and recommendations

Smart meters in the Kyrgyz Republic

  • Around one fifth of customers of the three Kyrgyz Republic utilities reviewed are connected to the grid via smart meters, which are used, among other things, to remotely disconnect and reconnect consumers.
  • The majority of utility staff interviewed believe that smart meters reduce customer complaints and helped to mitigate the negative impacts of COVID-19 lockdowns, notably on billing and bill payment.

 

Infrastructure improvements and institutional innovations in Karachi, Pakistan

  • ABC installation led to (on average) decreases in monthly losses of about 8% and increases in monthly revenue of 5%.
  • The upgrade to more pilfer-proof wiring led to an increase in total customer numbers (an indicator of formalising previously informal customers), billed units, and bill payments, and reduced the number of technical issues, as well as customer reported service complaints.
  • Customers in areas with ABC wiring reported fewer blackouts, though there was no evidence of changes in the quality of electricity provision (voltage fluctuations and appliance damage).
  • Institutional and infrastructural improvements have the potential to reduce losses and increase revenue recovery, but they require customer trust and buy-in to fully succeed.
  • In terms of the environmental effects, it is estimated that the reduction in CO2 emissions from ABC installations is between 0.10% and 1.19% of Pakistan’s total emissions within a year.

The research aimed to provide a better understanding of the relationship between COVID-19 and electricity distribution companies’ financial viability and provision of quality electricity services. It will inform decisions for future planning, operation, and maintenance of power supplies in developing economies.

 

Local partners

Kyrgyz State Technical University

Karachi Electric (KE), Pakistan

Lahore University of Management Sciences (LUMS), Pakistan