Amit Zavery, the head of Google Cloud makes the point that we should “Think of digital transformation less as a technology project to be finished than as a state of perpetual agility, always ready to evolve for whatever customers want next.”
The electricity sector in Kenya has been grappling with a plethora of challenges which are often met with a chorus of public outcry. Three of the most prominent issues are reliability, the high costs and accessibility. Digitalisation presents workable solutions for some of these challenges through digital tools such as smart meters, smart grid systems, and blockchain technology.
Starting with the issue of reliable electricity supply, smart grids have proven to be instrumental in ensuring consistent power supply. Unlike an ordinary grid system which merely supplies electricity from the power utility (KPLC) to the consumers, a smart grid system goes further by enabling two-way dialogue where data is exchanged between the utility and its consumers through smart meters. This continuous communication enables the distributor to monitor, predict and swiftly respond to the fluctuating power needs of the customer by re-directing power to meet rising demand in time to avoid gaps in supply.
Additionally, an effective smart grid system can incorporate tools such as sensors to increase its reliability. In the event of a power failure, these sensors can quickly and accurately locate the fault, making it possible for power to be re-routed through alternative lines thereby reducing the scale of the impact, such that a power failure in a section of Nairobi, for example, need not affect the entire city. The sensors also provide information that enables the utility’s engineers to speedily identify and resolve faults, thereby reducing the duration of outages and the attendant lost revenue for businesses.
Turning then to the challenge of high electricity bills, smart meters help to address inaccuracies in billing by recording energy usage on an hourly basis and transmitting this information directly to the utility. This contrasts with traditional meters which require a physical reading for bill generation. Aggrieved consumers who are unable to reconcile their power usage with their electricity bills often complain about being over-charged thereby delaying availability of much needed funds to the utilities as parties seek to iron out the billings. Such cases also create opportunities for corruption wherein a utility officer may be incentivised to irregularly adjust the bills, which may result in losses for the utility.
Smart meters also carry the advantage of incorporating Time-of-Use pricing which provides for price adjustments depending on when a consumer uses electricity. Consumers can track periods of high energy usage and either lower or spread out their consumption of electricity accordingly. This grants autonomy to consumers to monitor and control their energy bills. This approach has the added benefit of reducing billing disputes which saves on the time, effort and cost that goes into probing complaints. Research also shows that making energy usage visible to consumers motivates them to reduce consumption which drives more efficient use and allocation of power. This can also be coupled with smart payment solutions which enable customers check their electricity bills remotely and more importantly, make it possible for them to pay their bills remotely without having to queue at the utility’s offices. All these enhance the customer’s experience while at the same time easing revenue collection for the utility.
Smart meters can also enable utilities to fix some issues remotely without having to deploy engineers to physically inspect the meters, thus lowering costs and reducing downtime for the customer.
When it comes to access to power, blockchain technology is proving useful as it allows for a decentralised and tamper-proof means for small energy producers to sell their excess energy to their neighbours within a micro-grid.
Recognising the effectiveness of these digital tools, how have they been deployed in Kenya so far to address the existing challenges? There are examples of projects such as a smart micro grid in Singiraine village, Kajiado county which was piloted by Hivos East Africa in conjunction with Bithub Africa. This particular smart grid uses blockchain technology to track all data on power purchases and distribution thus enabling peer-to-peer trading of electricity between homes that produce surplus solar power and those that have a deficit. This project demonstrates a smart grid system’s ability to improve the availability of energy in remote areas where energy poverty persists.
In terms of smart metering, in 2021, KPLC rolled out a smart metering project intended to benefit 55,000 customers in the Small and Medium Enterprise sector. The smart meters shall enhance communication with the National Control Centre during power outages to facilitate a prompt response to restore power. In parallel, there have been attempts by private sector players such as Safaricom to collaborate with KPLC to scale-up the installation of smart meters across Kenya by sharing the financial risk.
At a global level, many countries have made significant strides in incorporating digital tools in their electricity sectors. In mid-2021, Canada launched The Smart Renewables and Electrification Pathways Program which made millions of dollars available for grid modernization projects and renewable energy. One of the pre-conditions for such funding is that the projects must utilise modern technologies which will ultimately facilitate the transition to digital tools. India also has a Smart Meter National Program aimed at boosting digital transformation in the energy sector, noting that India’s demand for power could quadruple in the next decade.
Digitalisation of the electricity sector cannot be gainsaid as it is evidently desirable from a modernisation and efficiency perspective. However, a major hurdle to digitalisation is the cost to utilities of the advanced infrastructure and technology required. For a cash-strapped and debt-ridden utility, the digitalisation journey may be a long slow walk which is hardly ideal. The options available to address this stumbling block are to partner with private enterprise or to pass the costs on to the consumers, which as inflation bites, is likely to encounter resistance. The utility would also need to invest in recruiting specialised staff and undertaking capacity building for the existing workforce on the use of digital tools. The cost of internet connectivity to transmit the heavy data from customers is also likely to be significant, as are the analytics software and storage hardware for such data.
As digitalisation is data-intensive, it also poses a risk regarding data privacy for individual consumers as there could be attempts to monetize their data in an unlawful manner. Cyber security is also crucial since a smart grid system could be a target for attacks by hackers. Misappropriation, theft and vandalism of smart equipment could inflict substantial costs on the utility which insurance may not fully cover.
Overall, digitalisation is more of a journey than a destination and there is a lot to consider along the way, but it is well worth pursuing as the benefits may far outweigh the challenges.
The article was featured in the Business Daily and can be accessed here.