Smart Metering Systems to Change the Dynamics of Electricity Metering in South Africa: Frost & Sullivan

CAPE TOWN, South Africa, February 10 - The electricity metering market in South Africa is facing a period of
significant change due to the implementation of smart metering systems. This
is being driven by demand-side management initiatives and supporting
government legislation, brought about by the national energy crisis.

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"Smart meters will allow for the implementation of time-of-use tariffs
and remote disconnection of household appliances through two-way
communication capabilities with utilities," explains Frost & Sullivan
Research Analyst Ross Bruton. "This is expected to assist in decreasing peak
demand in the country, thereby mitigating the current strain on Eskom's spare
capacity."

New analysis from Frost & Sullivan (www.energy.frost.com), South
African Electricity Metering Market, finds that the market earned revenues of
over US$14.7 million in 2008 and estimates this to reach US$50.5 million by
2014. The smart meter market in South Africa will be experiencing substantial
growth in the next few years through the replacement and conversion of
obsolete credit and prepaid meter technologies. The end users covered in this
analysis are residential, commercial, and industrial.

If you are interested in more information on this study, please send an
e-mail to Patrick Cairns, Corporate Communications, at
patrick.cairns@frost.com, with your full name, company name, title, telephone
number, company e-mail address, company website, city, state and country.

"Smart meters represent the future of electricity metering in South
Africa," says Bruton. "The Electricity Regulations Act of 2006 specifies that
all end-users with a monthly usage of 1000 kWh or more need to be on smart
metering systems by January 2012. Smart meter implementation in the country
is expected to represent substantial revenue growth in the electricity meter
market, as each smart meter unit is significantly more expensive than
traditional credit and prepaid meters."

Although this Act is currently under review, the final document is
expected to have a similar requirement. Eskom and regional municipalities are
therefore legally committed to commence with the introduction of smart meter
systems over the next few years.

However, although smart meter rollouts are expected to be governed by
government legislation, the electricity distributors - particularly
municipalities - have raised concerns on the available funds to implement
these initiatives due to the high equipment cost of smart meter units and
supporting communication infrastructure that will be needed to operate the
smart grid.

"Furthermore, smart meter specifications set out in the NRS 049 document,
for national standardisation of the meters, are still unavailable,
restraining electricity distributors from beginning the sourcing of smart
metering systems," explains Bruton. "Growth in the smart meter market will
also be limited by the availability of funds to electricity distributors."

Several electricity distributors are likely to turn to the government for
financial aid for the smart meter rollout implementation.

"Suppliers should aim to provide NRS 049 compatible meters to electricity
distributors at the most affordable price possible, while continuing to offer
after-sales support in product maintenance, repair, and training," concludes
Bruton. "Such suppliers will be sought after by the electricity
distributors."

South African Electricity Metering Market is part of the Energy & Power
Growth Partnership Service programme, which also includes research in the
following markets: The South African Boiler Market, Electricity Industries in
Ivory Coast, Senegal and Equatorial Guinea, The Sub-Saharan Africa Large
Diesel Generation Markets, Asian Influence in the African Electricity Market,
African Large Scale Wind Turbine Market, Gas Turbines Markets in Sub Saharan
Africa, Key African Power Plant Service Markets, and Mozambican Electricity
Industry. All research services included in subscriptions provide detailed
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extensive interviews with market participants.

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    Contact:
    Patrick Cairns
    Corporate Communications - Africa
    P: +27-18-464-2402
    E: patrick.cairns@frost.com

www.frost.com

Patrick Cairns, Corporate Communications - Africa of Frost & Sullivan, +27-18-464-2402, patrick.cairns at frost.com