Smart Metering Solution in Pakistan

Business Proposal

Arslan Aftab

Submitted By:

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ContentsExecutive Summary.....................................................................................................................................2

The Problem:...............................................................................................................................................3

Recommendation:.......................................................................................................................................3

The Solution:...............................................................................................................................................4

Functions:................................................................................................................................................4

Feasibility:...................................................................................................................................................5

The Benefits:................................................................................................................................................6

Current projects:.........................................................................................................................................9

Events:.......................................................................................................................................................10

The Need of Smart Metering in Pakistan:..................................................................................................11

Our Products:............................................................................................................................................12

Conclusion:................................................................................................................................................13

References.................................................................................................................................................14

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Executive SummaryPakistan is swamped with energy crises. The continuous load shedding has troubled the economy

so much that there is no growth and unemployment rate is increasing day by day. The managing

director of PEPCO, Tahir Basharat Cheema, is convinced that the major cause of outage of

electricity is due to the local pilfering from the system; and if this is tackled properly, PEPCO

could save billions of dollars; and thus could work on the development project with more

resources.

Hence there is a need to actively seek ways to encourage efficient use of available energy and

develop a more secure supply side of energy without any energy theft.

One potential solution to tackle the above mentioned problem is to introduce smart metering

around the country which will provide detailed information about the consumption of the energy

to both consumers and the utility. This, in turn, will encourage in the demand side the consumers

to actively supervise their energy consumption behavior and modify it in order to meet the

monthly bill targets; and in the supply side, it can help the utility to become more reliable and

secure by providing customized per unit prices and quickly detecting any kind of energy theft

that is taking place in the region.

The aforementioned features of smart meters make it easier for us to see why they are gaining

wide acceptance around the world.  Consumers are reaping monetary benefits and the knowledge

that they are doing their part to reduce the size of their carbon footprint.  Utility providers are

now better able to forecast consumers’ demand, and are reducing their internal costs by

pinpointing power outages.  Clearly, the benefits are huge for the energy consumer and the

provider.

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The Problem:Pakistan is swamped with energy crises and it hasn’t been able to meet the energy

requirement of the general public for many years.

Pakistan is a developing country and it has failed to fulfill the energy requirement of the

economy. This is the major reason why economy of Pakistan is exacerbating everyday instead of

having prosperity and growth like other developing countries around the world. Through an

estimate, Pakistan has a power shortage of 5300 MW in 2010 and this shortage has been

increasing due to high growth in demand and a rather slow or no development work on the

supply side. Energy crises has put the whole country in a test and each and every person in the

country is tired of the continuous load shedding which sometimes exceeds 16 hours per day. The

major problem in the management of energy in the supply side is that energy usage shows a high

degree of variability –it is at peak during summer due to use of air-conditioners and fans and it is

low in winter.

The second problem and which essentially is the major reason of slow development of energy

sector of Pakistan is electricity theft. Reportedly, Pakistan is losing Rs.80 billion annually on

account of electricity theft.

Recommendation:Pakistan needs to actively engage in looking for means to encourage a more rational use of

energy.

For the better management of the energy in both demand side and supply side there is a need of

an infrastructure which provides detailed information regarding the usage of electricity to both

consumers and suppliers. This will allow the users to actively supervise the energy consumption

and adjust their behavior to their target/ pre-determined consumption of energy. Further it will

allow the supply side to better predict the demand of electricity and thus provide a more reliable

supply side. Moreover, it will allow the utility to set the prices according to peaks and lows in the

demand side.

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The Solution:Smart Metering: It generally involves the installation of a “smart” device at a residential/

industrial customer and the regular reading, processing and feed-back of consumption

data to those customers.

The “smart” device mentioned above is actually a smart meter which is made of a modern,

innovative electronic device capable of offering consumers, suppliers, distribution network,

operators, generators and regulators a wide-range of useful information, enabling the

introduction of new energy services.

Smart Metering is often referred to as automated meter reading (AMR) or in the case of real-time

two-way communications as advanced metering infrastructure (AMI)

When we say smart meter we usually mean electricity meter, but smart meter can also be used

for multi-purposes such as for the measurement of gas or water consumption.

The smart meters have three basic functions: (1) measure the consumption of electricity; (2)

remotely switch the customer off; and (3) remotely control the maximum consumption of

electricity. An important characteristic of the meter is the possibilities through which it can

communicate. The communication infrastructure comprises PLC (existing electricity grid), a

wireless modem (GSM or GPRS) or an existing permanent internet connection (ADSL).

Functions:The detailed functionalities of a smart meter are given below:

─ real-time or near-time registration of electricity use

─ offering the possibility to read the meter both locally and remotely (on demand);

─ remote limitation of the throughput through the meter (in the extreme case cutting of the

electricity to the customer)

─ ability to read other, on-premise or nearby commodity meters (e.g., gas, water)

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Feasibility:Technologically, there are no obstacles for the introduction/ rollout of the smart meters.

The Italian case – the rollout of more than 30 million smart meters for the residential customers –

and the demonstration of the numerous projects of smart meters by different countries around the

world show us that this technology can be used on a large scale and it is cent percent a down-to-

earth idea. In fact, many experts believe that as typewriter and dial-phone are replaced by digital

advanced equipment; similarly, the smart meters are an advanced form and a logical successor of

the mechanical electricity meter.

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The Benefits:Smart Metering has numerous benefits and that is the reason of its wide acceptance around the

world by major developed countries all across the globe. Some of the major and most prevalent

benefits are discussed below.

1) It will allow the consumers to manage their electricity consumption more efficiently

if given the time-based rates:

We see that the electricity consumption differ with a high degree in different season. In

the summer season the consumption increases due to an intensive use of Air-conditioners

and other equipment. The utility charges different prices to customers in peak periods and

off-peak periods. Obviously, the utility will charge high price when the demand is high

(Peak Period) and will charge less price per unit when demand is low (off-peak period).

The consumer could actually make an efficient use of the electricity by adjusting his/ her

behavior in such a way that they consume less electricity in the peak periods and

necessary amount in the off-peak period; thus saving a lot of energy bill.

2) It will increase the privacy of the consumers and reduce the operational cost of

utility by eliminating the on-site visits by the utility to check the meter readings:

One of the functions of the smart meter is: both the consumers can be informed about the

readings of the meter even in the remote areas. Hence the utility can charge the bill

according to the reading of the meter without having made on-site visits. This will result

in privacy to the consumers and also a high reduction in the operational cost of the utility

which will ultimately benefit the consumers with low energy charges per unit.

3) Smart meters cannot be tampered and provides an accurate and actual

consumption overview of their region; hence could easily detect any kind of fraud or

theft.

One of the main problems around the world, especially in the developing countries is the

power stealing and energy theft. The mechanical meters can be tampered. People pay

some money to the local electrician to reverse the readings or slow the pace of the

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electricity meters. In Pakistan it is reported that the energy sector incurs a loss of 80

billion per year due to energy theft; 400 consumers of Karachi alone get away without

paying bills of their electricity consumption. The smart meters with their latest and

advanced technology cannot be tampered and in turn will save billions of dollars to the

energy sector of Pakistan.

Moreover, by using smart meters the utility will be able to get detailed information about

their region, which means they can examine any suspicious areas where energy usage is

higher than expected, and thus smart metering will provide the utility with a tool to detect

fraud.

4) It will reduce per-capita carbon footprint that energy customers around the world

are striving towards.

The smart meters give detailed information about the consumption of electricity which

also includes the measurement of carbon emission due to the usage of electricity. This

means the people who are environmental friendly could actually make an informed

decision about their carbon footprints and control it by limiting their electricity

consumption. This is eventually a positive measure against global warming.

5) It will allow the Utility provider to better forecast the demand with the real-time

detailed information and thus set the prices accordingly:

The utility such as PEPCO with smart meter will be given detailed information about the

usage of electricity of each and every region separately. This will allow the utility to

charge customized rate to each region separately and also charge peak and off-peak

period rates distinctively.

6) Smart meters enable the utility provider to cut-off the energy supply of the

defaulters without having the utility make the site-visit manually.

In the extreme case, when the service provider has to cut-off the power supply of the

defaulter the utility could do so without having made a site-visit; thus the utility can spare

itself from all the fuss that the defaulters would make during the power supply cut-off.

7) It will allow rapid outage detection and restoration of service:

Currently with the mechanical energy meters, the detection of an outage and restoration

of power are guessing games in which the supplier largely rely on the consumer calls to

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give them an idea of how large a power outage might be and where the power outage is

occurring.

8) It will allow the consumers to make informed decisions when provided with detailed

and accurate real-time information about their consumption behavior.

The smart meters also have the capability of storing the historical records of the

consumption of the power consumption. Hence, the consumers will be able to make an

informed decision of their electricity consumption and will likely to learn how to use

baking-oven, dishwashers and washing machines during off-peak periods and also will

likely to turn off lights more readily; thus saving themselves a lot of money.

Further it can enable the service provider to notify the consumers through a text message

when the bill exceeds their targeted amount, thus encouraging the consumer to act more

efficiently toward their consumption of electricity.

9) It will reduce the need of more and more energy plants to meet the growing energy

consumption demand as it will lower the consumption demand of electricity.

Building power plant to meet the demand of occasional peak period is very expensive and

costly. Increased demand side management by enabling the consumers to modify their

consumption behavior could slow down the growth in the energy demand. Also the

advanced metering will allow the consumers to “round off the peaks” thereby reducing

generation costs and making more efficient use of existing generation capacity.

10) Additional benefits:

o Labor reduction: It refers to the additional cost reduction in the call center

labor, billing and collection and disconnection of defaulters.

o Process improvement: It refers to the reduced energy theft, increased billing

accuracy and tighter billing collection.

o Infrastructure improvement: It refers to the benefits of a more accurate, digital

meter and the fact that installing new meters in a whole new area will reduce the

future meter replacement budget.

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Current projects:Many countries around the world are actively engaged in introducing smart metering to promote

efficient use of energy and encourage demand responsiveness among consumers.

Canada: The Ontario Energy Board in Ontario, Canada set a target of installation of 4.3

million smart meters with minimal technical standards covering all the customers of

Ontario.

United Kingdom: In December 2009, The United Kingdom Department of Energy and

Climate Change announced their intention of installing smart meters all around UK by

year 2020.

United States: On July 20, 2006, The Northern California Territory of Pacific Gas and

Electric (PG&E), approved a program to install 9 million smart meters for the

measurement of consumption of gas and electricity. The major reason for this approval is

that California has a summer peak of power demand during 50 to 100 hours per year due

to the use of air-conditioning. The regulatory agency is making efforts to decrease this

peak by making consumers efficiently respond to peak and off-peak prices.

Italy: The world largest smart meters deployment took place in Italy by Enel – the largest

power company in Italy- with more than 27 million customer base. It has achieved the

target of deploying smart meters to its entire customer base between 2001 and 2005.

Australia: In 2006, the Essential Service Commission (ESC) of Victoria, Australia

started installing smart meters all around Victoria. In 2013 about one million smart

meters should be installed.

Netherland: In Netherland, starting from 2008, all residential customers will be provided

a smart energy meter. The proposed time frame for the whole project is 6 years. In the

meantime, some pilot projects are also being developed.

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Other than the countries mentioned above, many developed countries like Sweden, New

Zealand, France, Ireland and Japan are actively engaged in smart metering projects. Not only

developed countries but also we have examples of developing countries like Azerbaijan

which is actively engaged in the deployment of AMI to enable smart metering. These meters

will have the ability to accept bank cards to credit the meter for billing purposes.

Events:The whole world is

celebrating the

invention of the

intelligent and

smart device of

Smart Meter.

Different events in

different parts of

the world are

taking place to

create awareness

among the

consumers about

this novel

invention. The

schedules of some

of the events are given below.

14-15 March 2011Oslo, Norway

12-14 April 2011Copenhagen, Denmark

17 - 18 May 2011Warsaw, Poland

2-3 June 2011London, UK

4-6 October 2011Amsterdam, The Netherlands

4-6 October 2011Amsterdam, The Netherlands

16-17 November 2011Moscow, Russia

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The Need of Smart Metering in Pakistan:Pakistan has been troubled with energy crises for more than five years. It needs to actively

engage in solution which will enable its customers in management of their energy consumption

and also enable the development of energy sector by reducing the operational costs as much as

possible. Further, the energy sector of Pakistan is in no position to incur losses at this troubled

stage. But still we see that it is losing more than 80 billion rupees per year due to energy theft

and; more than 400 consumers in Karachi alone are consuming electricity without paying their

bills.

According to PEPCO’s Tahir Basharat Cheema most power outages occur in due to overloads

caused by local pilfering of the systems. He said that the first priority of the task force is to target

meter tampering and then make the utility company to operate more efficiently; and this target

could only be achieved by introducing smart metering in Pakistan.

The managing director, Rasul Mehsud, is convinced that the smart metering can save billions of

rupees and it can enable the power sector to curtail its expenses. According to official sources,

the smart metering solutions can reduce electricity theft from 10 per cent to 3 per cent per

annum, which can save more than 30 billion rupees per annum.

The CEO of LESCO, Saleem Akhtar, spoke about the success of the smart metering pilot project

which had been experimented in Shadbagh, Shadman, Dehli Gate areas of Lahore and he told

how LESCO has been able to save tens of millions of rupees just by the investment of 6.2

million rupees only. Reportedly, theft and losses fell sharply from 11 per cent to 2.9 per cent in

Shadbagh and Shadman and from 13.2 per cent to 4.4 per cent in Dehli gate, after installation of

smart metering.

The above analysis shows how badly the power sector of Pakistan needs the installation smart

meters for the efficient and theft-free usage of power across the country.

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Our Products:Micro-Tech Industries Limited is one of the pioneers in Pakistan to introduce smart meters in

Pakistan. Some of the models (with their core features), offered by Micro-tech, have been

discussed below:

A283GInnovative, hi-tech static single phase energy meter for remote meteringAMR provides the electric utility companies the opportunity to increase operational efficiency, improve customer services and reduce data collection costs.

A326GAn innovative & hi-tech static 3-Phase Whole Current energy meter for remote meteringServer based EMS (Energy Management Software) is used to collect data from remote energy meters for detailed anlysis and billing.

P4233 phase 4-wire smart card based prepaid solid-state energy meter has been specially designed for commercial users and households.Various consumption details are visible instantly.

I411It is a solid state 3 phase multi function multi tariff energy meter developed especially for environments where power stealing is a major concern.This model comes with comprehensive Anti-Stealing features, Monitoring, Load Profiling and Event Recording.

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Conclusion:The whole analysis regarding the current energy crises and the energy theft issues coupled with

the losses of more than billion dollars in the energy sector invoke us to think new, improved and

efficient ways to make the most of the available energy resources that we have in Pakistan; and

smart metering is one the most potential applicable solution that is available to Pakistan to cope

with this problem.

From the wide acceptance of this project around the world shows us that, with no doubt this

technology (smart meter, infrastructure, data processing) is mature and can be implemented on a

large scale to encourage an efficient use of s scarce resource such as energy.

Al though there are some challenges to be tackled. The major and foremost challenge is that the

success of this project is largely dependent on the consumer who chooses in the first place to

make an efficient use of energy and save their money. There is a need for the awareness of this

equipment and a know-how is also very important. Also, it is reasonable to say that smart

metering should be started in the industrial sector and urban areas first and after the success of

the project in those areas it should be deployed intensively in the rural areas of Pakistan.

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Referenceshttp://freebird.instablogs.com/entry/power-theft-and-power-crisis-in-pakistan/

http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/April/business_April110.xml&section=business&col=

http://www.energy-retail.org.uk/smartmeters.html

http://www.mei.gov.on.ca/en/energy/conservation/smartmeters/

www.idc-online.com/technical_references/pdfs/.../ Smart _ Metering

http://en.wikipedia.org/wiki/Smart_meter