Pakistan is facing a severe energy crisis, with significant power shortages and electricity theft causing substantial economic losses. The proposed solution is the introduction of smart metering, which would improve energy management, reduce theft, and empower consumers by providing detailed consumption information. Implementing smart meters could save billions in losses and enhance the operational efficiency of the energy sector in Pakistan.

1. 192468511747500Smart Metering Solution in PakistanBusiness Proposal23749002011680Submitted By:00Submitted By:Arslan Aftab<br />Contents TOC \o \"
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\h \z \u Executive Summary PAGEREF _Toc296547698 \h 2The Problem: PAGEREF _Toc296547699 \h 3Recommendation: PAGEREF _Toc296547700 \h 3The Solution: PAGEREF _Toc296547701 \h 4Functions: PAGEREF _Toc296547702 \h 4Feasibility: PAGEREF _Toc296547703 \h 5The Benefits: PAGEREF _Toc296547704 \h 6Current projects: PAGEREF _Toc296547705 \h 9Events: PAGEREF _Toc296547706 \h 10The Need of Smart Metering in Pakistan: PAGEREF _Toc296547707 \h 11Our Products: PAGEREF _Toc296547708 \h 12Conclusion: PAGEREF _Toc296547709 \h 13References PAGEREF _Toc296547710 \h 14<br />Executive Summary<br />Pakistan is swamped with energy crises. The continuous load shedding has troubled the economy so much that there is no growth and unemployment rate is increasing day by day. The managing director of PEPCO, Tahir Basharat Cheema, is convinced that the major cause of outage of electricity is due to the local pilfering from the system; and if this is tackled properly, PEPCO could save billions of dollars; and thus could work on the development project with more resources.<br />Hence there is a need to actively seek ways to encourage efficient use of available energy and develop a more secure supply side of energy without any energy theft. <br />One potential solution to tackle the above mentioned problem is to introduce smart metering around the country which will provide detailed information about the consumption of the energy to both consumers and the utility. This, in turn, will encourage in the demand side the consumers to actively supervise their energy consumption behavior and modify it in order to meet the monthly bill targets; and in the supply side, it can help the utility to become more reliable and secure by providing customized per unit prices and quickly detecting any kind of energy theft that is taking place in the region.<br />The aforementioned features of smart meters make it easier for us to see why they are gaining wide acceptance around the world. Consumers are reaping monetary benefits and the knowledge that they are doing their part to reduce the size of their carbon footprint. Utility providers are now better able to forecast consumers’ demand, and are reducing their internal costs by pinpointing power outages. Clearly, the benefits are huge for the energy consumer and the provider.<br />The Problem:<br />Pakistan is swamped with energy crises and it hasn’t been able to meet the energy requirement of the general public for many years.<br />Pakistan is a developing country and it has failed to fulfill the energy requirement of the economy. This is the major reason why economy of Pakistan is exacerbating everyday instead of having prosperity and growth like other developing countries around the world. Through an estimate, Pakistan has a power shortage of 5300 MW in 2010 and this shortage has been increasing due to high growth in demand and a rather slow or no development work on the supply side. Energy crises has put the whole country in a test and each and every person in the country is tired of the continuous load shedding which sometimes exceeds 16 hours per day. The major problem in the management of energy in the supply side is that energy usage shows a high degree of variability –it is at peak during summer due to use of air-conditioners and fans and it is low in winter.<br />The second problem and which essentially is the major reason of slow development of energy sector of Pakistan is electricity theft. Reportedly, Pakistan is losing Rs.80 billion annually on account of electricity theft. <br />Recommendation:<br />Pakistan needs to actively engage in looking for means to encourage a more rational use of energy.<br />For the better management of the energy in both demand side and supply side there is a need of an infrastructure which provides detailed information regarding the usage of electricity to both consumers and suppliers. This will allow the users to actively supervise the energy consumption and adjust their behavior to their target/ pre-determined consumption of energy. Further it will allow the supply side to better predict the demand of electricity and thus provide a more reliable supply side. Moreover, it will allow the utility to set the prices according to peaks and lows in the demand side.<br />The Solution:<br />Smart Metering: It generally involves the installation of a “smart” device at a residential/ industrial customer and the regular reading, processing and feed-back of consumption data to those customers.<br />The “smart” device mentioned above is actually a smart meter which is made of a modern, innovative electronic device capable of offering consumers, suppliers, distribution network, operators, generators and regulators a wide-range of useful information, enabling the introduction of new energy services.<br />Smart Metering is often referred to as automated meter reading (AMR) or in the case of real-time two-way communications as advanced metering infrastructure (AMI)<br />When we say smart meter we usually mean electricity meter, but smart meter can also be used for multi-purposes such as for the measurement of gas or water consumption.<br />The smart meters have three basic functions: (1) measure the consumption of electricity; (2) remotely switch the customer off; and (3) remotely control the maximum consumption of electricity. An important characteristic of the meter is the possibilities through which it can communicate. The communication infrastructure comprises PLC (existing electricity grid), a wireless modem (GSM or GPRS) or an existing permanent internet connection (ADSL).<br />Functions:<br />The detailed functionalities of a smart meter are given below:<br />real-time or near-time registration of electricity use

2. offering the possibility to read the meter both locally and remotely (on demand);

3. remote limitation of the throughput through the meter (in the extreme case cutting of the electricity to the customer)

4. ability to read other, on-premise or nearby commodity meters (e.g., gas, water)Feasibility:<br />Technologically, there are no obstacles for the introduction/ rollout of the smart meters.<br />The Italian case – the rollout of more than 30 million smart meters for the residential customers – and the demonstration of the numerous projects of smart meters by different countries around the world show us that this technology can be used on a large scale and it is cent percent a down-to-earth idea. In fact, many experts believe that as typewriter and dial-phone are replaced by digital advanced equipment; similarly, the smart meters are an advanced form and a logical successor of the mechanical electricity meter.<br />The Benefits:<br />Smart Metering has numerous benefits and that is the reason of its wide acceptance around the world by major developed countries all across the globe. Some of the major and most prevalent benefits are discussed below.<br />It will allow the consumers to manage their electricity consumption more efficiently if given the time-based rates:

5. We see that the electricity consumption differ with a high degree in different season. In the summer season the consumption increases due to an intensive use of Air-conditioners and other equipment. The utility charges different prices to customers in peak periods and off-peak periods. Obviously, the utility will charge high price when the demand is high (Peak Period) and will charge less price per unit when demand is low (off-peak period). The consumer could actually make an efficient use of the electricity by adjusting his/ her behavior in such a way that they consume less electricity in the peak periods and necessary amount in the off-peak period; thus saving a lot of energy bill.

6. It will increase the privacy of the consumers and reduce the operational cost of utility by eliminating the on-site visits by the utility to check the meter readings:

7. One of the functions of the smart meter is: both the consumers can be informed about the readings of the meter even in the remote areas. Hence the utility can charge the bill according to the reading of the meter without having made on-site visits. This will result in privacy to the consumers and also a high reduction in the operational cost of the utility which will ultimately benefit the consumers with low energy charges per unit.

8. Smart meters cannot be tampered and provides an accurate and actual consumption overview of their region; hence could easily detect any kind of fraud or theft.

9. One of the main problems around the world, especially in the developing countries is the power stealing and energy theft. The mechanical meters can be tampered. People pay some money to the local electrician to reverse the readings or slow the pace of the electricity meters. In Pakistan it is reported that the energy sector incurs a loss of 80 billion per year due to energy theft; 400 consumers of Karachi alone get away without paying bills of their electricity consumption. The smart meters with their latest and advanced technology cannot be tampered and in turn will save billions of dollars to the energy sector of Pakistan.

10. Moreover, by using smart meters the utility will be able to get detailed information about their region, which means they can examine any suspicious areas where energy usage is higher than expected, and thus smart metering will provide the utility with a tool to detect fraud.

11. It will reduce per-capita carbon footprint that energy customers around the world are striving towards.

12. The smart meters give detailed information about the consumption of electricity which also includes the measurement of carbon emission due to the usage of electricity. This means the people who are environmental friendly could actually make an informed decision about their carbon footprints and control it by limiting their electricity consumption. This is eventually a positive measure against global warming.

13. It will allow the Utility provider to better forecast the demand with the real-time detailed information and thus set the prices accordingly:

14. The utility such as PEPCO with smart meter will be given detailed information about the usage of electricity of each and every region separately. This will allow the utility to charge customized rate to each region separately and also charge peak and off-peak period rates distinctively.

15. Smart meters enable the utility provider to cut-off the energy supply of the defaulters without having the utility make the site-visit manually.

16. In the extreme case, when the service provider has to cut-off the power supply of the defaulter the utility could do so without having made a site-visit; thus the utility can spare itself from all the fuss that the defaulters would make during the power supply cut-off.

17. It will allow rapid outage detection and restoration of service:

18. Currently with the mechanical energy meters, the detection of an outage and restoration of power are guessing games in which the supplier largely rely on the consumer calls to give them an idea of how large a power outage might be and where the power outage is occurring.

19. It will allow the consumers to make informed decisions when provided with detailed and accurate real-time information about their consumption behavior.

20. The smart meters also have the capability of storing the historical records of the consumption of the power consumption. Hence, the consumers will be able to make an informed decision of their electricity consumption and will likely to learn how to use baking-oven, dishwashers and washing machines during off-peak periods and also will likely to turn off lights more readily; thus saving themselves a lot of money.

21. Further it can enable the service provider to notify the consumers through a text message when the bill exceeds their targeted amount, thus encouraging the consumer to act more efficiently toward their consumption of electricity.

22. It will reduce the need of more and more energy plants to meet the growing energy consumption demand as it will lower the consumption demand of electricity.

23. Building power plant to meet the demand of occasional peak period is very expensive and costly. Increased demand side management by enabling the consumers to modify their consumption behavior could slow down the growth in the energy demand. Also the advanced metering will allow the consumers to “round off the peaks” thereby reducing generation costs and making more efficient use of existing generation capacity.

24. Additional benefits:

25. Labor reduction: It refers to the additional cost reduction in the call center labor, billing and collection and disconnection of defaulters.

26. Process improvement: It refers to the reduced energy theft, increased billing accuracy and tighter billing collection.

27. Infrastructure improvement: It refers to the benefits of a more accurate, digital meter and the fact that installing new meters in a whole new area will reduce the future meter replacement budget. Current projects:<br />Many countries around the world are actively engaged in introducing smart metering to promote efficient use of energy and encourage demand responsiveness among consumers.<br />Canada: The Ontario Energy Board in Ontario, Canada set a target of installation of 4.3 million smart meters with minimal technical standards covering all the customers of Ontario.

28. United Kingdom: In December 2009, The United Kingdom Department of Energy and Climate Change announced their intention of installing smart meters all around UK by year 2020.

29. United States: On July 20, 2006, The Northern California Territory of Pacific Gas and Electric (PG&E), approved a program to install 9 million smart meters for the measurement of consumption of gas and electricity. The major reason for this approval is that California has a summer peak of power demand during 50 to 100 hours per year due to the use of air-conditioning. The regulatory agency is making efforts to decrease this peak by making consumers efficiently respond to peak and off-peak prices.

30. Italy: The world largest smart meters deployment took place in Italy by Enel – the largest power company in Italy- with more than 27 million customer base. It has achieved the target of deploying smart meters to its entire customer base between 2001 and 2005.

31. Australia: In 2006, the Essential Service Commission (ESC) of Victoria, Australia started installing smart meters all around Victoria. In 2013 about one million smart meters should be installed.

32. Netherland: In Netherland, starting from 2008, all residential customers will be provided a smart energy meter. The proposed time frame for the whole project is 6 years. In the meantime, some pilot projects are also being developed. Other than the countries mentioned above, many developed countries like Sweden, New Zealand, France, Ireland and Japan are actively engaged in smart metering projects. Not only developed countries but also we have examples of developing countries like Azerbaijan which is actively engaged in the deployment of AMI to enable smart metering. These meters will have the ability to accept bank cards to credit the meter for billing purposes.<br />Events:<br />The whole world is celebrating the invention of the intelligent and smart device of Smart Meter. Different events in different parts of the world are taking place to create awareness among the consumers about this novel invention. The schedules of some of the events are given below. <br />14-15 March 2011Oslo, Norway12-14 April 2011Copenhagen, Denmark17 - 18 May 2011Warsaw, Poland2-3 June 2011London, UK4-6 October 2011Amsterdam, The Netherlands4-6 October 2011Amsterdam, The Netherlands16-17 November 2011Moscow, Russia<br />The Need of Smart Metering in Pakistan:<br />Pakistan has been troubled with energy crises for more than five years. It needs to actively engage in solution which will enable its customers in management of their energy consumption and also enable the development of energy sector by reducing the operational costs as much as possible. Further, the energy sector of Pakistan is in no position to incur losses at this troubled stage. But still we see that it is losing more than 80 billion rupees per year due to energy theft and; more than 400 consumers in Karachi alone are consuming electricity without paying their bills. <br />According to PEPCO’s Tahir Basharat Cheema most power outages occur in due to overloads caused by local pilfering of the systems. He said that the first priority of the task force is to target meter tampering and then make the utility company to operate more efficiently; and this target could only be achieved by introducing smart metering in Pakistan.<br />The managing director, Rasul Mehsud, is convinced that the smart metering can save billions of rupees and it can enable the power sector to curtail its expenses. According to official sources, the smart metering solutions can reduce electricity theft from 10 per cent to 3 per cent per annum, which can save more than 30 billion rupees per annum. <br />The CEO of LESCO, Saleem Akhtar, spoke about the success of the smart metering pilot project which had been experimented in Shadbagh, Shadman, Dehli Gate areas of Lahore and he told how LESCO has been able to save tens of millions of rupees just by the investment of 6.2 million rupees only. Reportedly, theft and losses fell sharply from 11 per cent to 2.9 per cent in Shadbagh and Shadman and from 13.2 per cent to 4.4 per cent in Dehli gate, after installation of smart metering. <br />The above analysis shows how badly the power sector of Pakistan needs the installation smart meters for the efficient and theft-free usage of power across the country. <br />Our Products:<br />Micro-Tech Industries Limited is one of the pioneers in Pakistan to introduce smart meters in Pakistan. Some of the models (with their core features), offered by Micro-tech, have been discussed below:<br />Conclusion:<br />The whole analysis regarding the current energy crises and the energy theft issues coupled with the losses of more than billion dollars in the energy sector invoke us to think new, improved and efficient ways to make the most of the available energy resources that we have in Pakistan; and smart metering is one the most potential applicable solution that is available to Pakistan to cope with this problem.<br />From the wide acceptance of this project around the world shows us that, with no doubt this technology (smart meter, infrastructure, data processing) is mature and can be implemented on a large scale to encourage an efficient use of s scarce resource such as energy.<br />Al though there are some challenges to be tackled. The major and foremost challenge is that the success of this project is largely dependent on the consumer who chooses in the first place to make an efficient use of energy and save their money. There is a need for the awareness of this equipment and a know-how is also very important. Also, it is reasonable to say that smart metering should be started in the industrial sector and urban areas first and after the success of the project in those areas it should be deployed intensively in the rural areas of Pakistan.<br />References<br />http://freebird.instablogs.com/entry/power-theft-and-power-crisis-in-pakistan/<br />http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/April/business_April110.xml&section=business&col=<br />http://www.energy-retail.org.uk/smartmeters.html<br />http://www.mei.gov.on.ca/en/energy/conservation/smartmeters/<br />www.idc-online.com/technical_references/pdfs/.../Smart_Metering<br />http://en.wikipedia.org/wiki/Smart_meter<br />