Investing in Smart Meter Systems in Kenya
In September 2021, Kenya’s largest telecommunications business, Safaricom, proposed a deal to Kenya Power to install “a $300 million smart meter system” at Kenya Power’s site. Furthermore, Safaricom will bear the cost of installing “330,000 consumer, transformer and feeder smart meters” in communities experiencing high power leakages or electricity theft. These leaks put an added economic burden on individuals and Kenya Power. Safaricom and Kenya Power’s partnership to install smart meter systems in Kenya will also lead to more job opportunities for Kenyans.
Power Leakages and Electricity Theft
Power leakages can occur when a current is not entirely insulated or the electrical equipment is not fully grounded, meaning there may be no safe way to discharge electricity in case of a malfunction. The energy needs somewhere to go and grounding sends electricity outside the building and into the ground through the insulated wiring. This lost energy costs Kenya Power revenue that often exceeds what the company earns. Safaricom anticipates that the new smart meter system will save Kenya Power more than $89 million of losses due to power leakages.
Kenya Power is the primary company in Kenya responsible for producing and distributing electricity to Kenyans across the country. Kenya Power holds the responsibility of delivering electricity to almost 70% of Kenyans with electricity access, however, this figure means more than 16 million Kenyans still lack electricity access.
Electricity theft is a common occurrence in Kenya. It happens when a person attempts to bypass the standard electrical meter on a power line in order to obtain electricity without payment. Thieves then bypass any electrical data tracking and effectively steal power from the company and the homes in the area. Annually, Kenya Power loses about $163 million due to electricity theft alone. Safaricom’s smart meter systems in Kenya will help prevent both leakages and electricity theft.
Smart Meter Systems Save Money
Smart meters involve real-time information of voltage usage and fault reports and detect theft and potential meter tampering. In the event of power theft, the meter sends alerts to the main computer in its system, and then, the company will have the option of shutting down the power line and sending the police to apprehend the thief.
The smart meters constantly monitor two wires, the neutral wire and the live wire and the current going through the wires. Smart meters continuously compare the two wires’ energy outputs. If the output of the live wire seems excessively high while the neutral is lower, then, there may be possible tampering or leakage.
The smart meter systems in Kenya will cost approximately $300 million to install. Safaricom and Kenya Power will split the revenue earned in the first eight years with the smart meters in place.
Creating Job Opportunities
Smart meters in Kenya seem to be a small addition to everyday lives, but their financial impact is significant. Kenya Power is a relatively small enterprise in the nation. The expected revenue to come in with the installation of the smart meters in Kenya is 71.7 billion KES ($651.23 million). This has the potential to increase earnings company-wide across all salary levels. Furthermore, the project will create job opportunities for Kenyans.
How Will the Initiative Help Kenyans?
In Kenya, the cost of electricity increased in September 2021. Those with access to electricity began paying 26.57 KES (0.25 USD) per electricity unit. The last monthly pricing was 2 KES less, making this spike in cost “the highest in five years.” This price hiking has continued as Kenya Power grapples with issues of power leakages and electricity theft.
The average annual salary after taxes in Kenya based on the average job is about 2,026,995 KES ($18,536). However, the more typical salary is 765,481 KES ($7,000). Furthermore, 26.3% of workers in Kenya survive on less than $2 of income per day. If the electricity prices continue increasing, many Kenyans will lose their ability to afford electricity and first-time users will struggle to gain access to electricity.
The introduction of smart meter systems will prevent severe revenue losses for Kenya Power. The smart meters in Kenya will benefit Kenya Power, Safaricom, workers and ordinary citizens. Preventing energy theft offers economic benefits for energy companies and workers, but it can also benefit energy consumers. Large-scale changes in security and energy efficiency could strengthen Kenya’s energy sector and infrastructure.
– Clara Mulvihill