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Project Details

Renewable Energy
Robyn Meeks
Pakistan
Kyrgyz Republic
Duke University
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Prof Robyn Meeks

Enforcement in electricity services: evidence from a randomized smart meter experiment in Kyrgyzstan

The role of metering and infrastructure improvements in power system resilience during COVID-19

Power systems and COVID-19 in the developing world: understanding the role of metering and infrastructure improvements in power system resilience

Background, challenges and context

When the quality of electricity delivered is poor – which is common in many developing countries – consumers may resist paying for services. Low bill payment and high theft mean electricity distribution companies have lower cost recovery and less to invest in infrastructure maintenance, modernisation, and technical upgrades – which, in turn, perpetuates poor-quality service. This cycle – an infrastructure quality trap – can be persistent.

Concerns around these issues have increased during the COVID-19 pandemic. Lockdowns and quarantines have restricted the movement of billions of people, affecting many utilities’ revenue collection models – and therefore the delivery of electricity services.

In many developing countries, meter readers visit consumers multiple times per month to read meters, record consumption and deliver bills, and customers typically visit utility offices or other payment locations to pay their bills. Some utilities have requested that customers pay bills electronically, but this is infeasible for households lacking internet connections, computers, and smart phones.

Another challenge is that, due to lockdowns and people self-isolating, household electricity consumption might be higher than usual, imposing an extra burden on the electricity distribution system, which might further affect losses and revenue collection. Furthermore, without utility workers regularly patrolling neighbourhoods, there is less prevention and identification of illegal connections and electricity theft.

Prior to COVID-19, some utilities implemented efforts to increase cost recovery, including installing metering systems (electronic, pre-pay, or smart meters), which could mitigate the problems of low payment and theft, and infrastructure improvements such as aerial bundled cables (ABCs), which, through having an extra protective layer, are designed to prevent illegal connections. Other utilities have implemented institutional innovations in efforts to increase cost recovery as well.

These interventions were designed to mitigate problems in typical times. During the COVID-19 pandemic, they are potentially more important, with greater benefits, but there is currently no evidence on their effectiveness.

 

Research overview and objectives

This project analyses the impact of COVID-19 on electricity distribution companies and explores how the pandemic has affected the efficacy and resilience of metering systems and infrastructure upgrades in reducing loss and/or increasing cost recovery. It will also assess if the impact of COVID-19 on electricity service and consumers’ bill payments differs across income groups.

The research is being carried out in Kyrgyzstan and Pakistan. Prior to 2020, both countries suffered from high losses, low cost recovery, and sub-standard electricity service quality. They have also been substantially impacted by COVID-19, in terms of cases and deaths as well as lockdowns severely restricting movement – but the pandemic has also posed a new threat to the resilience and functioning of their power systems.

In Kyrgyzstan, smart meter installations have featured heavily in electricity distribution companies’ strategies to reduce losses and increase cost recovery; an estimated 215,000 electricity consumers had smart meters installed as of February 2020 (representing approximately 15% of the country’s total electricity connections) and there are plans to install several hundred more during 2020.

Meanwhile, Pakistan’s approach has included both institutional innovations and technical upgrades. Utility Karachi Electric has made institutional efforts to incentivise payment increases by feeder level. Technological upgrades have focused on the replacement of old infrastructure with ABCs.

The research questions are:

  • What is the impact of COVID-19 on utilities’ delivery of electricity services?
  • Can infrastructure improvements or metering systems mitigate any negative effects of COVID-19 on power system resiliency?
  • How do different infrastructure functions impact indicators of system resiliency (e.g. non-technical losses, revenue collection, and service interruptions)? What is the value of these benefits to electricity utilities?
  • Are there differential impacts for high and low-income consumers?
  • If so, through which mechanisms do these differential impacts operate?

The research design, methodology, and data vary depending on the country. The data required will be collected via phone surveys with distribution company representatives; focus groups held with central utility representatives and staff from local utility offices (who are responsible for electricity delivery and bill collection); and household surveys. The team will also use data provided by electricity distribution companies and their collaborators and partners.

In addition, the team will analyse the impact of Pakistan’s three-month COVID-19 bill payment relief package (for commercial and industrial consumers of electricity) on bill payment and quantity of electricity consumed.

The research will provide a better understanding of the relationship between COVID-19 and electricity distribution companies’ financial viability and provision of quality electricity services. It will inform decisions for future planning, operation, and maintenance of power supplies in developing economies.

 

Local partners

Kyrgyz State Technical University

Karachi Electric, Pakistan

Lahore University of Management Sciences (LUMS), Pakistan