Role of Demand Side Management from Utility’s Perspective

K. RamanathanDistinguished Fellow, TERI

The Energy and Resources Institute

Regional Workshop on ‘Innovative and Sustainable Energy Technologies for Developing Countries:

Opportunities & Challenges Taj Mahal Hotel, New Delhi 29 May 2014

Challenges on the Energy Front

Availability & fluctuations in fuel prices

Growing carbon footprint

Environmental & social issues

Energy pricing

Access to technology

Mobilization of finances

IEA Electricity Demand Projections

Demand rising at fast pace Supply lagging behind

Main issues:

Need to manage demand ensuring at the same time adequate and reliable supply of power to all at affordable rates and growth of economy

India: 300% increase in demand in next 20 years

Actions beyond the point of supply designed to change the amount and/ or timing of the customers’ use of electricity

What is Demand Side management (DSM)?

Now seen as an important element of Integrated Resource Planning

Objectives of DSM

Reduction of load during peak hours

Improve LF by adding load in off-peak hours

Alter load on as –needed basis (interruptible/ curtailable )

Increase of loads, during all or most hours of the day

Reduction of load during all or most hours

Peak load reduction & add off-peak

Scope of DSM has evolved over the years. Relevance to the utility has also increased manifold

Relevance to Utility

* Mitigate power shortages

* Improve access

* Improve quality of supply

* Manage power purchase costs

* Minimize GHG emissions

* Ensure better asset utilization

* Defer capital investments

* Regulatory compliance

Power shortages in IndiaConcern: Impact on revenues

DSM Process Chain

Load research: The basic starting point - A critical activity

Regulations

Domestic - City Commercial

* Significant daily & seasonal variations* Large variations between different consumer categories* Patterns vary widely between different cities and rural areas* Patterns getting influenced by changes in economy, life style & climate

Load ResearchStudy of load pattern over the day and across seasons at system level and of different consumer categories

Illustrative example of a study in one of the Indian States

Most common: Promotion of EE appliances & processes; ToD/ ToU tariff, awareness campaigns, etc. Solar applications gaining interest. DR more recent

Some Typical DSM InterventionsSector Interventions

DR in Kitakyushu Smart Community Project (Japan)

Experiment to test dynamic pricing of electricity in 2012

Day is divided in 4 time periods; 5 levels of pricing ranging from 15 Yen

to 150 Yen per kWh during peak

196 households 2 groups. 127 subject to dynamic pricing; 69 excluded

Prices level 2-5 when max. estimated temp >30 C (weekdays in

summer) & min. temperature <5 C (weekdays in winter). Level 1 on

weekends & holidays

Customers notified around 3 pm on previous day & morning through

smart meters

Dynamic pricing led to peak time demand cuts varying from 9% (with

Level 2) to 13% (with level 5)

9000 Yen distributed to participating customers (deducted when bill goes

higher than existing so as to ensure comfort)

Consumers soon found it attractive; some easy life style changes

Tata Power load dispatch decides

the event call based on Ex Ante

price/ transmission constraints and

an aggregator connects with the

consumers

Event is of max : 2 Hrs each ; 50

events per year

Meter data is down

Tata Power pays incentive to

aggregator and the aggregator pays

to each consumer as per his

curtailment. loaded from AMR/ Hand

held meters

A participating consumer receives

Rs 2.25/KWh saved, which is less

than the peak power purchase cost

Source: Shekhar Khadilkar & Deepak Bhise; Presentation forInnovative Energy Saving Product/ Service category Demand Response Programme

Demand Response Experiment in Mumbai (India)

A voluntary program by Tata Power for commercial & industrial consumers with total load above 500 kW

Awareness & capacity Building Campaigns

Connecting with consumers and getting their participation/ acceptance a key to success of any DSM program

TERI’s engagement with school children

Key Stakeholders & Their Roles

Utility

Government RegulatorFinancing

agency

ESCO/ Energy

auditors

Research & consultancy

Organizations

Policies, facilitate funding

Regulations, approval of programs & enforcement

Part funding support

Support implementation

Support in load research, preparation of DSM plans, capacity building, etc.

Media (visual & print) can also play a key role in supporting the initiatives

Manufacturers/ suppliers of EE can also contribute to the efforts

Common Challenges

* Lack of data on consumer category-wise load

patterns

* Capturing emerging trends in consumer behavior

* Costs benefit analysis (ex-ante & ex-post)

* Financing support

* Dearth of ESCOs

* Relative priority of utilities

* Lack of consumer engagement & awareness

* Design of time-differential tariffs

* Regulatory weakness

Thank you !krnathan@teri.res.in

End Note

DSM seeks to promote efficient energy usage benefitting the utility and consumers at large and not this!