How Shyft Power Solutions, Steamaco merger will impact Nigeria’s energy sector – Ugwem Eneyo

After a decade of solving electricity metering problems with its unique technology, which has given it a cutting-edge, Shyft Power Solutions led by its vibrant and visionary Chief Executive Officer, Ugwem Eneyo-Showunmi spread its tentacles recently by teaming up with SteamaCo, a United Kingdom based technology house led by Tom Parkinson to drive the same vision in the Nigerian energy landscape. While Shyft Power Solutions is an indigenous company helping power companies to deliver affordable, cleaner and more resilient power to communities, SteamaCo, an Anglo-African technology, empowers energy providers for more and better output.In this interview with journalists, Eneyo-Showunmi on the merger between the two companies and how the collaboration will scale up energy services using its unique IoT hardware and integrated hardware to deliver reliable, affordable power to communities in emerging markets. Excerpts:

Tell us about Shyft Power Solutions and what it aims to achieve in the Nigerian electricity sector?
Shyft Power Solutions is an energy technology company which began its operations about a decade ago, with an aim to help power companies deliver reliable, affordable and cleaner energy solutions. It is a known fact that the country is plagued with energy challenges exemplified by intermittent power supply.

At Shyft, what we recognised was that these power companies now had basically assets, whether it is generators, solar, batteries, at many locations that they needed to maintain to keep power in buildings like this office, up and running. But you can imagine the challenge of scaling such a power company if you do not have visibility into what’s happening remotely. You would have to be sending staff out to be seeing interruptions in what is going on. Somebody is calling you, saying, ‘Hey, the generator is down, what is happening?’

So at Shyft, one of the first things we realised is that for solutions like micro-grids, backup power, solar, battery technology to really scale through and meet the energy demands of Nigerians, the power companies that are delivering these solutions needed to be able to support, maintain and operate those types of solutions.

So Shyft Power Solutions got started by delivering, monitoring and controlling solutions for backup power systems and micro-grids. We specialise in building Internet of Things (IoT) to sensors, gateways, to basically monitor everything you can imagine about your energy systems remotely, as well as the software applications that not only provide that monitoring but help the power companies to understand how to handle things like preventative maintenance, keep those systems up and running and also design and deliver more effective, cost-effective solutions for Nigerian businesses.

Recognising that Nigerian consumers also wanted to feel empowered and understand “what am I paying for when I am buying power”, we also got into that. There is a lack of transparency that exists because of gaps in metering and monitoring solutions.

So because of our expertise in power, IoT and software, we moved into the space of also providing what we called sub-metering at the time – metering solutions not necessarily at the utility or distribution company scale but for independent power producers, facility management companies, estates, where you as a homeowner or commercial business want to understand how much energy you are using and be able to pay for it in more streamlined, intelligent ways like via mobile apps, and have transparency in what services you are being provided by your power company.

You talked about consumers wanting to know what they consume. One major issue in the electricity sector is the metering gap. The government has been on this for a very long time. Several deadlines have been issued to no avail. What is your organisation doing to address that?
Shyft was in the energy technology space but only started moving into the metering space about two or three years ago. Prior to that, we were working with power companies, like I mentioned, for monitoring and control solutions for their infrastructure and assets.

This has been an ongoing challenge, but part of what has been exciting about our merger with SteamaCo is that SteamaCo is bringing a lot of expertise in delivering metering solutions, certainly in the off-grid market, working with multiple stakeholders and institutions that fund and finance initiatives to address metering gaps in rural areas. And Shyft has quite a bit of experience working with power companies in semi-urban and urban areas.

We think that joining forces is really going to allow us bring our expertise in working with institutions and investors that can fund and bring capital that are required to really fund the meters that are needed to meet the gap. And Shyft brings the experience, the local knowledge and experience on how to work with power companies, what they need, how metering solutions should actually be built and scaled up to actually operate effectively in the market.

Shyft and SteamaCo coming are now at the forefront of recognising that for investors who are concerned about where they should invest in the energy landscape; this is where digital transformation is necessary. We need to be able to make data-driven decisions.

Investors need to be able to make data-driven decisions. So Shyft and SteamaCo are saying we are going to move power forward and deploy metering solutions because we know that there is an opportunity that is going to arise from having a better visualisation from digitising the energy landscape by deploying meters. And so we are really optimistic and excited about what that means and I think that there has been quite a bit of movement in the power sector over the past two years.

With more decentralisation, states having more rights to do things, franchise models are empowering people. We are seeing more and more independent power producers emerging and scaling up and I think that alongside collaboration with the DisCos, we are really starting to see the proper momentum. So you are right; it has been slow movement over the past several years, over the past decade, but the ball is rolling, the momentum is here. We can see it happening as well as what has been happening in the regulatory space over the past 24 months.

Everybody knows that there has been a huge challenge in the power sector in Nigeria. Why did you establish Shyft in Nigeria despite all of these challenges?
Yes, this is actually moving into a more personal question. My family is from the Niger Delta area and we all know the history of how development, infrastructure, environment have impacted people.

Nigeria is very wealthy when it comes to resources. Companies come here to do business, thrive and often we do not necessarily see that positively impacting the people and the communities. Growing up and seeing that and the impact that, that type of development had directly on my family made me feel that I could play a very important role in building a power company that not only was focused on building premium products and technology, but that also recognised that we are here to solve problems for people, for consumers.

When Shyft started, we were primarily Nigeria-based. Most of our team members are Nigeria-based. We believe in global collaboration because we think that is important. But I wanted to start a company that allowed the consumers, the people closest to the problems to be at the forefront of solving the problems.

And so, for me, I know that doing business in Nigeria is tough, but I am a Nigerian. I am Nigerian-American. Right? So I have the privilege of being able to say that I want to be able to go home and positively contribute to my family and where I come from, and if not me, then who? That was the rationale.

How quickly will the Shyft metering units be produced and made available to electricity consumers?
That is a very good question because the work has long begun. So, Shyft metering solutions have been in the Nigerian market for about two years. This building that we are sitting in today has monitoring controls and metering solutions that are deployed by Shyft.

We have several thousand Nigerian consumers that are using Shyft FlexView, our sub-metering solution. And most recently, we collaborated with Eko Atlantic Utilities for the Eko Atlantic development, rolling out metering solutions for their development of that IPP. So we are already seeing consumers use Shyft technology.

We are very excited about the early momentum that we have. But you are right; there is a lot of work to do. And our merger and collaboration with SteamaCo is allowing us to scale up and do that faster together.

Can you give us an insight into the partnership between Shyft and SteamaCo and the shared objectives of both organisations?
There is a concept that started in academia, which I think is now more commonly used called energy poverty, which is people are spending too much on power. And it is not reliable power. And it is not fully meeting the needs of its consumers.

We are on a mission to eradicate energy poverty. And we think the method of doing so starts with ensuring that power companies can provide productive power. That means power companies need to be able to be reliable in the services that they provide.

And in order to do that, there is a suite of digital solutions that are necessary. That is advanced metering infrastructure. It is the software applications that they are able to use to not only handle billing and collections but to detect losses and abnormalities in the system.

That also means being able, as I mentioned earlier, to monitor their infrastructure, monitor their assets, mitigate interruptions and quickly address interruptions in their infrastructure. So together, Shyft and SteamaCo will bring their expertise in metering solutions, especially in collaborative micro-grid projects; projects that bring in multinational stakeholders using Shyft local expertise in IoT and software.

Together, we are working with power companies to really drive digital transformation. So I think the key theme there is the digital transformation of the power sector, of utilities, turning things from manual operations, from what we call dumb, not because it is not smart but because it is not digitised. We are trying to transform that. And we think if you can drive operational efficiency, if you can prevent losses, if you can drive transparency and reliability with consumers, it is really going to allow the power sector to move forward.

But what would you tell us about your company’s definition of innovation in the context of power solutions for Nigeria?
That is a very good question. I would like to give you a short answer, but of course I am going to give a little bit of a story. You know, there is a story about the inventor and what they need. This is before the automobile. They would have said, you know, I need a faster horse. That is innovation. Help us breed faster horses. But then comes along the likes of Henry Ford and whatnot, and the response was not a faster horse. It was not any type of genetic engineering. Instead, it was the vehicle, and the engine, and then all the innovation that came around from that. And I think that really speaks to the spirit of innovation.

For Shyft, innovation is about intimately understanding the nature of the consumer’s problem and not starting at what we believe is a solution. Right? And so that is why our collaboration is so unique because we are bringing together folks who are brilliant engineers, brilliant developers, brilliant businessmen and women, that intimately understand the challenges that Nigerians face. We live it. The people, who are building our products are living and experiencing the problems that we are trying to address. And so at Shyft, our core value is that we take on what others call impossible. That is what innovation is about.

It is about when people say, ‘Oh, how are you going to do this in Nigeria? Nigeria does not work like this. That is okay. That is exciting to us.
That is what we lean on. So what I am saying is, this power sector thing, nothing has really progressed and moved for nearly 10 years. Coming together is exciting to us. That is where innovation happens; that is where we are going to be building something that most people would have said you are doing this, you are building this in Nigeria. That is what excites us, and that is the spirit behind our culture of innovation.

So, what key metrics will you use to measure success in the power sector?
There are few. One is metering points. It is a key indicator of how many consumers we are impacting, how many lives we are impacting, and how we are addressing the well-understood metering gap that exists.

Secondly, you heard me mention lives impacted. That is a key one for us when we think about impact. So, we are going to be making sure that we are providing something that is really transforming the lives of African consumers, Nigerian consumers.

I would also like to emphasise that we keep track of things like the amount of energy processed, passing through our technology, our meters and our monitoring solutions, as well as naira process. So we want people to be able to pay for power in a transparent manner. So if we can get them to be paying for power using our applications, our software helps us show that we are moving from informal metering and collections to transparent and reliable metering and billing.

You talked about informal metering consumption. What do you expect to see in terms of consumer behaviour and electricity consumption patterns?
Oh, I could talk all day about this one. I am an engineer by background, so the data is very exciting to me. One of the first things that we see is your bank account. How many of us would have a bank account and you put money in, but you never actually log in and check? We could not do it.

What do we do? We all go in and see how we are spending and we adjust our behaviour as we see the bank balance. Even as you get an alert, you are seeing all these alerts and you are adjusting your behaviour. It is a very similar thing that happens when a consumer can open his or her phone and actually see not just that you have topped up, but that your consumption is dropping.

People then feel not only more empowered because they feel like now I can make better decisions, but we also see people using tools on our apps to then budget how they want to spend on power. They can actually forecast and say, my historical behaviour patterns this month suggest that I am going to overspend what I want to before the end of the month. That is something you could not do before.

In a society where energy poverty, as I mentioned, is an issue, we are all feeling like we are spending too much on power. If I can actually see how much I am using, as I am using it; one, it allows me to make better decisions for myself and my household; two, it also helps to improve the relationship between the consumer and the power provider. We all know that there is sometimes a sense of distress between the two. Even with a meter, you are thinking that your credit is running fast.

Now, it is not even that my credit is running fast. If I turn off this light, I will now see my consumption drop. That breeds a level of confidence and trust.

That is how innovation is changing the culture, the feeling, the sentiment that we have towards power. Power should not be something that is frustrating to Nigerians after shifting the scale of the market.

For the average consumer, can you explain clearly how your technology differs from the traditional metering system?
Between both organisations, we offer quite a vast suite of solutions, but are focused on what the consumer actually sees versus the power companies themselves. For the typical Nigerian consumer, you top up, you buy a token, you punch it in, so you probably have to be in proximity to your meter, or somebody needs to be in proximity to punch it in and it tops up. You know it finishes when the light goes out.

So now, with applications like FlexView, from anywhere, on a phone or a computer, you can see what your credit is on your meter, you can make a transaction to top up your meter there, no need for a token, no issue with error, no token generation, nothing like that, no losing the token pin or all of that kind of stuff.

You get low balance alerts. You can get alerts to let you know about your consumption pattern, meaning before your credit runs out, you are getting alerted three days before, two days before that your credit is about to run out; you are seeing what that balance is, so you can top up or set up auto top up. So once your credit hits a certain amount, you can top up your meter automatically.

Not only that, with the metering experience today, you probably don’t know how much you are using. That is the reason for the feeling of ‘I just topped up this meter and now it is saying it’s finished, something is wrong with my meter’. That no longer has to be the case.

Again, from anywhere in the world, as long as you have access to your phone or a computer or a device, you can actually see in real time what you are consuming, or near real time what you are consuming. So these are some of the key things that consumers will experience differently with our applications.

I think the other thing with FLAG is we do a lot of work with estates. In a joint usage of meters in a community or big flat, dispute can erupt. Now when we work in communities, you can actually have a meter that is metering power that may not be coming from the disco, that is shared among the estate, and splitting that cost in a way that better reflects usage and also prevents you from fighting with this neighbour or that neighbour who is handling collections or deciding who should pay what bill. So, we do a lot of work with helping communities and service facilities better manage power and how shared resources are provided.

How will your solutions improve the electricity management for the underserved or rural development? What benefits are they getting from the solutions?
There are a lot of initiatives ongoing. These are global initiatives, global agencies, organisations like the World Bank who have funding specifically for rural and lower income communities. Think about organisations like the Rural Electrification Agency and the work that they do.

The people and institutions that fund a lot of those micro-grid projects or projects to bring power to rural and low-income communities are doing so oftentimes as an investment. They want to understand the impact of their investment. They want to see the systems working.

For that to happen, you need to be able to do what? Collect payment reliably on time from those consumers, meaning you need a metering solution to make sure that not only are you able to collect payment from the consumers, but also able to gather data about the quality of power, reliability of power that you are deploying and making sure the systems are up and running. We know that maintenance culture is a bit of a challenge in certain regions and certain markets. In collaboration with SteamaCo, which has done quite well over the past decade, not only in Nigeria but across the continent, we are bringing metering solutions to rural and low-income communities. We think that will help foster and provide data and evidence that will continue to drive additional funding into micro-grids for low income and rural communities.