Govt adamant on costly smart-metering deal

via Govt adamant on costly smart-metering deal – The Zimbabwe Independent January 16, 2015

THE Ministry of Energy and Power Development is forging ahead with the controversial US$450 million deal for Zesa to install the costly smart-metering system which will force consumers to fork out at least US$400 per household for the electronic devices, the Zimbabwe Independent has learnt.

This is despite advice from Zesa engineers and audit firm Deloitte & Touche to axed former energy minister Dzikamai Mavhaire and his fired deputy, Munacho Mutezo, that the country was not ready for smart meters as the system has technical risks in addition to expense.

They recommended that Zesa — saddled with a US$400 million debt — continues with standard pre-paid metering for now, warning that it is too risky to introduce the smart-metering system. The engineers said the system would require special infrastructural upgrades for it to work.

Sources at the ministry told this paper this week that new Energy minister Samuel Undenge wants another pilot project carried out first to test the cost-effectiveness and efficacy ahead of tendering, whose deadline has been extended to February 24.

The first pilot project was carried out between 2009 and 2011 with several firms including SPASA, Connect The World and ZTE, all through unsolicited bids, during which close to 10 000 meters were installed.

The project proved there were technical problems with smart-metering.

In 2010, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) engaged Deloitte & Touche to carry out a study to evaluate the proposal to go smart, which cost Zesa US$2 million.

At the time Deloitte & Touche did the assessment on the project cost, smart-metering was estimated at US$450 million compared to the pre-paid option whose cost was US$75 million to install the same number of meters.

Just two weeks before he was fired by President Robert Mugabe, Mavhaire said his ministry would go ahead with the project because smart-metering was “part of the advanced technology” which countries the world over are adopting. He rejected arguments that the exercise would be costly, but refused to say how much or which companies would implement it.

Speaking on condition of anonymity, a senior ministry official said: “He (Undenge) wants a pilot project conducted first to test for effectiveness (of smart meters) before implementation.”

A Zesa official said they would meet Undenge this week, during which they expect to be informed on the direction the minister wishes to take.

“As we speak, we have not been informed yet whether we are going ahead with the smart-metering system, or we are first going to do a pilot project,” he said. “We are meeting with the minister this week.”

By the time of going to press, Undenge had not responded to questions sent to him after saying he was busy in meetings.

Experts in the energy sector have raised red flags over the smart meter proposal, citing the expense as well as the fact that the new technology is generally unproven.

“The unit will cost the ordinary consumer at least US$400,” said one expert, who also noted that “apart from cost, the new technology is untried. There is an outcry over the issue even in more economically developed countries like the UK”.

However, in his arguments Mavhaire insisted: “It (resistance) is the mentality of crooks that have been stealing electricity. The same critics spoke ill of the mandatory blending of petrol and ethanol saying it was expensive and destroying motor vehicles. However, the country has saved millions through the blending and no cars have been harmed by the product.”

The smart-metering system has mainly been rolled out in developed countries such as Canada, Italy, Japan, Netherlands, New Zealand, the Nordic countries, Spain, United Kingdom, United States and France.
In Africa, only Botswana has rolled out smart-metering while South Africa — more economically advanced than Zimbabwe — has only installed the meters in low-density areas and businesses that are major consumers of electricity.