1. Role of Demand Side Management from Utility’s Perspective K. Ramanathan Distinguished 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

2. 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 paceSupply 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

3. 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

4. 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

5. 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 India Concern: Impact on revenues

6. DSM Process Chain Load research: The basic starting point - A critical activity Regulations

7. 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 Research Study 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

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

9. 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

10.  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 for Innovative 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

11. 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

12. Key Stakeholders & Their Roles Utility Government Regulator Financing 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

13. 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

14. 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!