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Demand Side Management: Concept, Need and scenario.

The imperative logic of Demand Side Management

• A better use of resources equals lower cost for service.

• A balanced use of resources means a more secure and reliable energy supply.

• An expansion for products/services using less energy (using more wisely) is an injection for future business.

• A step change in improved energy efficiency is the only way to achieve wide-spread welfare without resources depletion

What is Demand Side Management ?• DSM is universal and does not only apply to utilities,

electricity or monopolies• DSM encompasses the entire range of management

functions (planning, evaluation, implementation and monitoring)

• DSM = Large-Scale Deployment of Energy Efficient Equipment by use of specially designed Programmes

The issues!• Load level – a wasteful demand requires too much supply for the

specific needs • Load shape – high peaks, – little reserve capacity, – Bottle necks in transmission and distribution

• Market responsibilities – who is the owner of the problem?

Strategicgrowth

From this StrategicSaving

To This

Or tothis

DSM can change the LOAD LEVEL

Adapts the system to the environmental requirements

From “carbon-fat” to carbon-lean

PEAK

SHIFT

VAL

LE

Y

DSM can Change the LOAD SHAPE

Adapts the load to the capacity of the system

Winter Summer Winter orDay Night Day

Before

After

The smart grid

Source: An EPRI Initiative to Advance the Efficient and Effective Use of Energy

New Technologies

APPROACH TYPE EXAMPLEMandated Standards Minimum performance

(MEPS) Top-runner standard

“Agreed Actions” Voluntary Agreements Technology Procurements

Delegated Actions By actor Regional bodies Municipalities

By Means Commitments Certificates

Market Acceptance

Price-responsive customers Taxes; Tax reduction Price elasticity (Demand

Response)Non-price responsivecustomers

“Commoditising”energy efficiency

Energy Services (ESCO) Labels

Policy drivers

Climate • Strong policy-drive gives many opportunities

to find support for focused programmes, especially when fossil fuel is targeted and renewables promoted

• Crosscountry activities in e.g. CDM• Emission rights trade and carbon taxes provide

financial incentives

Energy Efficiency is the first step on the road to sustainability

Supply

High Density (e.g. fossil, nuclear)

Low Density (e.g. solar, wind, bio)

End-

Use

of E

nerg

y

High Efficiency (Low Intensity) e.g. CFL and LED lighting; Adjustable speed drives

UNECONOMICAL

SUSTAINABLE

Low Efficiency (High Intensity) e.g. Incandescent lamps, Direct electrical heating

PRESENT SYSTEM

HARDLY FEASIBLE

Energy Security

• Fuel and system diversification is increasingly important and is coupled to use of distributed generation

• Supplier market position and demand elasticity is an issue with policy implications (windfall profits)

Industry development

• The ongoing crisis gives policy incentives to develop new industries, especially related to ”smart grid” functions

• Job creation• Changes requires new partnerships where

technologies meet market skill

Succes at last!?• Today the UN-FCCC supported by the UNDP

and the General Secretary of the UN will declare that DSM will be mandatory in all countries from 2010!!

• Remember todays date!!

•APRIL 1st, 2009

Is sustainable growth possible…

..without DSM ?

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WHAT IS DEMAND SIDE MANAGEMENT?

• “Demand Side Management” is the modification of consumer’s demand of electricity through various methods such as financial incentives and consumer education.

• Usually the goal of DSM is to encourage the consumers to use less energy during peak hours or to move the time of energy use to the off-peak hours viz. night

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UNDERSTANDING DEMAND AND SUPPLY

Q) Who Demands electricity? A) The consumerQ) Who will manage demand for electricity by

the consumers? A) The Service provider with equal participation

from the Consumer.

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Need for Demand Side Management• Saving 1 unit of electricity at consumer end

avoids nearly 2.5 times of capacity addition.

• 1 MW capacity addition of thermal power requires Rs 6 crores for installation and another Rs 3 crores for Transmission and Distribution system.

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Need for DSM …..(contd.)

• Increasing energy requirement.

• Increasing threat of climate change and other environmental considerations.

• Energy security.

• Lack of other supply options.

• Huge scope for energy efficiency measures.

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Demand is minimum between 12 a.m. and 6 a.m.

Demand is huge between 5:30 p.m. and 9:30 p.m.

Peak Demand at 7.30 p.m. Since – Full Lighting load, and

other Commercial and Domestic loads

Usual Load Curve of an Utility for a 24 Hour period

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Observations• The peak demand of 4,300 MW is there for only

5-6 hours in the evening.

• The base demand is 3,000 MW, which is much less than the peak demand of 4,300 MW

• To meet the extra demand utility has to arrange additional installed capacity or purchase power at high rate

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Observations …..(contd.)• Thus utility will always try to encourage

consumers to:

– Use less energy during Peak hours (Peak Clipping)

– Shift energy use to off peak hours (Valley Filling)

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Therefore consumers too have a very important role to play for achieving the objectives of DSM

DSM

Utility

Consumer

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HOW TO DO Demand Side Management?• To charge higher prices during Peak Hours.

• Improving the efficiency of various end uses by using energy efficient appliances, better house keeping and reducing energy leakages. This is important for agriculture where energy efficiency is very low (30-50%)

• Promoting use of Energy Efficient Technologies and addressing Aggregate Technical and Commercial (AT&C) Losses

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Benefits of Demand Side Management

•

Customer Benefits Utility Benefits Society Benefits

Satisfy electricity demands Lower cost of service

Reduce environmental degradation

Reduce / stabilize costs or electricity bill

Improve operating efficiency,Flexibility

Conserve resources

Maintain/improve lifestyle andproductivity

Improve customer service

Protect global environment

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Present Scenario in West BengalMajor utility Service

ProviderPeak Load

WBSEDCL 4,600 MWCESC 1,700 MW

Type of Consumer Percentage of Electricity usage under WBSEDCL (2011)

Domestic 30.3%Commercial 14.07%Agriculture 10.25%Industrial 35.93%Others 9.36%

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Actions undertaken by WBSEDCL in West Bengal

• Time of the day( TOD) meters for Industrial and Agricultural consumers.

• 173 sodium vapour lamps replaced by LED

• Energy Audit undertaken in Government buildings and corrective measures are being undertaken

• Waste Heat Recovery in some industries undertaken

• Bachat Lamp Yojna