Has the digital utility arrived on African shores?

The concept of a digital utility in the international arena has gained momentum to become the norm.

Despite the relatively haphazard implementation, this transition has nevertheless delivered solid results. These include the popular use of smart metering, electric vehicles, energy storage solutions, and smart customer information and billing systems. Seen as the ultimate business model to aspire to, the transition delivers substantial benefits. Of course, this also opens the door to numerous risks, such as cybercrime and not having adequate tech skills and historical expertise to quickly and expertly manage digital-related system failures.

In an African utility context, this transition appears to be in its infancy – where a few early adopters are nurturing their new-found digital tools to become fully fledged, integrated utilities of the future. These tentative steps by Africa’s energy and water utilities are in response to multiple market threats that can no longer be ignored. One overwhelming threat posed to the municipal and utility business model is the much-debated uptake of distributed energy resources (DER) – which is being aided by declining costs of solar PV modules and associated equipment.

The surge in DER growth is having a profound impact on traditional revenue streams, where declining income has motivated a dire response: the increase of tariffs for electricity, water and sewage services, such as the one recently put forward by the City of Cape Town. “The City makes no profit from the sale of electricity, water, sanitation provision or from rates income. Whether you use more or less, it costs the City the same to provide it,” exclaims the City’s mayoral committee member for finance, Johan van der Merwe. However, increasing tariffs is a short-term, knee-jerk reaction, which is likely to drive the digitally savvy utility customer further off the grid. Of course, there is no simple, one-size-fits-all solution to these lurking dangers. This is why events such as the African Utility Week continue to deliver a vital platform to engage market experts and unpack futuristic and traditional challenges.

As the official host publication to this annual event, in Cape Town this year on 15-17 May, ESI Africa, through this bumper edition and on our website, affords you access to the expanding pool of industry private and public sector experts.

Our editorial team will be onsite at the CTICC, conducting interviews and reporting live from the conference and technical workshop sessions – however, the best moments for us are when you visit our Media Lounge on the exhibition floor to say hello and share your valuable experiences.