A sustainable approach in curbing electricity theft

By Paa Kwasi Anamuah Sakyi

Even as the world seeks to provide adequate electricity generation capacity to provide economic opportunities for its growing population, electricity theft remains one major issue the global economy is grappling with.

The annual study ‘Emerging Markets Smart Grid: Outlook 2017’ by the Northeast Group LLC, found that in developing economies, a staggering $64.7 billion dollars are lost each year to non-technical losses ― mostly due to electricity theft. Whilst the study associated the huge electricity theft to developing economies like South Africa, India, China and Brazil; the truth is that even the most developed countries are susceptible. The study concludes that the rest of the world records a loss of $31.3 billion as a result of power theft on annual basis, making electricity the third most stolen commodity following credit card information and cars.

Evidence from other studies shows that electricity theft is an increasing problem worldwide, and Ghana is not immune either. An exercise conducted by the Electricity Company of Ghana (now Power Distribution Company) mid last year revealed that 11,890 out of 250,616 electricity meters inspected had been tampered with. Per regional distribution, the thievery is prevalent in the Ashanti Region, followed by Accra West and the Central Region.

While we seek to find a more sustainable approach to deal with the canker in Ghana, it is important to also find the actors in this business of stealing power, and the factors underlying their actions.

Actors and Motives

Consumers, and staff of power utilities cum their accredited agents are identified as the major actors in electricity theft. And the stealing is not only confined to the residential sector and involving home-owners and renters, but with businesses and individuals who operates energy intensive businesses like steel, paper, and chemicals. Churches, hospitals, police barracks, schools, and even some state agencies, are among the list of consumers who steal electric power.

The stealing of electricity is found to be closely related to governance indicators, with higher levels of theft in countries without effective accountability, competent power sector staff, political stability, good infrastructure, efficient government structure, low corruption levels, and accountability of power sector staff.

Studies reveal that electricity theft is influenced by economic and political reasons, including poverty and unemployment. Others have placed the blame on higher electricity tariffs, corruption borne out of sheer greed on the part of customers who want to maximize profit or meet their insatiable desires, illiteracy, poor quality of services offered to customers and fueling resentments, psychology of consumers who are susceptible to stealing, and weak enforcement of laws governing electricity theft.

Methods of Stealing

Different methods are used in stealing power in different jurisdictions, and these methods includes meter tampering, by-passing the meter, non-payment of bills, connection directly from the main power line, physical destruction of meter, swapping the input and output connections and neutral wire grounding, interfering with meter counter movement to change consumption reading, fake billing, tampering of central data-base, and using illegal pre-paid voucher.

Connecting directly to the grid, by-passing the meter, reversing meter counter to change consumption readings, halting the movement of meter counter; remains the commonest methods in stealing power in Pakistan. In Jamaica, by-passing the meter, and illegal connection are the main techniques used in stealing. The most prevalent recorded case of stealing electricity in Ghana involve meter by-passing and meter tampering.

Quantifying Electricity Theft

It is difficult to quantify the electricity revenue lost to illegal connections, unbilled consumption, and non-payment of power consumed. However, in some jurisdictions of sub-Saharan Africa and South Asia, losses incurred through stealing outstretch 50 percent. It literally means that half of the revenue is lost to theft. Every year in India alone, more than a quarter of electricity supplied is lost to theft, with value estimated in the billions of dollars. According to utilities in Nigeria, they lose more than 40 percent of their electricity supplied to theft.

The Electricity Company of Ghana (ECG) reports loosing close to a quarter of its revenues from power supplied due to power stealing. A recent monitoring by ECG in Accra revealed that the total amount of revenues the company lost through the nefarious activities came close to GH¢46 million. The Accra West Region of the power distributor managed to retrieve GH¢5,288,148 from 2,550 customers who illegally utilized electricity between January and December 2018. The amount is said to be 28percent increment over similar recoveries made in 2017 and representing a total of GH¢5,033,799 kilowatt hour of electricity unit.

In the Ashanti Region, ECG retrieved over GH¢21.5 million from individuals and companies which had illegally connected electricity to their premises in 2018. The amount collected covered 17.75 million kilowatt hour of power stolen.

Effects of electricity thefts

Power theft has adverse impact on power utilities operations, as it deprives them of raising the needed revenue that could be used to maintain the network to guarantee regular and increased supply of power. The revenue loss may also compromise the compliance with standard observations, regulatory targets and business efficiency. The ripple effect of the revenue loss to the utilities is that, legitimate consumers will pay more for electricity in the form of higher tariffs, and government may be compelled to subsidize in some cases. The revenue loss also affects the prompt payments to power producers and transmitters.

The unsafe and illegal connections of the electricity and meter tampering also leads to injuries and fatalities. Aside posing danger to the persons who indulge in the illegal connection, it also exposes the rest of the community to danger.

Illegal electric connections lead to unplanned outages as the network overloads and trips because it may be carrying more users than the designed number, resulting in production downtime, weak economic growth and job creation, appliance damages, and whole lot of inconveniences to legitimate and paying customers as well. Moreover, those who connect illegally tends to be wasteful in their use of the power because they are not paying for it.

Advanced technologies to deal with power theft

Measures so far taken by Ghana to deal with power theft have included; appealing to the public to report any act of electricity theft, education of the public about the consequences of electricity theft, embarking on monitoring and inspection exercises with Police involvement on some occasions, prosecution of offenders, embarking on customer incentive campaigns, the installation of pre-paid meters, and to some extent the introduction of smart meters.

These initiatives have largely failed to deliver a more sustainable solution, as most have been quite reactionary than forward-looking. The pre-paid metering system have largely ensured the collection of revenue. But the smart meters have proven to take bite out of theft cases, and this is where the cure is found to exist.

Smart meters (without large computers and complex expensive algorithms) automatically send their readings to the power distribution entity, with the need for a technician to take readings eliminated. Beyond removing the human intervention, utilities have the advantage of examining new approaches to identify theft cases using real-time data through smart metering and advanced grid sensors, to appreciate clearer the losses on their systems.

This can be achieved through analytics; which encompasses transaction systems (like billing and customer service), data-warehousing system (for information on consumption and payment etc.), and a reporting system. By reviewing past data of a customer, utilities can calculate the approximate consumption and structure an acceptance limits of daily consumption in the future. From the inference that power consume by customers are repeated given a time frame, theft can be established when the real-time data is noted to irregularly exceeds the anticipated and acceptance limits for a particular period. Aside the data on a particular customer, the analytical model integrates consumption pattern of a community, weather patterns and many other parameters to enhance the degree of accuracy.

Electricity will continue to remain one of the key determinants of socio-economic transformation of any nation, playing a vital role within the residential, commercial, transportation, and industrial sectors of the economy. Hence beyond technology that monitor and detect strange activities from remote locations, combating electricity theft require determination on the part the policy makers and utilities to curb electricity theft in Ghana.

The author is the Executive Director of the Institute for Energy Security (IES). He has over 22 years of experience in the technical and management areas of oil and gas management, banking and finance, and mechanical engineering; working in both the gold mining and oil sector. He is currently working as an oil trader, consultant, and policy analyst in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media.