One-on-One with Daniel Schnitzer, CEO SparkMeter
Helping Microgrid and Distribution Utilities in emerging markets run sustainable, efficient, and reliable systems through grid-management solutions
Can you briefly tell us about SparkMeter? And what made smart meters the focus of SparkMeter?
Seven years ago, we founded SparkMeter to provide utilities in emerging markets with access to an affordable plug-and-play smart metering solution.
My motivation for doing this stemmed from prior personal and academic research. When I was working towards a doctorate focused on energy access, I took an interest in minigrids. I wanted to understand what was keeping them from being more prevalent. There are a lot of people who don’t have electricity, so why aren’t there more microgrids? My studies enabled me to travel, which gave me an opportunity to spend time talking to people in remote rural communities being served by microgrids.
While doing field research in Haiti, India, and Borneo, I found that there were three distinguishing areas where minigrids could improve: Firstly, they needed to be able to collect a large number of very small payments from distributed customers in order to sustain themselves. Secondly, there needed to be a way to remotely monitor their systems. For instance, I visited a minigrid in India that was designed to provide electricity for eight hours a day but was only producing for four. There was no monitoring system in place and community members didn’t have any technical knowledge of the system. It turns out that two years’ worth of built-up dust and dirt on the solar panels had degraded the efficiency of the whole system. The solution was as simple as showing the community how to clean the dust off. Finally, limited power supply was an issue. If some people used too much power, there wouldn’t be enough energy for everyone else. So there was a need to intelligently manage the load. It became clear that smart metering can solve all these problems.
Can you expand on how smart meter technology differs from other existing technologies such as Advanced Metering Infrastructure (AMI)?
The existing technology, Advanced Metering Infrastructure (AMI), has been around for over 20 years in the United States and Western Europe. I consider AMI akin to pre-iPhone technology because it’s an old-school enterprise IT solution. It does not incorporate edge computing, Internet-of-Things (IoT), or have native cloud-based functionality. It’s also a solution built for very large utility companies. To install AMI, utilities need to hire an IT consulting company like Deloitte or Accenture to network the meters, get them to communicate, and integrate them with other systems. This requires local servers hosted by the utility with enough computing power to support a database capable of capturing readings from the full AMI system. You then need a way to get data from the database, an undertaking typically accessible only to very large businesses with sophisticated IT departments. So for these reasons, AMI can’t scale down. If you’re a small utility like a minigrid operator or a utility serving low-income households, you likely don’t have access to these kinds of capabilities or resources. You simply aren’t generating enough revenue to cover these fixed IT costs. This isn’t true only in emerging markets— even here in the USA, there are many small utilities serving fewer than 250,000 customers who aren’t able to get the full benefit of AMI.
Our idea was to take an approach to smart metering that looked very different from the status quo. We needed to deliver a solution that was plug-and-play and that looked more like IoT rather than IT. We’re extremely proud that that’s what we’ve succeeded in doing for the market.
SparkMeter is specialized in offering solutions for electric utilities in developing markets. Could you tell us about the new technology that you are currently working on? What motivated you to develop it and how is it beneficial to minigrids?
The next area we’re moving into is utility digitalization through smart metering. Today, we support utilities by providing tools for billing and payments. Our systems process over 100,000 electricity payments every month, and about 65% of those payments are through our API, mostly through mobile money payment integrations. The major features being used today are for billing and payments, but that doesn’t necessarily make a smart grid.
Our current focus is taking the data from our meters to support utility operations across the management of outages, the distribution network, assets, and system planning. Really, we’re working to help utilities digitalize every aspect of their operations.
Currently, we are deploying a system in Benin for Sherlock Grids SAS. They’re a Special Purpose Vehicle (SPV) created in Benin by Power: On, a minigrid operator, and Akuo, a France-based Independent Power Producer. We’re going to be flying drones over their distribution network to create a geospatial model of their distribution systems as well as a model that says how everything is connected electrically.
This will allow Power: On to trace the connection from a specific customer down a power line to a transformer, and ultimately to the generation system. They will have a full digital model of the system that will be migrated to our cloud-based software. An analytics dashboard will inform them of the health and performance of their grid as a whole in real-time.
This application is the next frontier of our technology. Our services will help utilities achieve the complete spectrum of utility digitalization and grid visibility.
How is this new technology complementary to the meter systems?
Think of the electricity meters as being sensors at the very edge of your grid. Our new software will use those sensors to understand what the entire grid looks like. By using data from the edge of the grid, our grid analytics inform utilities about things like whether their distribution and transformer lines are undersized or oversized, or whether parts of their grid have higher or lower losses, and gauges fluctuations in reliability.
By leveraging the existing technology of our meters, utilities won’t need us to service or to install any new equipment. It’s all software. As long as we can make a model of their grid, we can then take the data from the meters and give them more granular performance insights. The result is a vastly cheaper solution where utilities can improve efficiency rather than increasing generation capacity.
Is it different from the back end software that supports O&M efficiencies, i.e. AMMP, New Sun Road)? How?
This technology is different from backend software built to avoid inefficiencies, such as AMMP and New Sun Road. Many people who work in the minigrid sector come from experience working with solar energy. This creates a workforce that sometimes lacks a utility background and understanding of utility distribution networks. If you work for a utility, you’re familiar with poles and wires and transformers, and customer connections.
The robust knowledge of these distribution systems is where our experience lies. SparkMeter is mostly a team of distribution utility people, rather than solar generation people. Both parts of the system are equally important, but our hope is to give minigrid operators the same level of visibility into the distribution system that they currently have into the generation system. It’s true that if a generation system goes out, you have an outage and no customer can have power if the source isn’t producing. However, if a generation system is in service, and there is an issue on the grid that affects 10% of customers, generation analytics won’t help you. That’s where our technology comes in handy.
In what ways do you think the new technology you mentioned will promote scale?
As successful developers grow from operating ten sites into the hundreds and thousands of sites, they’ll need to start looking more like distribution utilities. They’re going to need to have accurate information about the performance of their poles, wires, and transformers. Using digital grid management tools helps them manage all those distribution network assets. Tracking it in a spreadsheet is not an adequate solution. Using geospatial and power conductivity models ensures utilities avoid growing pains and challenges.
Smart metering is embedded into most minigrid business models we’ve experienced, and it’s extremely gratifying that the sector has gotten to this point. I saw a post on LinkedIn from someone at the World Bank, and it had a picture with solar, some wires, and houses. They had also drawn and labeled “smart meters” next to each house. The post said something like, “We need this times 200,000” to make the point that we’ll need 200,000 mini-grids to make a dent in energy access, but it also illustrated all the components that make those systems sustainable. Five years ago, no one at the World Bank would’ve said smart meters are a required piece of the solution for minigrids. It’s been humbling to have played a role in making this idea a mainstream concept. We still have work to do, though. I don’t see many at the World Bank saying that we absolutely must have smart meters for large utilities to become sustainable companies.
I don’t think it gets enough attention, but electrical grid reliability is also a direct cause of huge carbon emissions. In the absence of electricity, consumers resort to diesel generators. An estimated 20-30 million generators in use by people with weak or broken grid connections release 100 megatons of CO2 per year, equivalent to 700-1000 large coal-fired power plants (IFC, 2019). Utility digitalization is going to be required to improve grid reliability and reduce the use of fossil fuels.
We even built a tool that help utilities assess their satisfaction with the extent of their digitized operations. Awareness and education around the impact of digital tools is an important first step, but investing in improvement must come after.
Do you have minigrids companies who already integrated this innovation?
We’re working on it. I already mentioned our work with Sherlock Grids SAS, which includes drone-powered geospatial and conductivity modeling and subsequent analytics dashboard. We’re still in the modeling stage of that project, and will be delivering the software after the models are developed. We have another customer who will be doing a similar project later this year. I’m hoping that by the end of the year, we’ll have the first version of the custom analytics dashboard up and running.
Looking at the minigrid market today, what do you think it will look like in 5 years?
Well, I hope it’s a lot bigger and that there are many more operating minigrids. There is an ongoing blurring of the line between the minigrid and the grid. I expect to start seeing a lot more very large minigrids serving thousands of customers, and areas where there are grid-connected minigrids. Utilities don’t always have the capacity to do maintenance or collect payments. So, a minigrid utility will come in and take over part of that system and operate it independently. Implementing local solar, storage, and smart metering systems will improve performance and sustainability.
In situations with a much larger grid system or a minigrid that ties into a larger grid, utility digitalization is going to be necessary. To serve more customers on a single grid, minigrid operators will have to expand their focus beyond generation. They’ll need better tools for operating the poles, wires, and transformers on the grid. We’re focused on supporting minigrids to get to that point.
How do you envision the future of SparkMeter? Any plans to expand the business beyond minigrids?
In 2019, the company implemented drastic infrastructural updates to be able to serve much larger Distribution Utilities in highly regulated markets. The new meter suite was designed to meet the specific standards in the biggest and toughest markets, like Nigeria (NEMSA), the Philippines (ERC), and India (BIS). We added functionalities like theft prevention and improved tamper detection with remote notifications to appeal to these more demanding utility customers.
We now have a couple of large distribution utility customers. I predict that by the end of next year, we will have sold as many meters to Distribution Utilities as we have to minigrids for the past five years combined. We’re seeing a much larger market within the Distribution Utility space. As we close up our first few deals, we want to continue growing in that market, while also continuing to serve the minigrid market.
In what ways are you nurturing the growth of the sector to fulfill this vision?
We’re in the process of raising a debt financing facility for our customers who purchase a larger number of meters. If a customer is going to buy 10,000 meters or more, we want to be able to work with them to finance that purchase. This is important not only for the bigger Distribution Utilities but for the minigrid utilities as well.
About SparkMeter
SparkMeter offers grid-management solutions that enable utilities in emerging markets to run profitable, efficient, and reliable systems. SparkMeter seeks to increase energy access and energy quality across the world. Its technology transforms utilities from enterprises with unreliable operations, negative cash flow, and credit unworthiness to enterprises that are sustainable, provide high quality of service and can take on outside investment to continue their operations and connect new users to their grids. Learn more at www.sparkmeter.io