Innovation Lab

Smart meters provide a cost-effective way of operating mini-grids

Smart meters provide a cost-effective way of operating mini-grids

Written by Faisal Olanipekun and Tombo Banda, CrossBoundary Mini-Grid Innovation Lab

Smart meters are essential in the successful operation of a mini-grid, and account for 7–12% of the typical capex outlay for a 50kWp mini-grid. Not only do they help measure electricity usage by customers, smart meters also allow for remote data collection, remote monitoring, remote control, billing, and security.

As such, they provide a more cost-effective way for operators to manage their sites, relative to the cost-prohibitive model of maintaining technical and administrative teams at each site — especially since these sites are typically in rural areas and sometimes spread across multiple countries.

However, there are two caveats that must be mentioned when discussing the impact of smart metering on utility operations:

Firstly, smart meters on their own do not help utilities improve operations. Smart meters can only deliver value when coupled with various software systems that make use of the functionality and data they provide. Not all smart metering hardware providers also provide useful software that fully leverages the meters themselves.

Secondly, there is no common standard for what constitutes a “smart” meter. Smart meters vary widely in the following characteristics, which dictate how much value they can provide:

What type of data they deliver (e.g., data on voltage and current, which can be used to monitor power quality; data on outages, which can be used to monitor system reliability)
The frequency with which that data is collected (e.g. 15 minute, hourly, daily)
The latency with which that data is delivered to the utility for use (e.g., “real time” — or within 15 minutes; within 1 hour; within 1 day)
The automation of receiving that data. For example, some smart metering systems may automatically provide a full “payload” of data that includes consumption, voltage, current, frequency, outage info, etc. Whereas other systems may only provide consumption, and must be manually queried to get other types of data.
To understand existing smart meters in the market and their limitations, CrossBoundary’s Mini-Grid Innovation Lab collaborated with mini-grid utility (aka mini-grid developer) partners to conduct a study that benchmarks metering technology features in the market and provides mini-grid utilities with critical inputs on the key features that predict success on mini-grid sites.

In 2021, the Lab collaborated with the University of Massachusetts, Amherst, Rochester Institute of Technology, Carnegie Mellon University, and PowerGen Renewable Energy to publish a paper titled Smart metering technologies for mini-grids in Africa: An Overview.

The paper provides a technical review of the features of commercially viable smart meters, including a description of key technologies. Building on that paper, we set out to show the result of our testing in this article, enriching that with mini-grid utilities’ real-life experience with the various metering technologies, with the aim of guiding smart meter technology companies and interested sector partners on industry needs, and areas where innovation is still needed. It will also help operators develop a checklist of key criteria for choosing smart meters.

The technical specifications of the smart metering brands tested across multiple mini-grid sites are summarized in Table 1 below. Note these features represent the data of specific models used at the time of testing — these may not be representative of the technical performance of the meters today.

Table 1: Smart metering technologies tested across mini-grid sites

Mini-grid utilities prioritize a meter’s hardware, software, and range of technical support when deciding which meters to procure
The key features mini-grid utilities identify as critical for meters across their sites can be categorized into three key sections: hardware, software, and quality and range of technical support.

Mini-grid utilities typically assume basic meter functionality like voltage and current measurement as a given in all viable smart meters. Five essential hardware features that mini-grid utilities value the most in meters are:

Local Radio Network Topology
Smart meter technologies deploy two main topologies — mesh topology and star topology. For mesh topology, a meter will transfer data to the meter with strongest signal closest to it and repeat the process until the data is received by the Data Concentrator Unit (DCU) which then sends data to the cloud. The same process is undertaken if the DCU is sending commands back to the meters. On the other hand, star topology is a network where the meters communicate directly with the DCU.

While different smart meter companies have good reasons to adopt either technology, all mini-grid utilities we interviewed find mesh topology more reliable because of its ability to bridge large distances. According to site technicians on the Lab’s metering study, mesh topology tends to have higher local communication uptime between the smart meters and the DCU — hence allowing for better remote data monitoring.

2. Connectivity/Modem

The type of modem available in smart meters is crucial to mini-grid utilities because of the need for remote monitoring and control. Modems can be external or in-built, covering different wireless network technologies, including 2G, EDGE, 3G, and 4G.

An inbuilt modem has the advantage of simplicity in design because it has fewer components and interconnections. However, from mini-grid utilities’ experience, having an external modem is advantageous because it offers more flexibility as it allows its components, like sim cards to be changed easily, or in some cases the modem itself could be completely replaced without opening the meter up. Alternatively, a DCU may include additional ethernet ports that can be used to provide a backup or primary connection to the internet, hence having both an inbuilt modem and an external internet source which may be slightly more expensive.

Mini-grid utilities also want smart meter systems with 2G, EDGE, 3G and 4G functionality instead of being limited to any combination of these. One of the reasons for this is that they typically need higher network speed for their site IoT (internet of things) devices to operate adequately, as observed by one mini-grid utility. As a result, their more peri-urban sites can benefit from the availability of faster internet connections where this range of functionality is available, instead of being limited to just 2G.

3. DCU local Wi-Fi interface

Given weak cellular signals in most remote areas where mini-grid projects are found, mini-grid utilities have expressed that having a bypass mechanism to manually process failed transactions via local agents is valuable. This is done via WiFi-DCU interface over a local network, to ensure customers can continue to top up their accounts and have access to power in situations where there is an internet outage. Some DCUs on the market already have this feature. The user can therefore connect with any wifi device — be it a tablet, smartphone, or laptop — directly to the DCU to access certain local controls provided by the smart metering company’s software.

4. Ingress Protection rating

Ingress Protection rating (IP) is an international standard used to rate the degree of protection or sealing effectiveness in electrical enclosures against intrusion of objects, water, dust, or accidental contact. This is very important because most smart meters are exposed to harsh outdoor weather conditions. Mini-grid utilities have mentioned that IP rating of 54+ is the minimum to ensure meters are not compromised — this means the meter is at least protected from dust, and water spray from any direction.

IP protection can be provided by the meter itself, or through the use of a secondary enclosure with higher IP protection than the packaging of the meter. This has a second advantage of being a convenient way to install multiple meters at a single location, such as a pole with four to eight customer connections.

5. Life-time

This refers to the useful life of the meters. An acceptable threshold for mini-grid utilities on this is 10+ years. They also want smart meter companies to provide warranties that back this lifetime threshold on their meters (current warranty periods are too short at an average of about 12–36 months).

Examples of smart meters: Elmeasure PE5121, Spark meter SMRSD Meter, Hexing HXP100DII
Mini-grid utilities select meters for use based on the availability of APIs for data collection purposes, degree of anti-tampering protection, and the user interface of the meters for the mini-grid utility and their customers:

API availability
An Application Programming Interface (API) is a software intermediary that allows two applications to talk to each other. This is important to mini-grid utilities because it impacts cost, as limited API functionality increases the effort and cost required to collect and analyze data. It is also particularly key because it allows mini-grid utilities to seamlessly integrate smart meter data into other software systems they use. In fact, the availability of API integration for smart metering technologies is so important that mini-grid utilities have said they would not consider any meters that do not have APIs available.

2. Anti-tampering capability

This feature is used to detect power theft and tampering. In case of interference with the meter, a tamper code is typically needed before the meter can be restarted. Mini-grid utilities think this is a useful but “nice-to-have” feature in smart meters. Some mini-grid utilities overcome tampering by installing meters on top of poles, and as such consider meters that are installable on poles as vital.

3. User interface

The user interface (UI) is the access point where a mini-grid utility interacts with the installed system. Mini-grid utilities believe meter UIs are typically not good enough or easy to use. Ideally, the UIs should be user-friendly, and easy to navigate even for the average user.

Customer Support
Mini-grid utilities believe robust customer support is critical to their decision-making on meters. The range of support desired by mini-grid utilities includes:

Online self-help resources (e.g., self-help articles on installation, troubleshooting, and smart meter management guides etc.)
Online support portal for customers available on business days, and for emergency issues within a specific time window on non-business days)
Designated help email address, phone numbers and messaging platforms (e.g., Whatsapp, Skype etc.)
Scheduled regular check-ins to evaluate meter customer partnerships and product-related issues/feature requests.
While cheaper meters are desired, mini-grid utilities focus on value for money instead of just the absolute cost of meters
Meter cost varies considerably based on the meters’ features (both hardware and software) and the nature of support provided.

Mini-grid utilities are not necessarily interested in the cheapest meters but the meters that offer the best value for money while being competitively priced in comparison to other products in market.

Mini-grid utilities want meters that work, are durable, require minimal maintenance, are easy to operate for the average field technician, and provide remote access to site data via APIs.

Current competitive pricing for single-phase smart meters ranges from $40–60 per connection (only smart meter), and $80–110 per connection (including cost of DCUs, antennas and other accessories).

In addition to upfront capex, operating cost in the form of SaaS (software as a service) fees to metering companies, and technical maintenance costs are key, and currently considered to be too high.

For example, SaaS fees for smart meters are as high as ~0.80 — $1 per customer per month, and the average revenue per customer (ARPU) can be as low as ~$1–2 per customer per month — thus being potentially unsustainable.

Developers appreciate the rapid development of smart meters to date but need more innovation tailored to their needs
Smart meters have come a long way, especially in the context of innovating to meet the needs of African mini-grids. In fact, some of the smart metering systems in use far outpace the capabilities of many of the smart meters in use on US or European utility systems where smart meters only provide consumption data once a day. The fact that African mini-grids serving low-income consumers can access near real-time data on outages and losses and use APIs that offer extremely powerful capabilities is a testament to the ripe innovation in the sector. However, for mini-grids to operate as efficiently and cost-effectively as possible, more user-focused design and innovation are needed.

Mini-grid utilities want meters that meet their needs, and do not require as much to maintain and operate. Mini-grid utilities have also expressed interest in multi-channel metering, as a potential enabler for e-cooking and other applications, and interoperable metering management and control platforms that allow meters from different manufacturers to be integrated on, managed, and controlled from a single platform.

The Mini-Grid Innovation Lab is eager to work with smart meter manufacturers, technology companies, and other interested parties to ensure smart meters continue to evolve further to meet the outstanding needs of mini-grid companies and their customers.

Please reach out to us at [email protected] for collaboration opportunities!