HomeIndustry SectorsFuture EnergyThe Big Question: Is Nigeria embracing the 4IR?

The Big Question: Is Nigeria embracing the 4IR?

The Nigerian power sector is no stranger to an industry revolution – having taken the route to privatisation and unbundling its energy market.

Now the Fourth Industrial Revolution, popularly known as the 4IR, is another change set to transform how utilities and businesses operate in Nigeria’s market.

This article first appeared in ESI Africa Issue 4-2019.
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The Big Question we asked the experts is: What are the Nigerian energy and power industry stakeholders doing to embrace and take up the opportunities presented by the Fourth Industrial Revolution?

Olubunmi Abayomi-Olukunle, Lead Transaction Counsel at Balogun Harold, Nigeria, comments…

On the regulatory side, the most consistent pattern that we see – and in particular, facing the adoption of Artificial Intelligence (AI) systems within the energy sector – is the improvement in data collection and analytics abilities within Nigeria’s primary petroleum sector regulator, the Department of Petroleum Resources and across agencies.

This development is a very useful foundational layer for AI adoption when one considers the critical role that data plays within AI systems.

We also find that, more than previously, energy regulators are now more meaningfully aware of the value of qualitative data and the strategic opportunities that AI can create, especially in terms of how it can be used to drive internal efficiencies towards achieving set regulatory objectives. There are ongoing deliberations between regulators and policymakers in the energy sector, around how to better adopt AI as a regulatory tool.

It is useful to note that the regulators are yet to draft any AI-specific regulations or projects to promote the use, development and adoption of this 4IR resource. Compared to US, China, India, UK or Canada, Nigeria does not yet have a national AI policy; and the country’s latest economic strategy document, the Economic Growth & Recovery Plan, does not make any mention of artificial intelligence, although the National Information Technology Development Agency is currently debating the publication of a National Smart Policy Framework, which should apply across sectors.

There is definitely more traction on the industry and private sector side. In the power/electricity sector, electricity distribution companies are adopting smart meters as one of the options to reduce the incidence of electricity theft and, generally, ATC&C losses. Nigeria’s electricity regulator, NERC, has consistently indicated a preference for smart metering systems and has published smart metering regulations specifying minimum, physical, functional, interface and data requirements for a smart metering system.

In the energy sector, oil majors with operations in Nigeria – relative to the local oil companies – are the early movers in terms of AI adoption. These companies are using a number of strategies that include collaborating with global technology companies, sponsoring AI research projects, and implementing early-stage investments and deployment of own chatbots. [Ed: see ESI Africa Issue 4 2018 page 42 for more on chatbots.]

Overall, the adoption of AI is not yet broadly distributed within various sectors. It is very clear, however, that the energy and power sector’s industry stakeholders, including the regulator, are locked in a hunt to uncover the value and competitive edge that AI can deliver. This state of affairs presents a clear business opportunity for AI firms looking to do business in Nigeria.

Ravindra Joshi, Former Chief Driving Officer, KEDCo, Kano, Nigeria, comments…

There is not much being done to embrace the opportunities presented by the fourth industrial revolution because the basics required by industry to function effectively before the use of AI and IoTs are yet to be put in place.

In Nigeria, the distribution assets covering 33kV, 11kV lines, transformers, circuit breakers and feeder pillars, which provide power at 415 volts level, have very high losses because they are old, poorly designed and constructed, and mostly have used sub-standard materials. To improve upon the design – for example 11kV RMUs near DTs for sub-distribution of power and isolating faulty zones without having an adverse impact on reliability – is required.

The grid operated by Transmission Company of Nigeria (TCN) does not have enough capacity to deliver power to distribution companies (Discos). Several lines to date have half the capacity compared to the standard design of line capacity at the 132kV level. Several circuit breakers are now over 50 years old and therefore due for replacement. Added to this, a number of transformers are very old and do not have the core materials that would make them efficient and, therefore, they have huge technical losses.

Another basic area, which needs correction before considering 4IR solutions, is the power factor (PF). Efficient utilities operate at over 0.95 PF. This leads to low technical losses because current flowing is reduced for the same power.

Investment in PF correcting equipment was made but to date, these have not been commissioned.

When the distribution and transmission networks are strengthened, reliability and customer service can be improved through the automation of the DMS (Distribution Management System) and OMS (Operations Management System). The meters at distribution transformer level need to be smart meters for analytics to improve energy management. For implementing DMS we need hardware that can communicate events and we need communication infrastructure to a central control room.

Once we do the above, we can go for smart metering of customers. However, independent operators, known as Meter Asset Providers (MAP), have been drafted into the industry in Nigeria to do the metering for Disco customers using pre-paid meters. Smart meters are not envisaged during the initial metering of customers under MAP even though of late the cost of smart meters has gone down. Nigerian Discos need to improve upon their collection efficiency that currently averages 64% but could deteriorate if pre-paid meters are installed under the MAP regulation. Notably, Discos are unable to control meter bypass, which is rampant in the industry.

In Nigeria, handling of village customers is similar to India’s New Delhi slum model. The number of customers in this segment is also huge and what works in New Delhi is not the technology, but the “Winning The Heart” model. In Kano, a pilot project was implemented in three villages with the WLC (Women Literacy Centre) run by KEDCo, which resulted in a collection efficiency (CE) jump from 6% to 60%.

As for IoT, it goes with the per capita income of a society that has enough disposable income to buy smart appliances that can communicate with smart meters and smart grid. Today, a sizeable population is living at the basic sustenance level, and we can only talk about basic appliances to improve upon the quality of life.

As regards power access to far-flung poor village customers, solar rooftop and micro-grid is the fastest solution.

But a separate study needs to be done on who will pay the capital and running costs. To start with, off-grid models will be best, and later it can be grid-connected with associated export and import meters. These are my views after operating in Kano for about two years as Chief Driving Officer of KEDCo, Kano, Nigeria. ESI

Join power and energy stakeholders who are attending the Future Energy Nigeria conference in Lagos on 12-13 November 2019 to uncover more on this topic. See pages 62 to 67 for more about the conference. www.future-energy-nigeria.com

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