ArticlePDF Available

An Assessment of South Africa's Prepaid Electricity Experiment, Lessons Learned and Their Policy Implications for Developing Countries

Authors:
  • University of Zululand, KwaDlangezwa, South Africa

Abstract and Figures

This study reviews the economics, logistics, and technology underlying the South African experiment of prepaid electricity. Although this experiment has resulted into benefiting large masses of small and dispersed consumers, it has also generated a set of new problems that could not be visualized at the inception of the experiment. The success of this program can be largely attributed to a number of factors, including a good marketing campaign, innovative tariff schedules, better planning and management, and so on. Lessons learned from this experiment are useful for policy-making purposes in other developing countries of Africa and Asia.
Content may be subject to copyright.
Energy Policy 31 (2003) 911–927
An assessment of South African prepaid electricity experiment,
lessons learned, and their policy implications for developing countries
D.D. Tewari
a,
*, Tushaar Shah
b
a
Division of Economics, School of Economics and Management, University of Natal, Durban, King George Vth Ave, Durban, 4001, South Africa
b
Regional Office of International Water Management Institute, Anand, India
Abstract
This study reviews the economics, logistics, and technology underlying the South African experiment of prepaid electricity.
Although this experiment has resulted into benefiting large masses of small and dispersed consumers, it has also generated a set of
new problems that could not be visualized at the inception of the experiment. The success of this program can be largely attributed
to a number of factors, including a good marketing campaign, innovative tariff schedules, better planning and management, and so
on. Lessons learned from this experiment are useful for policy-making purposes in other developing countries of Africa and Asia.
r2002 Elsevier Science Ltd. All rights reserved.
Keywords: Prepaid electricity; Policy; Technology; Tariff; Cost
1. Introduction and objectives
The usual way to pay for electricity is that it is
metered and billed to the electricity consumer. The costs
of metering, billing, and collecting dues becomes huge
when electricity is to be supplied to large numbers of
tiny and dispersed consumers. High electricity costs to
consumers provides them with incentive to pilfer
electricity or to fudge meter readings. In some countries,
for example in India, it is alleged that a large part of
(30–35%) transmission and distribution loss is due to
pilferage alone. To counter this problem, many State
Electricity Boards (SEBs) in India switched from
metered to flat tariff regime in the 1970s. However, this
rendered the SEBs hopelessly less viable. The re-
introduction of metering has invited much opposition,
with host of other problems related to it. One solution to
it is to go for prepaid electricity. In this context, the
South African experiment with promoting the use of
prepaid electricity cards by Eskom (organization re-
sponsible for producing and distributing electricity in
South Africa) is notable and may offer solutions to
many developing countries which face similar problems
like India. The South African experiment is now roughly
12 years old and its assessment can provide useful
insights to policy makers in the power sector in many
developing countries of Asia and Africa.
The major objective of this study is to understand the
economics, logistics, and technology underlying the
South African Experiment of prepaid electricity card
system. The study makes an assessment of the experi-
ment in resolving the problems of viable power supply
to small, dispersed consumers and discusses its relevance
for the developing countires. More specifically, the study
is aimed at answering the following questions in
particular:
(1) What factors motivated Eskom’s experiment with
prepaid electricity card system?
(2) How does the technology work in the field
condition?
(3) What is the economics of the prepaid electricity
and what are other possible advantages and
disadvantages of the prepaid electricity?
(4) How good or poor has been the acceptance of the
technology and whether it has done well in
particular market segments and not in others? If
so, why?
(5) What has been the consumer’s assessment in
different market segments and how do they view
this technology?
(6) What has been the Eskom’s assessment of the
impact so far and has it been beneficial to both
Eskom and Consumers?
*Corresponding author.
E-mail address: tewari@nu.ac.za (D.D. Tewari).
0301-4215/03/$ - see front matter r2002 Elsevier Science Ltd. All rights reserved.
PII: S 0301-4215(02)00227-6
(7) Is there any indication of a stoppage of the
pilferage of power, expanding the reach of elec-
tricity to far-flung areas, reducing the metering and
collection cost, among others?
(8) Has there been a need for an aggressive marketing
of prepaid electricity, initially through subsidies to
get consumers to switch to it?
(9) What lessons from the South African experience
should be kept in mind while planning such
introduction of technology in the developing
countries?
(10) What might be the prospects, problems and
advantages of introducing prepaid electricity tech-
nology in power distribution in the developing
countries?
The motivation for prepaid electricity system and a
brief history of development of prepayment system in
South Africa, are discussed in Section 2 (objective 1).
The principles and functions of prepayment technology
are detailed in Section 3 (objective 2). The economics of
prepaid electricity and other cost-related considerations
are discussed in Section 4; followed by the various
advantages and disadvantages to Eskom and to
consumers in section 5 (objective 3). Factors affecting
the success of and impediment to the expansion of
prepaid electricity are assessed in section 6 (objectives
4–8). The lessons learned from this experiment are
summarized in section 7 (objective 9). Conclusions and
prospects for promoting prepaid electricity in develop-
ing countries are discussed in section 8 (objective 10).
2. Eskom’s prepaid electricity experiment
1
Prior to 1988 Eskom supplied electricity mainly to
large customers like mines and municipalities. At that
time, although Eskom was one of the largest electricity
generators in the world, it only had 120,000 customers
and all of them were on billed accounts. In 1988, Eskom
had a change of strategy, that is, to supply electricity
directly to the large masses of domestic customers who
did not have access to electricity at that time. Most of
these customers were in rural areas. Then came the
revolutionary change: ‘‘Electricity for All.’’ The vision
of Eskom was broadened and positioned in the context
of African Renaissance. Its major objective was
redefined as to vigorously promote economic growth
in Southern Africa and, at the same time, support social
and economic objectives in energy and selected markets.
This visionary change in 1988 brought several
problems to the forefront, which can be basically
divided into three categories. (1) many small areas had
to be supported with the smallest amount of Eskom
personnel. The standard billed accounts system required
too much day-to-day management to process accounts
and to maintain connections and disconnections. This
means that the Eskom had to operate with a low level of
management and maintenance. (2) many of the areas,
where potential customers lived, had no infrastructure
and economy was merely subsistence one. People did
not have permanent jobs or bank accounts. There were
no fixed addresses to which billed accounts could be
posted. Furthermore, there were no postal services in
these areas. But, all these are required for a billing to
operate effectively. Many customers were illiterate and
did not understand the bills that arrived only after the
electricity has been consumed. Many did not have
budget to pay for the fixed charges—a component of the
billed account. (3) even many resented at the idea of
paying a fixed charge—an expense that they believed
they did not incur. To address these and other related
problems, Eskom initiated the development of the basic
prepaid system, which is still in use and has been
growing over the years.
2.1. A brief review of development of prepayment system
The first inquiry for electricity dispensers (EDs) or
prepayment meters in Eskom was issued in 1989. This
inquiry was based on short specification produced by
Eskom. Contracts were issued to two manufacturers
(AEG (then Schlumberger) and Conlog) based on this
specification for 10,000 meters. An earth leakage protec-
tion device was included with the meter and dispensers
were only required to perform Amp-hour measurement
instead of KWh (KiloWatt hours).
The specification document was upgraded and made
more comprehensive in 1990 (it included NRS009, Part
1, 2, and 3). This time the earth leakage protection
device was removed from the ED. The specification
based on NRS009 were contracted out to three
manufacturers (AEG, Conlog, and EML (then Spes-
com); some 30,000 m were ordered, 10,000 m per
manufacturer. The project was renamed to the ‘‘Eskom
Electrification Project’’. Lightning related failures were
also becoming apparent during this time. An exhaustive
investigation established that the international require-
ments as specified in NRS009 document were not
stringent enough for the South African conditions. A
lightning arrestor was developed in conjunction with the
Council of Scientific and Industrial Research (CSIR)
and was installed in the EDs; this effectively addressed
the lightning problems.
In 1990, The South African Bureau of Standards
(SABs) provided a completely new specification of
prepayment meters and replaced the old one. However,
it did take into account the NRS009 while creating the
1
A large part of the information gathered for this study was
collected by personal communication with Jimmy O’Kennedy and
from a website created by him (O’Kennedy, 2001).
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927912
new specification. And, the total numbers of prepay-
ment meters to be manufactured was increased to
200,000 per annum in 1993. It was further planned to
be increased to 300,000 meters per annum by the year
2000.
Having standardized the specification of prepayment
meters by the SAB, Eskom identified the need for
standardizing the vending system to be able to sell
electricity from 1 meter to other, which were manufac-
tured by different manufacturers. Eskom initiated a
program to standardize the EDs and the vending
process in 1993. An inquiry was issued for the vending
system based on a draft specification and for EDs to
accompany it. Later, the development of the new
common vending system (CVS) was started jointly by
Eskom in conjunction with Conlog–a meter manufac-
turing company.
The development of CVS was followed by the
development of ‘‘Standard Transfer Specification’’
(STS). Both Conlog (a meter manufacturing company)
and Eskom developed the STS. The STS was developed
to enable the new vending system to transfer credit to all
types of meters; this warranted developing a standard
transfer medium and protocol to the meters. All EDs
produced from the beginning of 1994 implemented the
STS and allowed the CVS to produce tokens for any
manufacturer’s EDs. The first functional specification
(MC 171 rev 2.10) was released at the same time and has
been implemented in all the STS based EDs since 1994.
In 1994, the modified specification for lightning arrest-
ors (TRMSCAAP2 rev 2) that could withstand 400 V
was also released.
In 1996, to achieve a further reduction in the cost of
electrification, a 2.5 A Circuit Breaker Unit (CBU) was
designed (MC 196 rev 1.01); a CBU is a device equipped
with earth leakage and overload protection, designed to
supply up to 2.5 A and to be managed on a flat rate
tariff. Operational cost studies were done in late 1997
and Eskom came to the conclusion that prepayment is
still cost effective or cheaper than the CBU flat rate
system. The decision was then made to implement a
prepayment 2.5 A prepayment system with ECUs
instead CBU.
The CVS and STS meters formed the basis of the
existing prepayment system of Eskom. The CVS and
STS have been further improved and are adopted as
standard by other electricity utilities, such as Durban
Metro, in South Africa. South Africa is now seen as
world leader in prepayment technology and many other
countries have adopted the South African Standards.
3. The prepayment technology
How prepayment technology works is explored briefly
in this section. The technology is rather simple but it
requires an understanding of functioning of various
components that produce the final delivery of service.
The basic principles of the prepayment system are
discussed first, followed by the description of the
functioning of the prepayment technology. Two im-
portant technologies—STS and CVS—which are very
essential for functioning of prepayment technology, are
also discussed in this section.
3.1. Principles of operation of prepayment
Two important elements of operation of prepayment
system are token technology and systems approach to
management (Bezuidenhoudt, 2000a, b). The prepay-
ment meters or EDs are installed at the customer’s
residence or any other point of sale of electricity. A
prepayment meter is designed to supply up to 60 A
current of electricity. EDs plug into a standard passive
base or socket and the output is connected to a
distribution board. The customer then has to buy tokens
from Eskom. These tokens are then inserted into the
EDs. If token is valid, the ED accepts the token and
adds the credit (amount of units of electricity encrypted
on the token, kWh) to the current credit in the ED. The
customer then can use electricity until the entire credit is
exhausted and at that point of time the ED interrupts
the electric supply. A token can only be entered once
and is issued for use in a unique ED, that is, customer
buys a token for his/her specific ED. However, token
can be entered at any time to prevent interruption.
Eskom uses two types of token technologies for EDs.
Both types are of a use-once-and-dispose nature. The
customers cannot reuse the tokens and once entered into
the ED the credits are recorded in. Two types of tokens
are used: (1) disposable paper cards with a magnetic
stripe (conforming to 1S0780 and 7811 size and strip
location), and (2) numeric token which is a strip of
paper with a 16 or 20 digit number which is entered into
the ED, via a keypad on the face of ED, by the customer.
The choice of token depends upon the types of
meters—magnetic card and numeric keypad. The
magnetic card meters accept the magnetic token while
the numeric tokens are acceptable to numeric or keypad
meters. The numeric token is unique to South African
EDs in that it need not be transported physically and
thus making them ideal for sale over the telephone.
Tokens for prepayment can be categorized as being
‘‘one-way’’ or ‘‘two-way’’. The one-way tokens transfer
credit and control information from the sale point to the
meter; the tokens are usually discarded after use. The
major drawback with one-way tokens is that the Eskom
cannot determine how much electricity has been
disbursed through the prepayment Electrical Dispen-
sers. The Eskom personnel have to visit the customer’s
premises to determine the true consumption. The two-
way tokens require that customer to return the token to
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 913
the point of sale for the next purchase. This allows the
Eskom personnel reading the data stored by the meter
from the returned token. The statistical processing is
done by the data management system.
In the case of the conventional meter (rotating disk
Ferraris meters), the functions of technical support,
maintenance and revenue collection and management
can be to a large extent be operated autonomously. In
contrast, the prepayment metering requires an inte-
grated system approach. It requires (1) an effective and
available token (electricity) sales points, and (2) proper
sales management systems (which is made up of both
manual person based as well as information technology
equipment based). For example, producing bills out two
days later does not deprive customers of electricity,
whereas inoperative prepayment sales point for two
days will cause significant customer inconvenience. It is
therefore emphasized that when prepayment electricity
is to be introduced, we must give consideration to the
whole system in its entirety, not just to the prepayment
meters alone.
3.2. Functioning of prepayment technology
As discussed above, the prepayment electricity is
based on systems approach and its revenue and
maintenance management is inextricably linked with
the operation of entire system. Eskom started the
development of basic prepayment system in 1993. This
system consisted of the following components: (1)
Prepayment meters or also called EDs; (2) Vending
machines where the customers can purchase electricity
credit, known as Credit Dispensing Units (CDUs); (3)
Data Concentrators (DCs) that manage the CDUs and
collect the transaction data from the CDUs; this is also
called the System Master Station SMSs (Fig. 1).
The EDs can be of two types: proprietary meter and
STS meter. Proprietary meters are the old meters which
were supplied to Eskom by companies like AEG, Ash,
Conlog, Plessey, and Spescom. The STS meters are the
new meters specified by the Eskom, which accept tokens
conforming the STS specification. Originally the EDs
were not built with protection devices to arrest lightning;
later these changes were made and such an ED is called
Electricity Control Unit (ECU).
2
The CDUs are nothing but a prepaid token vending
machine; these are of two types, proprietary and
common vending. The proprietary CDU vends only
proprietary tokens; on the other hand, the common
vending system CDU vends both STS and proprietary
tokens. Typically a vending machine is currently
installed for every 800–1000 customers.
3
The DCs or
data concentrators collect information from CDUs and
transfer it to mainframe computer.
In order to manage the prepaid electricity, the Eskom
has divided the entire geographical area of electricity
supply into Supply Group Codes (SGCs). Eskom buys
meters from suppliers pre-coded for a specific SGC or
on a default SGC and then codes the meter for the
specific SGC. This personalizes a meter for a specific
area and also adds a few additional items like specific
tariff index, etc. All this information is combined to
form a key for the meter and every token is encrypted
under such a key. If the key is wrong, the meter will not
accept the token. The whole encryption process is
defined by the STS standard. Every meter is also
shipped with a meter card with this same information.
The only use of the card is to make it easy to identify the
customer, otherwise the entire information will have to
be typed in to the vending machine (CDU) when
customer buys electricity, but now the customer can
just swipe the card to identify his meter details.
The vending machine or CDUs, which is nothing but
a PC that is close to customers, stores the hidden SGC
keys. This helps the machine to identify the exact
location of the customer. A customer who wants to buy
electricity presents his meter card to vendor, pays the
sum of money that he/she wants to spend. The vending
machine then produces a magnetic or keypad token for
the customer. The customer can take it home and enter
into his meter. The transaction data is then uploaded
from the vending machine to the SMS and mainframe
computer for statistical and data management purposes.
Each meter card contains the following information:
(1) supply group code, (2) key revision number, (3) tariff
index, (4) meter number. The moment the customer
swipes his/her meter card in the vending machine or
CDUs, it reads the information and then generates a
meter key taking into account the: (1) key revision
number, (2) associated vending key (which is invisible),
and (3) tariff index (Fig. 2). This meter key is also stored
Prepayment Meters
Or EDs
Vending Machines
Or CDUs
Data Concentrators or
DCs (System Master
Station, SMSs)
Fig. 1. Basic components of the prepayment system: a schematic diagram.
2
An ECU is a prepayment meter designed to supply up to 20 A
current. An ECU is an ED with earth leakage and over-current
protection built-in.
3
For some 3 million prepaid customers in South Africa, a minimum
of 3000–4000 vending machines are installed.
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927914
inside the ED. Thus, meter keys—one in CDU and
other in ED—can exchange tokens. Once a customer
pays money and gives his/her meter card to the vendor,
the vending machine generates a token, keeping into
account meter key and tariff rate. The credit token is
thus generated and fed to the ED (Fig. 2).
3.3. The development of CVS and STS
The development of the CVS and the STS are the two
pillars of prepayment technology and need to be
understood well. The CVS consists of various groups
of CDUs that are distributed at various points of sale
(POS) locations, with each CDU group concentrated by
a System Master Station (STS). The SMSs are in turn
concentrated by a Transaction Manager (TM) on
Eskom’s Mainframe Information System (MIS), as
depicted in Fig. 3.
In other words, CVS incorporates the network of
CDUs, SMSs, and the TM, all interfacing to the MIS.
The MIS consists of several subsystems which include:
(1) Customer Information System Data Base (CIS DB);
(2) Customer Management System (CMS); (3) General
Ledger (GL); (4) Nedisys-ED Tracking Ssytem (NED);
(5) Power Billing System (IPS). In brief, the CVS
provides for the vending of a STS token, which enables
the individual customer to use electricity. This enables
CDUs to vend STS tokens, which are compatible to
EDs that support the standard transfer algorithm
(STA). The CDU also has the capability to interface
to standard token translator (STT) to support a
proprietary token, using a proprietary algorithm. This
ensures the backward compatibility for proprietary EDs
that are already installed.
The implementation task of CDU and ED becomes
easier if the STS is understood well. During the early
years of prepayment electrification, the focus of
specification and standardization was on the ED, not
on the vending system and other infrastructure. This
produced a variety of vending systems which were
usually incompatible with each other. This incompat-
ibility led to the inability of vending system of one
manufacturer to vend to the ED of another. As a result,
a distributor has to purchase different vending systems
to support the sale of prepayment electricity. This
proved expensive and operationally inconvenient. To
overcome this problem, Eskom, being a major buyer of
EDs, initiated the process of standardization so that
prepayment token from a CDU, developed by one
manufacturer, Eskom being a major buyer of EDs
initiated the standardization so that prepayment tokens
produced from a CDU developed buy one manufacturer
could be used into an ED developed by another
manufacturer. This required development of standards,
which could ensure compatibility. It should be noted
that the STS is a standard for the electricity dispensing
industry, whereas the CVS is a system implemented
according to a set of standards which is STS.
The STS is thus a standard for the electricity
dispensing industry, which allows STS compatible
Customer data
Transaction data
Credit tokens
Mainframe computer
Network
connections
System Master
Stations (SMS's)
Credit Dispensing
Units (CDU's)
Prepayment
meters
Modern & floppy
data transfers
Tokens physically
transferred to meters
Geo
g
ra
p
hical area (Su
pp
l
y
Grou
p
) A Geo
g
ra
p
hical area (Su
pp
l
y
Grou
p
) B
Fig. 2. A schematic diagram showing functioning of Eskom prepayment system (source: http://www.eskom.za/electrification).
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 915
dispensing and vending equipment from different
manufactures to operate with one another. This benefits
consumer, distributor and agent, thereby promoting
competition, cost-efficiency, and convenience in the
industry. The STS is based upon a number of concepts;
most of these concepts are directly addressed in the STS,
but some being the subject of other specifications/
standards applicable to other areas such as the CVS, are
addressed elsewhere as well. To ensure compatibility,
the STS defines the following: (1) A set of management
and credit functions to be supported by an ED. (2) The
various data elements required by the CDU to support
the implementation of these management and credit
function. (3) The format of management and credit
token data corresponding to the management and credit
functions. (4) The cryptographic methods of encrypting
and decrypting the formatted token data so as to ensure
its authenticity and/or secrecy during transfer between
CDU and ED. (5) The cryptographic method of key
management in support of the encryption and decryp-
tion of token data. (6) The type of token technology that
can be input by EDs and output by CDUs; and (7) The
method of encoding token data for each type of token
technology.
4. Economics of prepaid electricity
The cost of electricity can affect the price that is to be
charged to the electricity consumers. The price to the
final consumer is thus made of several types of costs.
Eskom’s cost of electric supply can be explained by way
of the supply chain. This includes five types of costs: (1)
generation, (2) transmission, (3) distribution, (4) reticu-
lation, and (5) service. Generation involves the cost of
raw material and other input used in the production of
electricity in power station. Eskom has some 25 power
stations which generate approximately 97% of South
African electricity supply. From the power station
electricity is sent to all parts of the country. The
transmission network carries a very high voltage current
and only very large customers can be supplied directly
from the transmission network. Only 2% customers are
directly sold electricity from the transmission network.
The electricity is then further distributed through the
distribution network. The electrical power is trans-
formed to a lower voltage at distribution substations.
Some larger customers such as towns or factories
that are supplied directly from the distribution net-
work. From the distribution network the electricity
is then distributed to the customer’s property by means
of reticulation network, generally located in the
immediate area at a lower voltage. Most of Eskom’s
customers are supplied from reticulation network. At
the end of supply chain is the customer’s service
connection. This includes any lines or cable or metering
to connect the customer’s installation to Eskom’s
network. It can therefore be concluded that cost of
electricity to customers depends upon where one is in the
supply chain. The higher up the supply chain, the fewer
networks Eskom has to build to supply a customer
(Fig. 4).
Various types of costs that Eskom incurs can be
classified into three categories: (1) fixed costs which
primarily covers the materials and erection cost of
establishing all of Eskom’s equipment; this is generally
referred as to the capital cost, (2) operation, main-
tenance, and administration costs which refer to the
CDU
CDU
CDU
CDU
CDU
SMS
SMS
CMS
CVS
TM
PPS
IPS
NED
GL
CIS
DB
MIS
CDU - Credit Dispensing Unit
CVS - Common Vending System
SMS - System Master Station
TM - Transaction Manager
Data Transfer
Data Stora
g
e
CIS DB - Customer Information System Data Base
CMS - Customer Management System
GL - General Ledger
IPS - Power Billing System
MIS - Mainframe Information System
NED - Nedis
y
s - ED Trackin
g
S
y
stem
Fig. 3. A schematic overview of CVS (source: http://www.eskom.za/electrification).
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927916
costs incurred in ensuring that electricity supply is
maintained, and (3) raw material or variable cost which
includes cost of coal or water. In general, the pricing of
electricity by Eskom must cover all of the above costs so
as to remain economically viable enterprise in the
economy. The price set by Eskom is designed as far as
possible to meet the following objectives: (1) Pricing
must provide the means to recover adequate revenue. (2)
It should promote overall economic efficiency. (3) The
price charged should be fair, equitable, and transparent
to all customers and (4) Cost-effective tariffs should be
established.
The price of electricity is implemented through a tariff
package. A tariff package is made up of a tariff and
various other charges and conditions applicable to
electricity use. Different tariff packages are designed
and made available to customers with different condi-
tions and needs. For example, specific packages
for residential sector, both rural and urban customers,
are used by Eskom. In addition to tariff, Eskom
also levies various charges depending upon indivi-
dual circumstances such as connection fee, conversion
fee, capital charges, service charges, and so on. For
example, a connection fee is payable by the customer
towards the cost of new connection. A conversion
fee is payable when a customer converts supply or is
applied when there are changes such as meter
changes, changes in installation or when a supply point
is shifted.
The network capital costs are not recovered through
tariff but through additional capital charges over and
above tariff. Generally speaking, the capital charges are
of fixed nature and paid on monthly basis as a monthly
rental. This is paid irrespective of usage of electricity. It
is a contribution towards Eskom’s fixed costs and
escalates annually with Eskom’s price increases. Some-
times this is also known as basic charge. A part of the
capital charges is repaid towards the long-term use of
capital. In Eskom, this is a non-escalating monthly
capital repayment rate. It is a percentage per month of
the total capital cost which need to be repaid. In 2000,
this was set 15.5% annual discount rate and a
repayment period of 25 years or less. The capital rate
can change from 1 year to the other. In addition to
charges, Eskom also levies service charges such as
transfer fee (payable by a new customer when ownership
of a conventionally metered point of supply changes
hands), call out fee (payable when Eskom is called
out due to a supply interruption and fault is found
to be within the customer’s installation), special meter
reading fee (payable when a special meter reading is
done at the customer’s request), meter test fee (payable
when a meter test is requested by the customer) and
so on.
In brief, the two types of charges make up the tariff:
(1) basic charge, (2) energy charge. The basic charge is a
fixed charge payable every month, irrespective of electric
usage and contributes towards fixed cost of supplying
electricity. The energy charge covers the cost of
electricity and is levied per kilowatt-hour of energy
consumed; for example, 16.98 c/kWh. This is also called
‘‘rate’’ in colloquial language. The price equation can
thus be written as follows:
P¼aþbQ;
where, Pis the total price of electricity, athe basic
charge, bthe rate or energy charge rate and Qthe
amount of electricity consumed.
Eskom has a number of tariffs available to con-
sumers. These tariffs are usually set according to the size
of the supply, the type of supply, and whether the supply
is urban or rural.
Generation
Transmission
Distribution
Reticulation
Service
Fig. 4. A general overview of costing of electricity in South Africa.
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 917
4.1. Costs of prepaid electricity
Eskom tariffs are linked to all types of meters
installed. Irrespective of tariff, a consumer can choose
to go for prepayment or conventional meter. Eskom
follows three basic principles in this regard. Firstly,
Eskom does not encourage prepayment meters in an
area where vending sites are not situated close to the
location of customer demanding prepayment meters.
Even the conventional meters are not installed in the no-
go areas which are very remote and costs to Eskom is
very high. Secondly, current prepayment meters cannot
handle a supply size of no more than 65 kV A.
4
Thirdly,
prepayment vending system cannot handle fixed/basic
charges and variable energy (high block vs. low block)
rates. The fixed or basic charge has to be paid by normal
billing system.
In general, prepayment meters are available for
homelight, homepower, business-rate, and land-rate.
The standard supply size available for prepayment
supplies are:
*Single-phase: 16 kVA (2.5, 20, 60 A)
*Two-phase: 32 kV A or 64 k VA
*Three- phase: 25 kV A or 50 k VA (60 A or more).
Eskom requires a deposit prior to connection of
prepayment meters. Generally the deposit is equivalent
to the three consecutive months electricity bill which is
estimated by the authorities. However, deposits are not
required if prepayment meter is for homelight supplies.
Monthly rentals or basic charges towards repayments
of capital expenditures are required to be paid by all
prepayment-meter-owners; with the exception of the
home- light and business rate 4 (Table 1). It is important
to note that the prepayment meters cannot accommo-
date a tariff with both basic charge and energy rate,
hence a monthly account is received by the consumer for
the basic charge/monthly rental towards repayment of
net work cost. Eskom supplies various levels of current
under single, two, and three phase. Currently it
providers four types of electricity supplies.
Single phase 2.5 A and 20 A supply: This is provided
for customers with minimum electricity requirements
and comprises electricity control unit (ECU) and double
electricity plug outlet. This supply is only intended for
very low usage customers that normally have only lights,
radio, and television. It is not sufficient for cooking
purposes. The meter charge depends upon the size of
current. For 2.5 A supply, Eskom provides a free meter.
However, this is done only in pilot projects area. This is
the most commonly used electricity supply. It consists of
an ECU and a double plug outlet but with a current
limit of 20 A. It is intended to supply for lights, radio,
television, basic cooking, refrigeration and ironing needs
of domestic customers. Customers are required to pay
an upgrade or installation fee to receive 20 A supply.
For 20 A supply (both prepayment or conventional
meters) the meter fee is R150.
Two phase 60 A supply: The 60 A supply is provided
with an Electricity Dispenser (ED) and the consumer is
required to provide his own internal wiring or distribu-
tion. The customer has to pay the full installation cost.
This supply is typically used for consumers with hot
water heaters or other small business. For 60 A supply,
the meter (prepayment or conventional) charge is
Table 1
Basic energy charges for different types of prepaid electricity usage, South Africa
Tariff Electricity supply size Basic charge Energy charge
Business rate 1 Less than 25 kV A R120.80+VATt=R137.71 19.34 C+Vat=22.05 C/KWh
Business rate 2 Between 25 and 50kV A R151.75+VAT=R173.00 19.34 C+Vat=22.05 C/KWh
Business rate 3 Between 50 and 100kV A R209.78+VAT=R239.15 19.34 C+Vat=22.05 C/KWh
Business rate 4 Less than 25 kV A N/A 43.50 C+Vat=49.59 C/KWh
Land rate 1 16 kV A–80 A (1 phase) R226.13+VAT=R257.79 First 500 k Wh @38.12 C/kWh 34 C (incl.VAT)
32 kV A–80 A (2 phase) >500 kWh @ 22.05 C/kWh (incl. VAT)
25 kV A–40 A (3 phase)
Land rate 2 64 kV A–160 A (2 phase) R257.05+VAT= First 500kWh @38.12 C/kWh 34 C (incl.VAT)
50 kV A–80 A (3 phase) R293.04 >500 kWh @ 22.05 C/kWh (incl VAT)
Land rate 3 96 kV A–225 A (2 phase) R315.07+VAT= First 500kWh @38.12 C/kWh 34 C (incl VAT)
100 kV A–160 A (3 phase) R359.18 >500 kWh @ 22.05 C/kWh
Land rate 4 16 kV A–80 A (1 phase) R85.13+VAT=R 97.05 33.43 C+Vat=38.12 C/kWh
Home power R 41.53+Vat=47.34 22.58 C+Vat=25.74 C/kWh
Homelight 1 (2.5 and 20 A) N/A 33.12 C+Vat=37.76 C/kWh
Homelight 1 (60 A) N/A 37.25 C+Vat=42.47 C/kWh
Homelight 2 (20 A) (60 A) N/A 28.76 C+Vat=32.79 C/kWh
Homelight 2 (60 A) N/A 32.89 C+Vat=37.49 C/kWh
4
A charge per unit of kWh is called active energy charge. This may
be fixed rate or vary with the amount of electricity used, e.g., block rate
tariffs (different rates for peak, off-peak period usage).
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927918
R1000; this is the minimum cash amounts payable and
additional charges based on actual costs may be raised
as per current policy.
Three phase 60 A or more supply: This is provided with
three phase ED and intended for business that require
large supplies and are situated in areas that have prepaid
electricity. This is not a frequently used electricity as
businesses are generally supplied with billing meters on a
non-prepayment account. Eskom has set different tariff
rates for different categories of uses. At present, there
are four categories of consumers: (1) low usage
residential consumers, (2) medium-to-high usage resi-
dential consumers; (3) small business in urban areas; and
(4) farmers and rural businesses. The details of current
size and tariff stricture are given in Table 1.
4.1.1. Tariff for low usage residential customers
(homelight)
For low usage residential customers, Eskom supplies
the single phase (2.5, 20, 60 A current) electricity. Most
of these consumers are from low income and need only
homelight. The electricity meter is supplied free,
although normally a deposit equivalent to three
consecutive months’ electricity bill is payable. For
2.5 A current supply, Eskom has offered prepayment
meters without any charge but R150 and R1000 are
levied towards meter charge for 20 and 60 A current
supply. There are no basic charges to the consumers and
a single energy charge is levied, depending upon
the category of light (homelight 1 and 2) as shown in
Table 1.
4.1.2. Tariff for medium to high-usage residential
customers (homepower)
This is called homepower supply. It is suitable for
medium-to-high usage residential customers, churches,
schools, etc. Eskom requires a deposit equivalent to
three consecutive months’s electricity bills. The connec-
tion fees are levied and vary with the type of current
subscribed. For single phase supply, the meter charge
(conventional or prepayment) is R1000. For three phase
supply, the charge for prepayment meter is R2500 and
for conventional meter is R2100. These are minimum
costs amounts payable and additional charges based on
actual costs may be raised as per Eskom’s policy. This
category of customers are required to pay a monthly
charge of R47.34 per month for each point of delivery
whether electricity is consumed or not. A single energy
charge is of 25.74 C/kWh is charged (Table 1).
The breakeven point for homelight1 (60 A) and
homepower is 283 kWh/month, respectively. If electri-
city consumption is less than 283 kWh/month, then
Homelight1 (60 A) is cheaper than Homepower. If more
than 283 kWh/month is used, then Homepower is
cheaper than Homelight.
4.1.3. Tariff for small businesses in urban areas (business
rate)
This is intended for small businesses in urban areas. A
supply of greater than 100 kVA is not permitted. The
four business rates are available. Normally a deposit
equivalent to three consecutive months’ electricity bill is
required. The connection fees or meter charge depend
upon the type of current. For single phase supply, a
meter charge (prepayment and conventional) of R1000
is levied. For three phased supply, the charge for
prepayment meter is R2500 and for the conventional
meter is R2100. These are minimum cost estimates and
extra charge can be laid depending upon the actual
costs. Except business rate 4, all other electricity supplies
are required to pay a basic charge, as shown in Table 1.
And, a single energy charge of 22.05 C/kWh for business
rates 1, 2, 3 and 49.59 C/kWh for business rate 4 is levied
(Table 1). Business rate 1, 2, 3 are suitable for supplies
where consistently more than 500 kWh is used. The
basic charge is payable each month. The business rate 4
is suitable where consumption is consistently less than
500 kWh per month. Thus business rate 4 is cheaper if
the consumption is less than 500 kWh and others are
cheaper when consumption is more than 500 kWh/
month.
4.1.4. Tariff for farmers and rural businesses (land rate)
Under this tariff structure, fives types of tariff rates
are applicable. These are; Land rate 1, 2, 3, 4 and Land
Rate Dx. Land rate 1, 2, 3 are suitable for supplies
where consistently more than 1000 kWh per month
being consumed. The basic charge is payable per month.
Land rate 4 is suitable where electricity consumption is
less than 1000 kWh/month and here the supply size
cannot exceed 16 kVA. Land rate 4 is for domestic or
small supplies on farms. The basic charge is levied per
month. The Land Rate Dx is applicable to very low
usage single-phase supplies where the supply capacity is
limited to 10A. This is typically suited for small
telecommunication installations where electricity charge
is low enough not to warrant metering for billing
purposes. In this case, only a fixed charge of R279.78 per
month is payable.
In each case, a deposit equivalent to three consecutive
months’s electricity bill is demanded. The charges for
meters vary. For single phase supply (conventional or
prepayment meters), the meter charge is R1300. The
charge for conventional meter for three phase supply is
R2600 and for prepayment meter, R2950. The prepay-
ment meter is thus a bit more costly. In many rural
areas, Eskom has to construct line to provide electricity
to customers, this entails extra cost burden on con-
sumers in terms of extra monthly rentals. The cost
estimates for laying the line are as follows: three phase
line R54,545/km, single phase line R30,000/km.
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 919
4.2. Cost estimates and scale economies
Two sets of population were surveyed to estimate the
cost of prepaid electricity to household to individual
household: (1) Some 30 households in Kwandengezi and
Shongweni areas, an area outside Durban city in
Kwazulu Natal ; and, (2) some 20 households in
Witbank in Mpumalanga province.The average costs
for meter or connection fee varies significantly from one
area to another. For example, the average cost of meter
in Kwadengzi area was R150 per household while R500
per household in witbank area. The average fee for
South Africa is about US$15. This is a subsidized price.
The full cost price can be up to $60 or more. In Witbank
area, we found that some households were not charged
at all because they were fully subsidized. The average
prepaid electricity consumption is R80 to R150 per
household in Kwadengzi–Shongweni and Witbank
areas. The electricity charge comes to about 36 C/kWh.
In the surveyed samples in Witbank area, some 10%
households were using prepaid electricity for small
businesses and pump irrigation. The monthly expendi-
ture on electricity in these households ranged from
R1000 to R2000 per month. For business use, in the
Witbank area, the users accepted that economies of scale
are realized. As the consumption of electricity increases,
the cost per unit of electricity declines. Inquiries with
managers revealed that it all depends upon the tariff
structure. Mostly for small consumption, scale econo-
mies are a rare thing.
Cost studies in Eskom show large variations in cost of
service to customer per month. This needs to be reduced
while maintaining an acceptable level of service. The
appointment of agents for Eskom has been found to
reduce cost of service; this is due to sharing of labor and
infrastructure costs. This method of cost reduction has
proved successful where implemented. In future, costs
could be reduced by introducing automation on-line
metering. The costs of vending infrastructure can be
reduced through the sharing of electronic infrastructures
with other bodies such as banks and retails chains who
also had to install electronic fund infrastructures.
5. Advantages and disadvantages of prepaid electricity to
different stakeholders
Prepaid electricity has benefited both the supplier
(Eskom) and the consumer (customers). These advan-
tages accrue in various forms and contribute to efficient
functioning of the electricity production, distribution,
and revenue generation function. There are numerous
advantages to Eskom from prepaid cards. Some of these
include the following: (1) Improving customer’s service
as it eliminates billing delay and no account posting or
additional billing system required. (2) Prepayment is up-
front that improves the cash flow of the business. (3)
Cost of meter-reading is cut as no meter readers are
required. (4) It can be also used to recover bad debts. In
Eastern Cape, every time when a customer buys a
prepaid card, pays 15% towards redemption of old debt.
(5) It eliminates the disconnection and reconnection fees
and administrative hassles associated with these pro-
blems. (6) It is easy to install prepayment meters than
conventional one. It costs less to Eskom and to
customers as well. (7) It is easy to control fraud with
the help of prepayment meters. (8) There is no need to
hold customer’s keys as is required under conventional
metering. (9) Eskom does not need to access the
customer’s property and thus life risk to its employees
is reduced. This is particularly important in South
Africa as being a very crime ridden society and where
big income divide between black and white people exists.
(10) It also eliminates the danger of inaccurate meter
reading and thus Eskom has no more such complaints.
(11) The prepayment electricity system finally improves
the revenue management system of Eskom.
The prepaid system also has advantages to consu-
mers, which include the following: (1) The consumer has
a better understanding of how much energy is being
consumed. This enables one to cut the unnecessary use
and economy turning off lights, geyser, and other
electricity-based instruments. (2) Control of energy use
and budget management goes hand in hand. The more
one economizes on energy use, the better one manages
one’s budget. (3) The consumer can buy tokens at the
time and place that suits him or her. (4) There is no cost
for disconnection/reconnection and no waiting for
reconnection. (5) The consumer does not have to make
deposits. (6) It also enables and empowers the consumer
to pay back her/his debt.
However, there are disadvantages to Eskom asso-
ciated with the use of prepaid cards. Some of these are as
follows: (1) Based on interviews of senior managers, it is
now being felt that the cost of maintenance of
prepayment meters is not going down, rather it has
gone up because of some unanticipated problems that
have cropped now. (2) Prepayment cannot handle large
size currents at this stage; therefore, it is not always the
best solution. (3) Prepayment technology has not
necessarily solved the problem of pilferage, although it
has lessened the incidence. Revenue losses from pilferage
are still high and estimated to the tune of R51 million
per annum (Ngwenya, 2001).
There are also disadvantages experienced by con-
sumers of electricity through the prepaid system that are
as follows: (1) Based on interviews of users, prepayment
is seen as an instrument to control the communities.
However, this view is only prevalent in highly politicized
communities such as SOWETO in Johannesburg. (2)
Many users considered it as a big hassle to buy
electricity frequently and consumed their time and
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927920
heightened their worries of not having power in the
house.
6. Factors affecting the success of and impediments to the
expansion of prepaid electricity
The success of prepaid electricity depends upon a
number of factors, which finally produce a viable
system. This requires proper planing and management
of resources, and a careful marketing campaign to
increase the market size, among others. Several impedi-
ments that exist in the expansion of the prepaid
electricity are also highlighted here.
6.1. Factors affecting the success of prepaid electricity
The success of the prepaid electricity experiment in
South Africa can be attributed to better planing and
management of resources by Eskom and a careful media
campaign, among other factors. Two important factors
affecting the success are (1) better planning and (2) good
marketing campaign.
6.1.1. Better planning and management
A careful planing is must for setting up a successful
prepaid electricity system. Some of the actions that need
planing are as follows; tender specification, selecting a
prepayment system, staff training, marketing campaign,
selection of vending sites, contracting of vendors,
revenue management, installation of equipment, main-
tenance, and daily administration.
Selection of compatible components of a system is
necessary to ensure the efficient revenue management.
This means the meter, the payment system, and
management tools should be aligned well. It also
demands that the smooth flow of information between
meter, vending machine, and the databases, should be
ensured. Only a complete system ensures efficient
revenue management.
Similarly selection of prepayment system demands the
specification of the following; procedures for revenue
collection, data required for management, reports and
maintenance, as well as emergency credit, friendly credit,
required tariffs and taxes, compatibility to systems,
hardware requirement, vendor selection, and numbers
of customers to be served.
The sophistication of prepayment system requires
staff training on different levels such as management,
system administration, installation teams, maintenance
teams, customer service staff, vendors, and vending
operators. All employees need to understand different
aspects of the prepayment system in order to complete
the task.
A successful marketing campaign should be planned.
Selection of vending sites and contracting out to reliable
vendors has to be done carefully so as to increase
demand for prepaid electricity. Contracts need to be set
up with vendors before start of the operation. Eskom’s
research had revealed the following with respect to the
prepaid electricity service: (1) The point-of–sale image
and the personnel operating the equipment must be
trustworthy in the eyes of customers. (2) The system
must be secure so that tokens are not used by others. (3)
The point of sale should be available for vending
during the time periods convenient to the customers. (4)
The activity of buying electricity (getting to the vending
sites, buying and getting back) should not take more
than 30 min. (5) It should be easy to purchase electri-
city and customers of any reasonable age should be able
to identify their meter and specify purchase. Children
are the main purchasers at the point of sale and
purchase is often a convenience purchase (not specifi-
cally planned for buying electricity and is similar to
making errand of buying cigarettes at the local super
market).
The other important task is to streamline the
revenue management system. This requires selecting a
system manager and appointing supervisors. All
system operators need to be trained. The SMS need
to be configured to the needs, and compatibility with
other information technology system need to be
checked. Also, ensure the implementation of security
measures. And, finally policies and procedures with
respect to housekeeping of database, running of reports,
communication with vending station, should be stream-
lined.
Installation of equipment is another task that needs
careful planing. This requires setting up the installation
teams and preparation of appropriate tool kit. It is very
important to determine timings for each installation and
installation team should answer customers’ questions.
The staff should be trained in the fault-finding and
product testing. The performance measurement of staff
and adjusting their plans and giving feedback to
customer base are some other exercises that must be
done from time to time.
Ongoing maintenance is one important key to success
of the prepaid electricity management. This can be
ensured by setting up a meter maintenance center with
required tools such as credit reader, the ED verifier, and
the engineering workstation. At the same time, one
needs to define the procedures on how to handle
inquiries and meter change-outs.
The daily administration of prepayment electricity is
needed to ensure smooth functioning. This requires that
sufficient provisions should be made for emergencies
such as hardware failure, power outages, etc. Procedures
should be clearly defined for emergencies, archiving of
data, backing up data, and running of exception reports.
In addition, regular training sessions for the staff should
be conducted timeously.
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 921
6.1.2. A good marketing campaign
The prepayment system is a relatively new innovation
in the electricity industry and not well-accepted yet. This
requires a good marketing campaign. Eskom has taken
to a good marketing campaign to reach out to its
customers in both urban and rural areas. The major
purpose of marketing campaign is to engender consumer
acceptance and appreciation. A multi-pronged approach
has been followed by Eskom. This has been done by:
*Advertizing themes.
*Media (TV, radio, mail shots, brochures, posters,
etc).
*Public meetings.
*Encouraging participation of local community lea-
ders.
*Encouraging the demand by developing an effective
supply of prepaid electricity.
*Emphasizing the benefits to the consumer.
Various advertizing themes have been used by Eskom
to popularize the consumption of prepaid electricity.
For example, these include:
‘‘Making your life easier’’
‘‘Electricity at your convenience’’
‘‘No more shocking bills/accounts’’
‘‘Putting you in control of your electricity costs’’
‘‘Pay as you go’’, and so on.
These themes have been communicated to the
targeted public by way of various media means such
as television, radio, mail shots, brochures, posters,
public meetings, among others. Local opinion leaders
have been involved in the program to increase participa-
tion of general public in the expansion of prepaid
electricity.
Marketing of the benefits of prepaid electricity
requires that consumers develop an appreciation of this
facility. Thus, they need to be made aware of advantages
of prepaid electricity. The benefits of being in control of
their budget is the prime advantage of this system.
Consumers decide how often and in what value they
wish to buy the electricity. Should they forget or not be
able to pay for their electricity, they will not be
physically cut off by Eskom. They will not have to wait
to be reconnected and no reconnection fee is paid. They
no longer have to understand and pay accounts or
bills.
Marketing campaign is not just aimed at not only
convincing the customer about the advantages of
prepaid system but also to educating consumers about
the prepaid electricity. Customers should know how to
use the product; for example, how and when to purchase
credit, how to read the ED and to know when to
repurchase credit, how to clean the ED, what to do or
who to contact if they experience problems, and finally
to know how much credit they have available at any
time, and so on. Consumer education is therefore made
a part of marketing campaign.
The other part of media campaign is to encourage the
demand for electricity. To encourage demand for
electricity, we should know that most of the prepaid
electrification falls in deep rural areas; and, this requires
promotion of electricity uses. These customers do not
always have the appliances to use electricity. There is
thus need for developing the cost-effective appliances
and promote their use. One way to do so could be in
terms of Eskom developing partnership with appliance
manufacturer or distributor. The connection fee or
deposit can be used to purchase a hot plate stove. The
appliance manufacturer provides a discount coupon
with every ED which can be exchanged for electricity.
The customers are shown demonstrations on how to use
the appliances and given donations or prizes in the form
of appliances. In many places, the vendor acts as agent
for appliance manufacturer.
6.2. Impediments to the expansion of prepaid electricity
Prepaid electricity was initially launched to meet the
homelight needs of the rural areas that were sparsely
populated. Early research by Eskom indicated signifi-
cant cost savings by switching to prepaid electricity by
abating the cost of billing, meter reading, and meter
repairing. Besides it added to convenience by reducing
the risk of security to Eskom employees who had to visit
peoples’ houses at odd hours. Savings were also
expected to be realized in the form of decreased level
of pilferage through meter tampering. The introduction
of prepaid electricity solved these problems to a great
extent. However, new maintenance problems, which
were not visualized at the time of initiation of the
project, have cropped up. The new maintenance
problems are related to meter tampering. vendor fraud,
and meter failures/replacement. In terms of severity of
the problem, the meter failure comes the first, the vendor
fraud is the second most pressing problem, and the last
and least severe is meter tampering.
The prepaid program was started about 10–12 years
ago. The new meters were installed with an expectation
that they will last long. Eskom is now expecting a
high rate of meter failures, leading to extra cost of
replacement. Interviews with senior managers indicated
that it is the most important and costly problem that
Eskom is facing right now. Since the cost of replacement
of meters is falling on Eskom, it has become a costly
operation.
The second most concerns are the vending fraud.
Eskom has to depend on various vendors to sell
electricity to its consumers. Normally there are a
number of agents in an area who buy electricity from
Eskom and sell it to consumers. Over the past years,
Eskom management has realized that many vendors are
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927922
entering into fraudulent reporting of electricity sales.
Thus revenues collected from consumers are not
channeled back to Eskom. In point of fact, this is being
considered as the biggest impediment in the expansion
of prepayment technology. To thwart the problem,
Eskom is now trying to develop a national level
organization which can deal with the demand for
vending from Eskom.
The third most pressing problem is the meter
tampering. The tampering of meters can be done by
pin or magnet. An office pin or safety pin is inserted
under the plug of the circuit breaker. The pin is inserted
in the gap between the circuit breaker and the bottom of
the shunt. The method works well in all circuit breakers
making it possible to customers to steal electricity. The
usage of this method is evident by the marks left under
the circuit breaker when the pin is removed. To
circumvent the problem, Eskom contrived the circuit
breaker tamper covers on all makes and models. On the
other hand, the magnetic tampering method entails a
process where magnet is fixed under the plugger circuit
breaker while it is on. The magnet produces a magnetic
field, which is stronger than that of the circuit breaker
trip coil. This prevents the trip breaker mechanism from
operating by not allowing the trip coil to pull the
mechanism with its own field of strength. The tamper
covers were also used to prevent the magnet tampering.
The tamper covers have helped reduce the electricity
pilferage to a great extent.
5
However, simple technological improvements such as
tamper covers cannot be attributed to the trend of
declining meter tampering alone. Eskom has introduced
infrastructure audits of meters from time to time. This
has been adding to the cost. As a result of the
improvements in technology (tamper cover) and audits
from time to time has certainly produced some better
results (Anonymous, 2001). During the last 4–5 year
period, only 3–4% of meters are tampered and
estimated loss of electricity vary between R51 and
R100 million annually (Based on interviews of mangers
and Ngwenya, 2001).
6.3. A brief assessment of expansion of prepaid electricity
A cursory examination of the expansion of the
prepaid electricity reveals that it has grown very rapidly.
The prepaid program was started sometimes in 1992,
since then Eskom and other agencies have carried out
the task of installation of millions of EDs in South
Africa; the targets are given in Table 2. Almost all of
these targets have been achieved. It is estimated that
some 3 million more homes would be electrified by the
year 2000 and beyond, thus enhancing the standard of
living of half the population of South Africa. These
customers whose homes are electrified are predomi-
nantly poor people. Initially Eskom had problems in
carrying out the task as many who subscribed to prepaid
electricity thought that it was of inferior quality
electricity, compared to that supplied to white people.
6
This resulted in slow takeoff but advertizing and
education campaign by Eskom changed the perceptions
and prepaid electrification grew very rapidly. The
process of electrification is now slowed since 2000 as
the majority of domestic consumers are all electrified
and the remainder is prohibitively expensive to electrify
as they are located in deep rural area.
7. Some lessons learned
The lessons learned from the South African experi-
ence are many and we can group them under six
categories.
7.1. Lesson 1: benefiting large masses of small and
dispersed consumers
Some 50% population of South Africa lives in rural
areas; and, most of these areas did not have electricity—
the basic amenity for the 21st century standard of living.
The new democratic government aimed at producing
Table 2
Number of prepaid meters (in thousands) installed by Eskom and
other agencies, 1992–2001
Year Eskom National target
1992 146 NA
1993 205 250
1994 271 350
1995 328 400
1996 316 450
1997 285 450
1998 301 450
1999 299 450
2000 256 NC
2001 200 NC
2002 160 NC
2003 100 NC
Total 2867 2800
Note: NC—not committed.
Source:http://www.eskom.co.za/elctrification/faq.htm
5
Eskom went through a number of schemes to curtail tampering.
For example, in the early phase the magnetic card were replaced by
numerical keypads; photocells were placed inside the meters to detect
the opening of meters; electronic circuit was designed to detect all
kinds of tampering. Split meters were used. To prevent cable tamper,
Eskom used a stiff concentric cable with the armor shielding acting as
the neutral conductor. However, no solution is completely tamper-
proof.
6
Some more than 90% people who subscribed to prepaid electricity
were living in rural areas and have very little income and almost
illiterate.
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 923
electricity for all so as to right the mistakes of apartheid.
Installation of prepaid meters has taken place with an
amazing speed. Between 1994 and 1999, Eskom has
installed some 300,000 new prepayment meters every
year, totaling to about 1.8 million meters. In addition,
local supply authorities also have installed in their own
distribution areas. By 2000, some 3.2 million prepaid
meters were installed in South Africa by Eskom and
local supply authorities/municipalities. This comes to
roughly installing about 1000–1500 meters per working
day (this was up until 2000). The majority of these
meters went to new customers, i.e., previously non-
electrified houses in South Africa. However, still some
2.1 million rural households remain without electricity
in South Africa. Approximately 46% of rural areas have
been grid electrified as opposed to 80% of urban areas.
The prepayment electrification has slowed down since
2000 as further expansion of grid electrification is too
costly to undertake by Eskom and other local autho-
rities. A number of factors contributing to this include:
(1) high cost of grid electrification in rural areas, (2) low
electricity consumption with very little ability to pay off
consumers, (3) no big anchor consumers. To supply
electricity to deep rural areas, the government has
therefore initiated a project for non-grid electrification
through regulation.
7.2. Lesson 2: empowering consumers
Prepaid electricity has in a way empowered small and
dispersed consumers in South Africa by various ways.
The traditional billing system required a good infra-
structure and a good ability to pay for electricity. This
means only consumers who had fixed addresses, bank
accounts, had postal addresses, could receive the benefit
of having electricity. The prepayment omitted the
problem of billing to customers, problem of connection
and disconnection of supplies in the event consumer fails
to pay his/her bills in time. Hence, consumer has got a
better understanding of how much energy is being used.
This enables one to cut the unnecessary use and
economize by turning off lights, geyser, fans, and other
electricity based instruments. The control of energy and
budget management go hand in hand. The more one
economizes on energy use, the better one manages one’s
budget. Consumers thus abate unnecessary use of
wasteful energy.
7.3. Lesson 3: empowering eskom
Prepaid electricity has not only empowered consu-
mers but it has also strengthened the position of Eskom
in many ways. For example, the day-to-day manage-
ment and maintenance of conventional meters in rural
and semi-urban areas became an impossible task for
Eskom, mainly because of socio-economics-related and
social-attitude problems. Eskom had a difficult time
managing the conventional meters. Eskom used to hire
workers whose main task was to read meters and
disconnect electricity of those whose payments were
overdue. This entailed ensuring the transportation from
house to house and the protection of its employees in the
event they were harmed by the people. This all added to
the cost of management of conventional meters.
Furthermore, consumers tampered with meters to use
electricity illegally, adding repairment cost to Eskom. In
fact, Eskom was not able to repair the breakdowns
efficiently and this made the day-to-day management
cost prohibitively high. The conventional metering, in
the absence of proper social attitudes to electricity,
became very high maintenance demanding system. The
prepaid metering reduced this cost tremendously. It,
however, has not solved the problem of pilferage and
unauthorized use completely. This innovation cut the
cost of hiring meter readers, their transportation, and
above all the risk of life and resultant cost to Eskom.
Besides solving the day-to-day maintenance problem,
the prepaid electricity improved the cash flow and
eliminated the problems of disconnection and reconnec-
tion all together. Thus the revenue system was beefed
up. The new system thus empowered Eskom by reducing
its transaction cost significantly. In brief, the transaction
cost related to billing, deposit management, postage
management, bad or non-existent addresses, large up-
front connection fees, etc., were altogether done away
with. Life-cycle costing studies have shown that
prepayment is now proving a more cost-effective option
of system operation then billed system for Eskom, at
least in the short- to medium-run period.
7.4. Lesson 4: advertizement and the initial subsidy has
played an important role in popularizing prepaid
electricity
When Eskom initiated the prepaid electricity program
in 1992, it encountered several social and economic-
resistance to the spread of the technology. Many early
consumers of prepaid electricity, who were primarily
black Africans in rural or semi-urban areas, considered
the technology unfair and of poor quality as compared
to electricity supplied to the white community. There
were mixed feelings among many individuals; this
resulted in slow take-off. To fine-tune attitudes towards
prepaid electricity, Eskom initiated a massive advertise-
ment and media campaign to sensitize about the
importance of using prepaid electricity. This was done
by using a multi-media approach and various advertiz-
ing themes. Various media means such as television,
radio, mail shots, brochures, posters, public meetings,
discussions with public groups with the involvement of
local leaders are tried. The major idea was to develop an
appreciation of prepaid electricity in consumer’s mind.
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927924
The marketing campaign was not just directed at
convincing consumers but also included educating
consumers about prepaid electricity. This means that
consumers were taught how and when to purchase credit
or tokens, how to read the ED and to know when to
repurchase credit tokens, how to clean ED, what to do
and who to contact if they experience problems and
finally to know how much credit is available at any time.
Consumer education was therefore made a part of
marketing campaign.
7.5. Lesson 5: prepayment is not necessary a well-
received innovation in all segments of society
The discussion with various Eskom managers re-
flected that prepayment is not necessarily well received
in all parts of the country. In some highly politicized
areas, prepayment is viewed by the people as a means of
control by Eskom or government. For example, the
highly politicized areas of Soweto near Johannesburg,
the prepayment technology has not been accepted well
and residents have insisted on conventional metering
system. One major limitation of prepaid electricity is
that current prepaid meters can handle electric supply of
65 kV. This means it cannot handle high loads.
However, as consumers start enjoying the convenience
produced by electric supply, they tend to increase their
consumption by switching to various types of new
electric appliances. This can be considered a negative
point with respect to technology. However, social
unwillingness to use prepaid electricity primarily stems
from the political power a society enjoys among
politicians, and this gets translated into rent-earning
activity.
7.6. Lesson 6: prepaid electricity is not necessarily
cheaper than conventionally billed electricity
Prepaid electricity was initially launched to meet the
homelight needs of the rural areas, which were sparsely
populated. Early research by Eskom indicated signifi-
cant cost savings by switching to prepaid electricity by
abating the cost of billing, meter reading, and meter
repairing. Besides it added to convenience by abating
the risk of security to Eskom employees who had to visit
peoples’ houses at odd hours. Savings were also
expected to be realized in the form of decreased level
of pilferage through meter tampering. The introduction
of prepaid electricity solved these problems to a great
extent.
However, new maintenance problems that were not
visualized at the time of initiation of the project, have
cropped up. The new maintenance problems are related
to meter tampering, vendor fraud, and meter failures. In
terms of severity of the problem, the meter failure comes
the first, the vendor fraud is the second most pressing
problem, and the last and least severe is meter
tampering.
The prepaid program was started about 10 years ago.
The new meters were installed with an expectation that
they will last long. Eskom is now expecting a high rate of
failure, leading to extra cost of replacement The second
most concerns are the vending fraud. Eskom has to
depend on various vendors to sell electricity to its
consumers. Normally there are a number of agents in an
area who buy electricity from Eskom and sell to
consumers. Over the past years, Eskom management
has realized that many vendors are entering into
fraudulent reporting of electricity sales. Thus revenues
collected from consumers are not channeled back to
Eskom. In point of fact, this is being considered as the
biggest impediment in the expansion of prepayment
technology. The third most pressing problem is the
meter tampering. The tampering of meters can be done
by pin or magnet. The tamper covers were used to
prevent the tampering in conjunction with infrastructure
audits.
However, simple technological improvements such as
tamper covers cannot be attributed to the trend of
declining meter tampering. The statistical meters are
installed as well, which measure the energy flowing into
an area. This is then balanced with the energy sold. This
then helps Eskom to prioritize areas for auditing.
Eskom has introduced infrastructure audits of meters
from time to time. This has been added to the cost. As a
result of the improvements in technology (tamper
covers) and audits from time to time, electricity thefts
have gone down significantly. During the last 4–5 year
period, only 3–4% of meters are tampered. The
estimated loss of electricity through illegal means is
placed around R51 million per annum. In brief, prepaid
system may not necessarily be the cost-effective system
in the long run because of increased costs and due to
auditing and technological improvements required.
8. Conclusions and prospects for developing countries
The Prepaid experiment of South Africa is a noble
one. In a very short span of time (3–5 years), the Eskom
could connect to many small and dispersed consumers
of electricity. During these years, South Africa devel-
oped a sound technological and logistic framework for
this experiment. One key task was to standardize the
prepayment meters and vending system. Thus the CVS
and STS were developed. Furthermore, it was found
that small and dispersed consumers had a very low
ability to pay and there existed a lot of variation in the
payment abilities. To solve this problem, Eskom
invented various tariff schedules which could accom-
modate the specific needs of the people. The experiment
took off very rapidly as benefits of the prepaid electricity
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 925
outweighed the costs and inconveniences it caused to
people. Several factors can be attributed to this rapid
expansion; these include: (1) better planning and
management by the Eskom; (2) a marketing campaign;
(3) a good set of pragmatic policies. This does not
mean that it was all success. Several factors emerged
as the system was developed which impeded the
expansion of the prepaid electricity. However, the
expansion was not problem free. Various sorts of
problems were realized. For example, many mainte-
nance problems were not visualized in advance and it
cost a lot to Eskom. Vending fraud was another
problem. Similarly meter tampering became other
problem. Most of these problems were related to
creating viable and stable institutions. Several lessons
are summarized from this experiment by the authors.
These are listed below:
*The experiment benefited large masses of small and
dispersed consumers.
*It empowered the weak consumers.
*It empowered the Eskom in tackling a large social
problem.
*Advertizement and the intial subsisy played an
important role in popularizing prepaid electricity.
*Prepayment is not necessarily a well-received innova-
tion in all segments of the society.
*Prepaid electricity is not necessarily cheaper than
conventinally billed elctricity.
The prospects of prepaid electricity, especially in rural
areas, in the developing countries context are expected
to be good. Several advantages would accrue to the
developing society and power sector in general. Lessons
from South Africa can be used to estimate the prospects
for prepaid electricity in the developing countries. One
important developing region where prepaid electricity is
being adopted is India where advantages can be seen in
terms of improved cash-flow for the Indian State
Electricity Boards. This would help abate the financial
crisis that many SEBs are now facing. Other main-
tenance costs to the SEBs and the problem of rent
extraction by meter readers will also be eliminated
altogether. With prepayment system in place, and taking
South African experience into account, it is highly likely
that electricity pilferage would be reduced to a very
minimum. And, at the same time, this will enable the
SEBs to eschew the flat tariffs that had been in place for
a very long time, and would permit increasing tariff
rates. In over all, it will enhance the revenue and cut
down electricity pilferage.
The possible problem that can arise in transplanting
this technology in the developing world context is the
possibility of increasing frauds, in particular, in the
vending sector if preventive steps are not taken from the
very beginning. Vending frauds have been a severe
problem in the South African context. For instance,
developing countries can use this South African
experience to their advantage by designing a credible
management system from the outset. One way to do
circumvent this problem is to assign this task to reputed
and large organizations that can stand by their credible
commitments.
The important task for developing countries adopting
this system would be to develop strong and durable
prepaid meters that would suit to their particular
environments. In the South African context, the
replacement of meters after 10 years has cropped up as
a major problem. Since this cost is not shared by the
consumers, prepaid electricity becomes a costly venture.
The developing world can stave off these problems from
the very beginning by choosing and investing in the
development of better prepaid technology, especially the
vending and metering ones.
The new technology concept—the remote metering or
on-line metering—is in the offing. This is like the cell
phone. Remote or online metering is essentially a
communication to the meter from a remotely located
point of sale. The principle of operation is like that used
in the smart card banking. A person wishing to buy
electricity would go to a vending station. A vending
station can be a vending terminal similar to current
banking machine. Transactions (tokens) for meters
would be generated by the vending equipment/autho-
rities. These tokens (which exist electronically) are
routed to the transmission controller for the cell to
which they belong. The transmission modules handle all
tokens according to priority and additional transmission
information, appended to the tokens. Service com-
mands, for example, would receive higher priority and
are queued for transmission immediately. The transmis-
sion control module handles all encryption of tokens
and will be a secured system. The transmission control
module broadcasts the tokens to the cell.
This possesses various advantages. One, the consumer
is not required to be physically present at his/her meter
in order to effect the transaction. There is no need to
buy token. Two, credit purchases cannot get lost as they
do not exist physically. Three, this enables the dis-
tributor to apply the time of day tariff or emergency
control measures. Four, the problem of non-payment
can be eliminated altogether.
The prepaid electricity can be promoted by using a
differential charge if it were used for ground water
abstraction. This could enhance the adoption of prepaid
electricity by farmers for pumping the ground water to
their fields.
References
Anonymous, Audits Scaring off Electricity Thieves. Martin Creamer’s
Engineering, March 9–15, 2001.
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927926
Bezuidenhoudt, S.J., 2000a. (System Consultant, Electrification and
Industry Restructuring- Eskom). 20 Questions and Answers about
–EDs, Eskom, South Africa.
Bezuidenhoudt, S.J., 200b. (System Consultant, Electrification and
Industry Restructuring- Eskom). Card Use in Electricity Payment,
Eskom, South Africa.
O’Kennedy, J., 2001. Senior Consultant Prepayment, Eskom. Fre-
quently Asked Questions: End-User Related Questions, http://
www.eskom.co.za/electrification/faq.htm
Ngwenya, P., 2001. Squatters plug in to free power. Business Day, 2nd
March.
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 927
... In South Africa, for example, a prepaid meter programme was designed and implemented to improve electricity accessibility in the country (Kambule et al., 2018a(Kambule et al., , 2018bMakonese et al., 2012). However, this programme received mixed acceptance signals in several communities (Styan, 2015;Tewari & Shah, 2003). In the low-income households of the Soweto Township in particular, communities have rejected the prepaid meter programme for the past two decades (Makonese et al., 2012;McDonald, 2010). ...
... Eskom's marketing strategy on prepaid meters has been mainly T A B L E 5 (Continued) been key (Tewari & Shah, 2003). Household consultations by trained staff have also been an important marketing and education strategy. ...
Article
This study seeks to formulate best practice indicators characterising the prepaid electricity meter market. This was undertaken by reviewing both developed and developing countries' experiences with the technology, conducting in‐depth interviews with key stakeholders, and applying the strength weaknesses opportunities threats analysis tool. The generated outcomes are used to formulate a set of best practice recommendations that can inform decisions on improving the acceptability rate of the technology in Soweto. We found that the introduction of the technology faces a number of challenges, broadly being its complete rejection by some communities. In particular, the inadequacy or absence of incentives, the absence of prepaid meter market tariffs and regulatory mechanisms are fundamental factors affecting acceptance levels and effectiveness of the technology in developing countries. The case of Soweto is unique in that it has a historical political basis that even led to some violent protests. To improve the acceptance level and increase the buy‐in of local communities in Soweto, we formulated a number of best practice recommendations including the need to factor in the programme design the historical context‐specificity of Soweto, its low‐income status, the need to put the communities at the centre of the programme and the implementation of incentive measures inspired from the developed world.
... The prepaid framework allows for socialization and socioeconomic ordering in a variety of ways, including financial, political, innovative, and technological. Using the prepaid model, consumers can effectively and easily manage their budgets, reducing wasteful and unnecessary electricity use, such as not conserving energy and leaving devices on [13]. The prepaid approach benefits municipalities and utility providers since it boosts income, reduces postpaid outstanding obligations, and improves customer relations [9]. ...
Article
Full-text available
Energy consumers in Nigeria have long complained about Distribution Companies' unfair billing practices, exorbitant monthly electricity bills resulting from meter estimation rather than accurate meter reading. The study's objectives were to establish the relationship between the prepaid metering system and customer satisfaction; and evaluate the level of satisfaction concerning the usage of the prepaid metering system in Niger State, Nigeria. In carrying out the study, the structured questionnaire was administered to 393 randomly chosen respondents drawn from prepaid meter users, out of which 344 responded, generating a response rate of 87.5%. The data derived were subjected to spearman correlation and multiple regression models. The major findings from the study showed a significant, moderate, and positive relationship between the prepaid metering system and customer satisfaction. Additionally, three significant predictors, Affordability, Availability, and Flexibility with p < .01 are statistically significant. Further findings from descriptive statistics revealed that users had the highest level of satisfaction with their privacy as a result of no meter readers and no accumulated. The study concluded a positive and beneficial link between the prepaid metering system and customer satisfaction. Therefore, the study recommends good customer care units and a marketing campaign for better knowledge of the prepaid metering system.
... Relative advantage or perceived usefulness of new system over an existing system has been proven in extant literature to be key determinant influencer of consumer adoption and usage (Liébana-Cabanillas, Ramos de Luna, & Montoro-Rios, 2017;Oloveze, Oteh, Nwosu, & Obasi, 2021). In essence, electricity consumers are influenced when they become aware that prepaid metering can enable them to have better understanding of how much energy is being consumed (Tewari & Shah, 2003). This is because such awareness will help them to gain more control of energy use as well as budget management. ...
Article
Full-text available
Energy production and consumption is one of the key facilitators of economic growth and development. Electricity outlook in Nigeria is challenging especially with postpaid billings approach that have led to several complaints, discontentment, and consumers' search for alternative. The study assessed how prepaid metering influences consumers' experience and trust towards consumption of electricity in order to proffer policies and intervention programmes that will redress the ailing energy sector. Survey design was used and structured questionnaire was used, pretested and administered to users of prepaid metering in Abia State. Logistic regression and correlation coefficient was used to analyse the results. The findings revealed that socioeconomic factors and service experience positively influence choice of prepaid metering. We recommend policy approach and intervention programmes that leads to aggressive installation of prepaid metering, reduced acquisition cost, and fixed low billing for electricity users pending DISCOS' installation of prepaid metering.
Article
Globally, power system operators are exploring ways to leverage the capabilities of smart meters to implement fine-grained demand side management (DSM). This paper presents a new simulation tool to evaluate operating strategies for smart-meter-enabled (SME) islanded microgrids being advanced for sustainable rural electrification in emerging economies. Based on MATLAB/Simulink, the tool's component-level models of small microgrids can be easily configured. Alternative rule-based operating strategies are implemented with controllable supply and storage components as well as other components driven by external factors (e.g., weather and time of day). To account for the wide range of possible operating conditions in real-world applications, statistical metrics can be evaluated using Monte Carlo (MC) methods based on user-defined, time-dependent probability distributions for demands, supplies, and environmental variables. Features of the tool are demonstrated with case studies for a representative microgrid in rural Rwanda.
Chapter
The notion that high rates of electricity accessibility translate to progressive human development should be applied with caution, particularly within a region like Sub-Saharan Africa. To build and understand this argument, this chapter uses knowledge generated on the South African prepaid electricity meter market to show that the technology has the propensity to contribute to the problem of energy poverty. In the past decade, while the country has managed to reach electricity accessibility rates of more than 90%, the cost of electricity has also increased by more than 300%. We note that the introduction of prepaid electricity meters has been at the centre of household electrification but beyond that we also find that the technology results in a 48% reduction in electricity consumption. Deviating from the mainstream analysis that the latter is positive, we argue that it may not. This is because poor prepaid metered households continue to spend a significant portion (60%) of their income on electricity, rendering them energy impoverished. With existent and widening socio-economic inequalities in the country and region-wide, this chapter can assist regional decision-makers to think cautiously about the components that should frame the household prepaid electricity meter programme, with the ultimate goal of avoiding further widening of inequality.
Chapter
Since the arrival of traditional prepaid electricity meters over three decades ago, there has been a marked surge in the deployment and utilisation of household electricity meters in the Sub-Saharan Africa region. Countries like Mozambique, South Africa, and Tanzania currently stand as regional leaders with more than 50% of the respective country household sector under this technology. We note that the Sub-Saharan region prepaid technology market is the fastest growing in the world is expected to peak even higher by 2034 with the deployment rate increasing by 234%. Tied to the expanding smart grid spaces in the region, we equally anticipate that the use of smart prepaid electricity meters (SPEM) technology will also begin to dominate in the coming decades. Strangely, while the market is growing so rapidly we find that there is still paucity with research focusing on this prepaid electricity meter market, the drivers to this, and its role in the electrification programme in the region. The knowledge shared in this chapter provides a strong basis for future research to probe what the rationale is behind the technology and growing market? Are policy and decisionmakers cognisant of the implications associated with such a surge?
Chapter
The global energy market is not immune to the transformational and progressive waves of the Industrial Revolution. With the fourth wave of the Industrial Revolution currently and futuristically driving the market, it is important to address the location and ability, or inability thereof, of developing states like the Sub-Saharan region to ride this wave with benefit. While research arguments validly assert that the Sub-Saharan Region is generally trapped within the second wave, this reality is rapidly changing, particularly in the energy or electricity realm. While the region has an overall operational electricity capacity of approximately 100 GW, more than 600 million (≈57%) people remain without electricity in the region. Improving human access to electricity has direct developmental implications, especially when considering the current reality of the virtual economy, wherein connectivity is what drives the cloud of development. Governments across the region are thus increasingly reframing the traditional approach of grid development by investing on cost-effective smart grid infrastructure, especially for rural areas. Off-grid, mini-grid, and stand-alone renewable energy systems have become instrumental mechanisms for radically improving connectivity and electrification in the region. For the region to deeply entrench itself in the fourth wave, we propose that authorities in the region should create conducive investment (e.g. governance and regulatory framework) ambiance for further development of mini-grid systems and adoption of smart grid technologies.
Chapter
This chapter explores the nature of the relationship between prepaid electricity meters and poor households in the Sub-Saharan Africa household sector. At the centre of this chapter is a discussion of two themes that we find to be the epicentre of the motivation towards the deployment of prepaid electricity meters. The first driver pertains to the challenge of non-payment of electricity services by households. Moreover, the inability of the utilities to disconnect supplies to non-paying customers, as governments maintained long lists of strategic consumers to which supplies could not be disconnected and zealous local politicians went on adding to this list a number of local industries to protect local jobs and the local economy at the expense of the energy firms. The second driver to the introduction is the need to reduce electricity theft which has pushed authorities to introduce the technology. But we find that this has not been effective. For example Mozambique, South Africa, and Nigeria continue to suffer annual losses of about $100 million, $1.5 billion, and $54 billion on electricity theft, respectively. We argue that the technology will remain ineffective in addressing the two drivers because the strategies governing deployment are utility centred and not contextual to the socio-economic conditions. We, therefore, propose a holistic prepaid electricity meter framework that can facilitate the development of technology policies that are relevant and effective for the conditions in the region.
System Consultant, Electrification and Industry Restructuring- Eskom). 20 Questions and Answers about –EDs, Eskom, South Africa
  • D D Tewari
  • T Shah Rbezuidenhoudt
D.D. Tewari, T. Shah / Energy Policy 31 (2003) 911–927 926 rBezuidenhoudt, S.J., 2000a. (System Consultant, Electrification and Industry Restructuring- Eskom). 20 Questions and Answers about –EDs, Eskom, South Africa. Bezuidenhoudt, S.J., 200b. (System Consultant, Electrification and Industry Restructuring- Eskom). Card Use in Electricity Payment, Eskom, South Africa
Senior Consultant Prepayment
  • J O'kennedy
O'Kennedy, J., 2001. Senior Consultant Prepayment, Eskom. Frequently Asked Questions: End-User Related Questions, http:// www.eskom.co.za/electrification/faq.htm
Audits Scaring off Electricity Thieves. Martin Creamer's Engineering
  • Anonymous
Anonymous, Audits Scaring off Electricity Thieves. Martin Creamer's Engineering, March 9–15, 2001.
(System Consultant, Electrification and Industry Restructuring-Eskom). 20 Questions and Answers about –EDs
  • S J Bezuidenhoudt
Bezuidenhoudt, S.J., 2000a. (System Consultant, Electrification and Industry Restructuring-Eskom). 20 Questions and Answers about –EDs, Eskom, South Africa.
System Consultant, Electrification and Industry Restructuring- Eskom). Card Use in Electricity Payment
  • S J Bezuidenhoudt
Bezuidenhoudt, S.J., 200b. (System Consultant, Electrification and Industry Restructuring-Eskom). Card Use in Electricity Payment, Eskom, South Africa.
Squatters plug in to free power
  • P Ngwenya
Ngwenya, P., 2001. Squatters plug in to free power. Business Day, 2nd March.