Case Study of Non-ERRA Countries:

India, Brasil and Republic of South Africa

Tevfik Okan SAYGILI – Energy Expert,

Natural Gas Market Department

Energy Market Regulatory Authority

(EMRA), Turkey

ERRA Customers and Retail Markets Working Group Meeting

06-07.06.2016 Budapest

Illegal Consumption 1

• Illegal consumption can be categorized in two groups;

• Deception (cheat) :– includes interference to the meter – Consumption is

lowered.

• Payment Issues :– Illegal consumption by Payment issues has also

branches according to the interference to the grid.

Illegal Consumption 2

• Simplest method is the hook method. Hook is placed to the grid and connection can be made.

• By-passing meter, meter conductor switching etc. are moderate methods.

• Electronic mechanisms that can intervene at high consumptions, remote control systems, direct connections to medium and high voltage etc. are advanced methods.

Illegal Consumption 3

• In less electrified areas and countries with not modern grid, simplest method is preferred.

• Advanced methods are used in countries that have lower fines and control. Also most income loss occurs in these countries.

• Also average illegal consumption rate of the world is around 8-10 percent.

India – General Information

• Capital New Delhi

• Area of 3.287.590 km2

• Population ~1.4 Billion

India - Electricity

• Consumption in 2014: 1.023 TWh

• Loss in 2014: 236 TWh

• Installed Capacity: 255.000 MW (~60% Coal)

• Average Loss : More than 20%

Some states has 47% average

• ~25% of population has no electricity.

• Electricity Distribution: 41 State Owned,

17 private Company

Total:58 Dist. Company

India

• Has a problem about illegal consumption rate.

• Has DSO’s working on lowering illegal consumption with successful projects.

• Achievements on customer detection, registry, field applications, lowering field resistance and legal legislations.

• As a result - has lowered illegal consumption rate.

India

• At the beginning 2000’s, illegal consumption rate was between 25-30 percent. But after implementations, it has been lowered to 21 percent. (Still working on this case)

• Because of the difficulties of liberalization process, franchising model is preferred. Government has the ownership, but hands over the management temporarily.

India – Loss Definitions

• Transmission and distribution losses include technical loss and metering losses.

• Also there occurs billing losses and they usuallyhappen due to:– Mistakes made in billing center

– Wrong/faulty data in system

• Also there is a commercial loss – difference btw. billing and collecting.

India – Loss Definitions 2

• All losses above are called “total technical and commercial losses”

• Losses in collection side are included in “aggregated loss calculation method” of Indiaand are not an internal issue of distribution company only, also an issue of transmission company and government.

India – Illegal Consumption

• Healing rate in local areas is high. (in developed regions loss/illegal consumption rate is less than local areas)

• Electricity Grid/Network in India is primitive and subscription conditions for customers are not easy.

• Just subscription and installing meter can prevent illegal consumption. (customers are afraid of using advanced methods.)

• In some districts, subscription rate is risen from 0% to 99,8%. So struggle is on subscription processes.

• As social structure, there are poor people that afraid of legislations. So heavy sanctions that put in action by government is the most effective way on lowering illegal consumption.

India –Photos fromNew Delhi

India – Photos Mumbai

• Underdeveloped and developed city side by side

India – Illegal Consumption

• So in India, fight against losses and illegal consumption consists of 3 parts that are supported by 4th part: Legislations.

1. Direct precautions

2. Indirect precautions

3. Investments

4. Legislations

India – Illegal Consumption

1. Direct precautions:

-Meter is installed in a covered and closed box.

-Covered line between

power pole and houses.

-Isolated cables in

distribution and transmission

-Smart meter installment

for customers with high

consumption

Isolated cable

India – Illegal Consumption

2. Indirect precautions:

– Effective control mechanism and high fines.

– Social projects of franchise companies.

India – Illegal Consumption

3. Investments:

– Meters are installed at a place that can be seen easily.

– Periodic reading and control of meters.

– Control with police supervision on suspicious cases

– Very strict and frequent controls with high fines in first 2 years

India – Illegal Consumption

4. Legislation support:

– Deterrent electricity law – illegal consumption is a felony

– Security support on field control

India – Illegal Consumption Results 1

• Fight against illegal consumption is achieved after law is implemented.

• With law, illegal consumption types, fines and penalties are defined.

• Poor people are afraid of legal regulation, legislations, and fines. So just installing meters were enough for them to stop illegal consumption.

• Police support for resistance against field controls was effective. (500 police is appointed in New Delhi for distribution companies)

India – Illegal Consumption Results 2• Fines are very heavy for economically disadvantaged

people. Since they cannot afford fines, they obey rules.

• In first years of fight against illegal consumption, power cut method is used in Biwandhi district, which has around 70% loss rate. Max 6 hour of power is supplied.

• “Shaming” method is used. For illegal consumption, differently colored (mostly red) bills are used.

• All these achievements are accomplished in a very long-term, for example, «the most successful company of Asia reward» winner Tata Power Delhi Distribution Limited (TPDDL) has decreased the illegal consumption rate from 53% to 11%. (But duration is also important. This decrease happened in 13 years.

Brazil - General

• Capital : Brasilia

• Area of 8.515.767 km2

• Population ~200 Million

Brazil - Electricity

• Consumption: 2.527 TWh

• Loss in 2014: 380 TWh

• Installed Capacity: 132.436 MW (~67% Hydro)

• Average Loss : 15 - 16%

Northern area has higher loss

• Electricity Distribution: 17 State Owned,

47 private CompanyTotal: 64 Dist. Company

• ~72 Million distribution system customer

• 85% residential customer

Brazil – Electricity DSO’s

Brazil – Electricity Losses

Technical and commercial losses of Brazil annually. (source: ABRADEE and PWC)

Brazil

Before revisions of network.

Brazil

• Has a problem of illegal consumption. Some districts has a serious illegal consumption rate.

• Has some DSO’s working on lowering illegal consumption with successful projects.

• Has lowered illegal consumption rate.

• Has experience on field applications with resistive customers and has high collection rate

BrazilFavela

Brazil

• At regions called “Favela”, distribution system is implemented after security is provided by governmental forces.

• Also, government has given permission to the distribution companies for loss and illegal consumption preventive activities in specific areas.

• For areas that are not permitted by government, distribution companies are not responsible for losses.

Brazil

• Incentives are given to DSO’s for lowering losses and energy efficiency.

• There is a minimum consumption fee for customers.

• There are social indices for education, accessibility to water, availability of toilets etc. These indices are used for calculation of applicable loss rate.

• The expected annual rate of improvement is limited.

Brazil – Illegal Consumption

• Also in Brazil, struggle against losses and illegal consumption consists of 3 parts that are supported by 4th part: Legislations

1. Direct precautions

2. Indirect precautions

3. Investments

4. Legislations

Brazil – Illegal Consumption 1

1. Direct precautions:

-Meter is installed in a covered and closed box.

-Covered line between power pole and houses.

-Smart meter installment for customers with high

Consumption

- Illegal consumption analysis and tracing program support.

- Isolated cables

Brazil – Illegal Consumption 2

2. Indirect precautions:

– High fines and penalties from power cut toimprisonment.

– Social projects on compromising and agreement forcustomers who are not afraid of penalties.

– Continuous education via media.

– Subscription proposals instead of power cut.

Brazil – Illegal Consumption 3

3. Investments:

– Meters are installed outside and can be seen easily.

– Periodic reading and control of meters.

– Installed local offices and Control with local authorities. (If necessary, police supervision is applied)

– Information Technologies support based on billing andmetering data.

Brazil – Illegal Consumption 4

4. Legislation support:

– Security support on field control

– Strict control ability

– Illegal consumption is a crime with high penaltiesand fines

– Issue is handled publicly and has a public support

Brazil – Illegal Consumption Results 1

• In Brazil legal support is important.

• Moreover it is considered unfair to talk about illegal consumption for people who has no access to wateror toilet.

• So in Brazil 1 % of annual turnover of consumptionbills are used for social responsibility projects andenergy efficiency projects.

• As a social responsibility and efficiency project, oneDSO (AES Eletropaulo) has changed old typerefrigerators with low consumption ones and gaveenergy saver bulbs as giveaway.

Brazil – Illegal Consumption Results 2

• To fight against economical terms, gradual tariffmethod is implemented. With higherconsumption, tariff also gets higher.

• Minimum consumption fee for customersaround $1,5 up to 30 kWh.

• In some local areas, local offices are installedand weekly billing period is used.

• For cultural infrastructure, shaming method is also used.

Brazil – Illegal Consumption Results 3

• Regulatory authority of Brazil (ANEEL) is workingon social indices for different areas.

• These social indices include education, ability topay, unemployment rate, accessibility to water, availability of toilets, crime rate etc.

• These indices are used for calculation of applicableloss rate (Ex: Rio De Janeiro is 5th in loss rate, but with indices, due to crime rate in favela area, becomes 3rd in applicable loss rate)

Brazil – Illegal Consumption Results 4

• For fighting against losses and illegal consumption, priority is the total energy loss.

• So in Brazil, to have efficiency on time and labor, control is made with information technologies firstand then control teams are directed. (withpossibility calculations)

• DSO’s have loss goals and they get extra tariffaccording to these goals.

Brazil – Illegal Consumption Results 5

• But results are not perfect for Brazil.

• For a company, after spending ~65 million USD in a year for just losses, only 2,4 % rate can be decreased with this much expenditure.

• So for DSO’s annually 1 % decrease in loses can be considered as a success.

Republic of South Africa – General Information

• Capitals: Cape Town (legislative)

Pretoria (executive)

Bloemfontein (judiciary)

• Area of 1.219.080 km2

• Population ~54 Million

Republic of South Africa - Electricity

• Consumption in 2014: 291 TWh

• Loss in 2014: 26 TWh

• Installed Capacity: 46.000 MW (~92,5% Coal)

• Average Loss : More than 8%

• ~12% of population has no electricity.

• Electricity Distribution: 1 State Owned,

157 Municipality Company

Total:158 Dist. Company

Republic of South Africa

• Has a problem about cable and equipment theft.

• Law is implemented.

• Awareness is improved among people. (Publicsecurity issue)

• As a result of high technology methods, positiveresults have been met.

Republic of South Africa

• Field teams are formed for fighting againstcopper theft.

• Media support (300 Million USD is spent forpublic advertisement in 12 months.)

• Support from an England Security Company.

• Governmental support.

Republic of South Africa

• Support frompresident.

Result:

• In 12 months 200 thieves have beencaught.

• Illegal consumptionis also a theft.

Overall Results• According to the most studies and literature

– Powerful legal legislations

– Security support in field

– Understanding inequalities and varieties in field

– Public support / public awareness

– Governmental support

– Field controls and grid configuration

– Advanced information technologies

are needed for successful applications and control of illegal consumption.

Thank you for your attention

For further information:

Tevfik Okan SAYGILI

tsaygili@epdk.org.tr

www.emra.org.tr / www.epdk.org.tr