CCOE to review ADB-funded project

ISLAMABAD:

The Cabinet Committee on Energy (CCOE) will take up for consideration the Asian Development Bank (ADB)-funded Automated Electricity Metering Infrastructure (AMI) project, though Pakistan has paid millions of dollars for delay in implementation of the scheme, which has drawn conflicting views from policymakers.

The CCOE will meet on September 13 (Monday) where it will review the metering project for implementation as well as discuss other issues.

The government has paid $2.2 million in commitment charges to the ADB, but it has not yet got the loan of $500 million for the first phase. The project has been delayed by several years.

The project came to a halt in the wake of emerging controversies and a seemingly irregular bidding process conducted by the Islamabad Electric Supply Company (Iesco), where a particular bidder was allegedly favoured and only one financial bid was opened, stifling competition.

However, experts point out that the delay in the project has been a blessing in disguise as the technology has moved on from the one for which a feasibility study was undertaken more than five years ago.

With the advent of 5G technology and its imminent launch in the country, this expensive project based on outdated technology cannot be considered at this stage of rapid technology convergence between AMI and telecom networks, they say.

In the emerging environment, the prepaid automated meters need to be actively considered to improve cash flow and control the burgeoning circular debt, particularly in high loss-making distribution companies (DISCOs), they say.

According to sources, Special Assistant to Prime Minister on Power Tabish Gauhar has pointed out similar things in the project structure.

While the ADB funding for AMI programmes should be welcome, the design of the project needs to be amended significantly while keeping in view the current technology.

Gauhar has said that advanced electricity meters need to be installed first in areas covered by the loss-making DISCOs rather than in the jurisdictions of most efficient companies like Iesco and Lahore Electricity Supply Company (Lesco) to ensure a reasonable and productive return on investment.

He has also highlighted the high cost and has called for connecting meters to the transformers/ sub-station nodes in phase one rather than connecting them to households.

At the same time, the technology advancement needs to be taken into account as utilising the 5G network for AMI deployment will not only reduce the price and lead to a much lower cost of ownership, but will also enable much faster and recurrent meter readings, which will be taken automatically and analysed through artificial intelligence (AI)-based software.

Industry experts are of the view that the project should be revamped completely from the geographical, technological, metering nodes (types) and commercial points of view as 5G and AI/Internet of Things (IoT) have disrupted the AMI technology.

It will help utilise the ADB funding in a prudent and cost-efficient manner where the loss-making DISCOs are fully covered through transformer metering in the first phase, and communication/ backend is optimised through 5G/AI/IoT technology, which is widely available with leading vendors.

The system can then be expanded to all DISCOs (through additional co-funding from the World Bank, CPEC, Asian Infrastructure Investment Bank, etc) in order to create a holistic value for the money spent as the ADB loan will have to be paid back and as such should only be utilised by DISCOs if a return on such a large investment is justified.

The revised structure, implementation methodology and specifications can be arrived at within six months and an open tendering process for the four highest loss-making DISCOs can then be completed in 2022.

The phase-1 deployment achieved in the second half of 2022 and 2023 will form an enduring base for future productive and sustainable investments in AMI and core allied technologies to achieve meaningful gains.

Experts say the Ministry of Energy, DISCOs, Nepra and other relevant stakeholders should deliberate on the proven next-generation technologies that have much more computing power and flexibility, including the pre-paid automated metering system for high loss-making DISCOs.

This can allow several applications that can create more value for utilities and customers alike.

The latest generation of smart meters and 5G/AI/IoT-based data gathering will be vital as Pakistan moves towards the Competitive Trading Bilateral Contract Market (CTBCM).

Experts say this can allow customers to get much better data about their energy use and allow utilities to fine-tune efficiency programme offerings, rate designs and other personalised approaches to energy management.

Oil refinery policy

The CCOE is also likely to approve 10% protection for the existing refineries, which are going to implement plant upgrade projects.

Earlier, the cabinet body had made some objections over the upfront tariff, deemed duty collection and its use, and the mechanism of incremental revenue. CCOE Chairman Asad Umar particularly questioned the upfront tariff proposed for the refineries in the new policy.

The Petroleum Division has addressed the concerns in a response submitted to the cabinet body.

Published in The Express Tribune, September 12^th, 2021.

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