ZESCO Limited has announced the rolling out of smart meters that will enable the power utility to regulate the usage of electricity by switching off certain appliances in customers’ households that exceed a given consumption threshold. Managing Director Victor Mundende announced last week that the project would be done at a cost of US$40 million.
Why will Zesco spend millions of dollars on limiting its customers’ power consumption when it survives on selling the commodity? What is the cost benefit for this investment? Who will pay when the power regulating process results in damage of customers’ appliances? Has load-shedding become Zesco’s core business now? Are Zesco managers trying to steal from this smart metre supply tender?
In this verbatim, News Diggers gets up close with Zesco Senior Manager for Corporate Affairs Dr John Kunda, who responds to customer concerns and goes into detail to answer the above questions:
Mwenda: Can you explain how this smart metering will work?
Dr Kunda: So this conversation on the smart metering was being discussed in the context of a graduated load shedding schedule moving forward. As we are moving towards a time were you have an energy mix, you need a balance to be automated so that the switching on and off and managing of the balance in the grid is smart. You know, even now some of the things like loading your units, currently you have to manually punch them in, we would like to move to a situation like your smart phone were you buy tokens through the bank and immediately it’s loaded as you punch in your meter number. There are things like, how do you control for non revenue-electricity within the system or the losses. Some of them are due to human error just like we know in operations and everything else. It’s the same with the water sector were we are moving from post paid to prepaid meters in order to reduce on losses. So the smart metering system goes with the smart grid. We don’t need to send drivers to Mkushi to go and physically switch off a feeder, you are spending fuel, and you have human labour and all that.
Mwenda: Doctor, I would like you to speak to me as a lay person, that’s the first thing, because if you speak more from a technical side you will leave me again uneducated and I would like to learn from your explanation. Please address me and my colleagues in Chazanga and everywhere else who don’t understand. What will the smart meter do in a household?
Dr Kunda: Apologies Mr Mwenda. Okay, so the smart meter will do a number of things. Knowing you as a customer, you want to know what you are consuming and you want to know what is draining most of the energy mu nyumba (in the house) right? The smart metre will give you that. It will give you, indications on which of your appliances for example are drawing energy at a particular time and it will always be giving you a signal. This is common practice, it’s being implemented for in Africa. Then the other thing is for example, for now if you have a fault in your house you have to call me or you have to call the call centre, with the smart metering, the smart grid system, the network becomes visible from a central point and we will be able know immediately something trips in your property. It will be picked up by the system and then we can respond to it. If there is an electrical hazard, something has fallen or the power lines, for now we have to depend on people to report because the system is not visible centrally and we can’t see it but now with the smart grid system you are able to tell and respond.
Mwenda: So from the consumption side, when this metre identifies which appliance is consuming more than the recommended threshold, what will it do?
Dr Kunda: So for example, if you as a person now you have your stove fully switched on, let’s say three plates all of them are running and we are running these campaigns and sometimes you are using the bigger plates instead of using the smaller plates and all that. You will know and it will become predictable for you were you are consuming most of your energy. If your geyser is on for the whole day or for most of the hours, you will be seeing from your smart gadget. So it also gives you power to control and manage what you are using. Now..
Mwenda: Sorry to cut you short, but that’s where the issue is. My next question was going to be, if it shows me what is consuming more power, why won’t Zesco allow me to decide which particular appliance to switch off? Why do you, as Zesco, want to override my choice and switch off my cooker or my geyser?
Dr Kunda: It won’t switch off your appliance. The only time they talked about managing the load is in a crisis. When there is a crisis in an area, what happens now is that you switch off everyone.
Mwenda: Are you saying it won’t select the appliances to switch off but it will simply switch off the entire residential area.
Dr Kunda: No, we are not switching off, so what is happening is that in a particular grid area we are not going to switch you off like the practice now, if there is too much drain, because there is a crisis we switch off everybody. But what you can do is that because you can graduate the allocation, the allocations are graduated and you say, “anything that will exceed beyond this”, in your home, at some point you may not be able to switch on the geyser and the stove at the same time because you may exceed [the threshold]. At a time of load crisis where the system has become unstable, the geyser won’t go on but the stove will go on for example.
Mwenda: And if it was already on before you switched off, it means the geyser will go off because it has exceeded a certain consumption threshold, isn’t that what you are saying?
Dr Kunda: No, you just won’t be able to switch on because it will be warning you. It will give you the beeps, “ti ti ti ti”, like what’s happening now for example if you are running out of units. So you are able to make adjustments.
Mwenda: Doctor, I need you to clarify this particular point because you see, when your MD was making the statement, he categorically said “from the comfort of our offices to the comfort of your homes, we will be able to identify which appliances to turn off…” and so that is where I think a lot of anger from customers is coming. Personally as a Zesco customer I am disturbed to hear that if I have more appliances switched on in my household, and Zesco has now identified there is a crisis situation in my grid, they will simply switch off my appliances that are on and consuming more power. That’s what your MD said, is that correct or not?
Dr Kunda: It is correct, and what we are saying is, you know switching off is also not… for example we are not saying in this home what is there, there is a fridge, and there is a geyser, let me switch off the geyser first, no. It’s in terms of power usage, what is it that is maybe consuming more power because the other alternative is simply switching off everything so that you don’t have any power at all. That is the alternative right? The other alternative, from an engineering perspective, and I hope I am speaking from that level, is now to simply reduce the power that is available. So all your lighting are on, in your home you can switch on certain appliances and then certain appliances that consume so much, beyond the threshold are off. Again it is only in a crisis and it’s a smaller component of that crisis. And I hear you were you are saying it’s like you are intruding into my space and wanting to dictate what I can do with the power that I have paid for in my home, that’s what I am hearing.
Mwenda: That’s exactly the point.
Dr Kunda: And what we are saying is that instead of them having a total black out in your area, Mr Mwenda, we are saying, let’s just reduce. Once the crisis is out, and stable, everyone goes back to normal. Then the next point I wanted just to say is that this is being projected for a period of five years, right? It’s a projection. So US$40 million is not like money sitting in account here or waiting to…
Mwenda: Sorry to cut you short again. We are going to discuss the funding issue later and of course we could like an explanation on that. But before we proceed, let me give you a scenario. Let’s say, after a crisis, my cooker which you as Zesco switched off using your smart metre can’t turn on any more, who takes responsibility for that damage? How do you deal with clients who will come to you and say “you have burnt my cooker” or “you have damaged my geyser” how are you going to deal with that?
Dr Kunda: Okay, where there has been a complaint lodged in about Zesco having burnt assets in people’s homes, we have taken up investigations to ascertain how it could have happened and in some cases some independent verification is done. So we receive those cases and there is a facility for that. Again, that’s the beauty of this smart metering system because it will have a record of what you were receiving even when we took you off and probably then we will be able to ascertain what transpired, purely engineering.
Mwenda: Have you had cases were Zesco has been found wanting and they have compensated the customer?
Dr Kunda: I know that there have been cases for compensations and I know that there are some that have been dismissed, I don’t know how many have been honoured but I can get you that detail.
Mwenda: Just one more question from the consumption side, from the clients point of view. What role is ERB going to play in this because I would like to believe there must be some regulatory authority’s role at some point. Will this be within your legal framework, because people are threatening to sue you? I would like to know what right the service provider has to, you know, for lack of a better term, intrude in my place and be able to control the gadgets in my household. I would like to understand how ERB has allowed you to do this and the Consumer Protection Commission as well.
Dr Kunda: To be honest with you, I would be incompetent to speak on the regulators interventions or role but of course whatever we implement as Zesco is within the legal framework. We respect individuals’ privacy in providing this service. Nothing will be implemented that jeopardises that. But your concerns are valid and I would like bene Hang’andu at ERB to give you answers from the regulators perspective. There is also consumer protection, and there is Zambia Weights that will be talking about those issues.
Mwenda: Now educate me a little bit about profitability. One of the concerns, you were just explaining before I cut you much earlier that the US$40 million is not sitting in an account. The general understanding has been that you are going to buy these meters and the process of purchasing and installing is going to cost that much. Now, we are saying why is Zesco, one, going to spend all that money in reducing consumption instead of increasing generation capacity and where will the money come from?
Dr Kunda: The reason actually why we have to invest into a smart system is because the investments in generation for now, I think have been enormous and we are projecting to have excess, all things being equal. We are projecting to have excess of power. So just to give you an example ba Mwenda, on the Kariba side, the installed capacity is about 1,080 MW of power, then if you are looking at Kafue upper, it’s 990 MW of power. Looking at Kafue Gorge Lower, it’s 750 MW of power. Itezhi tezhi is giving you about 120 MW of power, Victoria Falls is giving us 110 MW. Then there has been these investments in Lusiwasi, Chitambo and then the solar systems that have been put in place, right? We have like 600 MW another over 700 MW of solar. The weakness with solar is at night, battery storage is not good because it’s not as stable as thermal or nuclear and all that but in terms of what we have invested in, in the last eight, nine years, the projection is to have excess power for local demand.
Mwenda: And when Zesco does its math, it finds that with this particular investment of US$40 million, what you will save will be practically equal to what you will have invested?
Dr Kunda: No, but overtime I think the investment, especially in energy losses and managing the grid and with these down time and all that I think in terms of the cost, a cost benefit analysis was done, I just don’t have the numbers, I can talk to the finance guys to give us what actually the numbers were even in the feasibility stage of the investment that was going in. But you are looking at, you know the cost saving opportunity to Zesco particularly in the farming blocks were distances are significant there are issues of transporting staff, there is maintenance of vehicles, there is fuel and other operational costs in these areas. So the increase in the digital footprint will reduce significantly on that element.
Mwenda: And you said that it’s not like this US$40 million is sitting somewhere in an account?
Dr Kunda: No, it’s not.
Mwenda: We are given to understand that you are actually going to get a loan.
Dr Kunda: (Laughs)
Mwenda: And we are now worried that these guys want to steal from this.
Dr Kunda: Ati tifuna tiidye (so that we should squander it?)
Mwenda: Yes, Mufuna mudye apa manje ba Zesco (So that you eat from the tender now as Zesco) (laughs)
Dr Kunda: Ati banyamata bafuna ku nyopola aba (That these guys now want to chew the money). No Mr Mwenda, on a serious note you are looking at a five year projected time frame ai? And the costing if you want to break it down, with our current customer base which is likely to grow, it’s about US$40 per meter, right, and then that is like US$8 per year per customer. So we are looking at a projected investment and the replacement cost over time, what it would mean. Yes. So that’s how we have projected it as Zesco limited. And it’s not a loan
Mwenda: Oh, it’s not a loan?
Dr Kunda: No it’s not a loan!
Mwenda: So this partnership with the company in Ndola that you are partnering with, what does it entail then if they are not getting a loan? They will supply the meters but how will they get the money? Obviously it’s not for free!
Dr Kunda: I don’t know the legal detail in terms of how they split in financing will be but what I can assure you is that this is not a relationship that is starting now. I know that Zesco, ati mutu ukakula siulewa nkonyo (a big head cannot avoid punches), we are a parastatal and anything, if people want to attack boma (government), sometimes it’s difficult to distinguish so they just hammer. Upitile uku mudala, upeza (you pass this side my brother, you find) collateral blow, (Laughs). So I hear you ba Mwenda. There was need for us as Zesco to provide a clear explanation.
Mwenda: So now, Zesco at this moment is trying to reduce the consumption, and you are advising customers to switch to solar and gas, how will you manage to get back these customers when you reach your projected surplus generation?
Dr Kunda: Yes, we are even encouraging you to use gas because it’s cheap.
Mwenda: You are short of encouraging us to use malasha (charcoal) (laughs)
Dr Kunda: No, malasha is environmental degradation so I am not going to encourage you (laughs).
Mwenda: So now, when you have that excess generation capacity, what are you going to do to get me back on the grid because you will have too much power and you will have less people using it.
Dr Kunda: Thank you, beautiful question and I am glad you’ve asked it. First, ba Mwenda, load shedding is not our core business.
Mwenda: Well, it looks as if it is at this stage, so that’s why we are saying you are darkening the nation, not powering the nation.
Dr Kunda: Iwe mudala iwe (but you my brother), ati loadsheding looks like your core business (laughs). We find ourselves in a situation were we are paying more for lack of foresight. Especially in yesteryears, especially when people should have invested, in the 90s we had opportunities to invest, we never did that that’s why we are where we are. Load shedding is giving us losses as a company. Now, the energy saving drives, we are encouraging people to use gas and saying use your alternative energies, it’s because we know ba Mwenda, power is not cheap, yet we don’t have a lot of investment in the sector because the return is not good. If mudala electricity was like gold or diamond, we would have had excess already but because the return on investment is not good, that’s why it is difficult to attract investment in the sector. Ma Chinese mudala and other European guys would have invested heavily in generation but they know the return is not very good. What we are saying, to answer your question, what are you going to do with excess when you have excess power. You know what we have done, we are positioning ourselves to be the hub in the region, to take advantage of our comparative positioning to become the hub for the region. So for example, we signed an MOU with Angola, to create an interconnector because they are far behind and they will need power we have signed another interconnector with Tanzania. We would like to go as far as East Africa. We are looking at Zimbabwe, we are looking at Botswana because most of the power they are saying there is thermal driven and it’s quite expensive.
Mwenda: Dr Kunda you’ve done well to provide this explanation to the people, and I think that this is the conversation that you should be having with us in the media because there are serious concerns out here.
Dr Kunda: I know. Our crime, actually, has been lack of clarity.
Mwenda: Thank you very much Dr.
Dr Kunda: Thank you so much, have a good day, bye.