However, during the pandemic, lockdowns and quarantines have restricted the movement of billions of people – having an impact on this revenue collection model, and therefore the delivery of electricity services. Customers typically pay their bills at utility offices or other payment locations. In many developing countries, meter readers usually have to visit consumers, to not only read meters and record consumption, but also to deliver bills. If utilities could deliver high-capacity, reliable electricity, it would boost the ability and willingness to pay for consumption – a study in Ghana found that firms would be willing to pay 12.6% more for uninterrupted electricity access.Ĭoncerns around non-technical losses and cost recovery have increased during the COVID-19 pandemic, with the crisis altering many utilities’ face-to-face revenue collection models as well as people’s ability to pay for their electricity. Utilities in many developing countries often become trapped in a persistent cycle of low cost recovery leading to restricted and low-quality supply. Non-technical losses (which include non-payment of bills and electricity theft) cost utilities an estimated $25 billion per year worldwide – and if utilities don’t collect enough revenue and recover their costs, they will have less money to invest in the infrastructure maintenance, modernisation and technical upgrades that are needed to improve reliability. When the quality of electricity is poor, consumers may resist paying for it – feeling justified in not paying their bills, or even not paying for their electricity at all through meter tampering or directly tapping into electricity lines.īut low bill payment and high theft perpetuates poor-quality service. Unreliable power can also reduce employment opportunities, and can inhibit the participation of women and youth in the workforce by making domestic chores more labour-intensive. According to World Bank Enterprise Surveys data, in Sub-Saharan Africa and South Asia, 41.7% and 46.1% of firms see electricity as a major constraint, respectively. It can supress investment in income-generating electrical appliances and can lower output from existing ones, which decreases productivity and profitability and hinders entrepreneurship and job creation. Unreliable electricity limits the economic benefits of being connected to the grid. They can, for example, be a result of insufficient electricity generation capacity, ageing equipment, weak transmission and distribution networks or maintenance requirements.
Problems are typically related to the capacity and quality of electricity systems. Nigeria’s national electricity grid even collapsed a t the end of November 2020. It is common for households and businesses across Sub-Saharan Africa and South Asia to receive low-quality, unreliable electricity, with them frequently facing u npredictable power outages, scheduled electricity shutdowns (load shedding) and voltage fluctuations. Programme director Simon Trace explains more. In developing countries, improving the quality and reliability of electricity often depends on whether utilities can generate sufficient revenue to fund infrastructure upgrades – but this can be challenging, especially during a pandemic.
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