Vijay Sonavane, Former Member (Tech) MERC Mumbai and Former Director (Projects) MSEDCL Mumbai, shares his views on how effective DSM can give traction to energy savings in India. In conversation with AEEE

Sonavane picDemand Side Management (DSM) in the Western world is treated as a first-fuel. In India, do Regulators really believe that DSM can provide the necessary grid support making it a reliable option?

In India, we have over 200 Million electricity consumers. The basic issue faced by Discoms in India is “Providing 24×7 reliable, quality electricity supply to consumers at an affordable price”.

Yes, I sincerely feel that Regulators in India do believe that DSM can provide the necessary grid support making it a reliable option. In fact, the role of a Regulatory Commission in DSM programs is that of a “Catalyst”, helping the electricity consumer and the Discoms, in saving energy. Let me give some examples of Regulatory Efforts in DSM:

  • Almost all Regulators in India have initiated the “Time of the day (TOD)” tariff or “Time of Use (TOU)” tariff, giving energy intensive consumers, an option, to shift the non-essential energy usage to the night off peak period. In 1998, Kerala was the first state in the country giving TOD tariff option for their HT Industrial consumers.In Maharashtra, MERC started TOD tariff from May 2000 for HT consumers. Presently, all consumers with sanctioned load of more than 20 KW, have an option of TOD Tariff.
  • Many Regulators are approving the Capital Investments for System Improvement (SI) schemes for separate Agricultural feeders.
  • About 17 Regulatory Commissions have issued DSM Regulations.  As mandated in the DSM Regulations, many Discoms have established in-house DSM Cells. All states are taking an active part in “National UJALA SCHEME” which is the flagship scheme of Ministry of Power, Govt of India. As of 8th May 2017, the Energy Efficiency Services India Limited (EESL), with the help of State Discoms, has distributed over 23.3 Million LED LampsAdditionally, in UDAY, DSM has been included as an Action Point.

In view of the rising cost of fuel and in order to reduce the effect of carbon footprint, DSM in the Western world is treated as first fuel option. I feel that DSM in our country is in a nascent stage. All Regulatory Commissions are trying to push DSM. In the next decade, clearly, DSM will be treated as first fuel option in India, also; not only by the Regulators, but also by all stakeholders in DSM.

Despite over 17 states having DSM Regulations, the implementation has been minimal. What are the causes of such a meagre implementation record in India?

The main issue with Indian utilities is that the consumer density (No. of consumer/Sq. Km) is very low in rural areas and also in semi-urban areas. Reaching out to each consumer, convincing her about the energy savings and making her a part of the utility DSM programme; is a herculean task and it takes a long time.

Even in a progressive state like Maharashtra, the average consumption of a domestic consumer (FY 2015-16) in MSEDCL area is only 94 Units/month (ref: MERC: MSEDCL MYT Tariff order dated 3rd Nov 2016). On an average, a domestic consumer uses 3 Units in a day. Convincing such a consumer, who has less potential for energy saving, is a time-consuming task. Such consumers normally are not ready to purchase new costly energy efficient equipment, due to high equipment costs. The savings in such customers’ cases are in a few KWH. In fact, the investors & Utilities would like to go in for DSM programmes, having MU scale savings.

Even in Mumbai (having better consumer density), where an average domestic consumer uses about 250 Units/month and where consumers are well versed about energy savings & energy efficiency programmes, the time taken for a DSM Programme by a Mumbai utility for replacement of 50,000 vintage ceiling fans consuming 80-105 Watts by 50 Watt 5-star Energy Efficient ceiling fans was over two years.

It may again be stressed that the role of Regulatory Commission in DSM Programmes is that of a catalyst. The main job has to be carried out by consumers, the sales agencies of Energy Efficient Equipment and the Discom employees in the field. Let us also look into the basic reasons for non-deployment or slower progress of DSM Schemes in India:

  • The Utility Personnel always feels that in case the energy intensive Industrial or Commercial consumers (who are basically the cross subsidizing consumers) reduce their consumption through DSM programmes, the utility revenue will come down.
  • It is also noticed that in some Discoms, there is lack of clarity about obligation of Utility staff as there is an absence of clear guidelines by the utility for proper implementation of DSM Schemes/ Programmes.
  • In the Government. owned Discoms, the number of consumers is growing consistently by 6-8% every year. Discom staff has many other important activities to be performed which include releasing new connections/ attending Supply Interruptions/ Metering Billing and Revenue Collection (Revenue functions). There is no separate staff at field level for DSM works.
  • There is a lack of public awareness, hence lesser participation by the consumers, in DSM programmes. The need of the hour is propagating public awareness on Energy Efficiency particularly for house wives and students in Schools and Colleges.
  • In many states, the retail tariff is going up by 4-5% every year. The consumer is purchasing more and more electric appliances/ gadgets, year on year and hence due to increased consumption; the consumer’s energy bill is rising, even if some DSM initiatives are taken by him at his home. There is no clarity on financial incentives to consumers because of the rising energy tariffs. Moreover, the Measurement & Verification (M&V) of the results from implementation of DSM is a very difficult task. So, ultimately the response from consumer is weak.

Even with strong efforts by almost all stakeholders, inefficient electrical gadgets are available in the market, and customers purchase them, because of the low initial cost of such equipment. The government needs to put a complete ban of production of inefficient electrical gadgets/equipment, so that only energy efficient gadgets are available in the market. One method might be to impose a very high tax on such inefficient equipment, so that efficient equipment are available, at a comparatively lower overall cost.

What’s more important for the Indian utilities: conservation or load management?

Having served the Maharashtra Utility for over 33 years and in Regulatory Commission I sincerely feel that in the present scenario for almost all government utilities in country, load management is a more important issue.

Let us take the case of a typical state. The average consumers per sq. km. are say less than 100. It is important for a utility to first supply power to the consumer at the farthest end. So, maintaining the reliability (continuity of supply) and quality of power (Voltage and frequency) is the main responsibility of the utility.

At times (particularly during summer season), the availability of power may be less than the demand for power. Due to financial constraints and rising prices of power in the power market, the Discoms are unable to meet the demand. So, in order to maintain the Grid Discipline as envisaged in the Indian Electricity Grid Code (IEGC), the load curtailment (Load Management) has to be resorted to, by the utility.

So, to conclude, the Load Management is the Primary Choice (having fast response) resorted to by the utility in case demand exceeds availability, but Energy Conservation or DSM (having slower response) is also the second most important tool to effectively manage power shortage situation . Demand Response particularly is a useful tool for load management. In Mumbai, a Pilot Demand Response scheme was initiated by a utility, in order to avoid high cost peak power purchase and the consumers help the grid by reducing their electricity demand were given an incentive. The scheme was approved by the Maharashtra Regulators.

Is there a need to support a Regulatory process to commission a separate institutional mechanism to implement DSM options?

I feel that in order to accelerate the process, yes, there is utmost need to have a separate institutional mechanism to support DSM implementation not only for the Regulatory Commissions but for all the stakeholders in DSM space.

I sincerely feel that involvement of customers, Energy efficient Equipment sales personnel and utility staff is utmost necessary in this institutional mechanism for implementing the DSM options.

EESL is helping the DISCOMs in distribution of Energy Efficient LED lamps and Energy Efficient Fans to the customers. EESL brings the benefit of low price due to bulk purchase,. Purchase of lamps, and quality control are being taken up by EESL, which relieves the DISCOMs and hence a faster implementation of UJALA Scheme could be taken up.

The progress of UJALA scheme clearly indicates that for executing the various DSM Programmes, having a separate institutional mechanism helps all stakeholders in DSM space.

Can the Regulators evolve an EEPO process similar to RPOs? Can DISCOM include EEPOs as a part of their PAT compliance and if yes, what are the conduits to achieve such a process?

Yes! The idea of EEPO process similar to the Renewable Purchase Obligation (RPO) will really help to speed up the DSM Programs in our country. In this case, I feel an organisation like Forum of Regulators needs to take the lead and prepare “Model Draft Regulations for EEPO”.

Inclusion of EEPO by Discom in their PAT Compliance is definitely a good idea, which is bound to promote Energy Efficiency and Demand Side Management Programmes, in various States.

We need to have basic regulations for this concept. It may be mentioned here that unless there are proper enabling regulations on any issue, the Pan-India implementation and progress on that issue is somewhat difficult. Hence there is a need of “Model Draft Regulations for EEPO”.

There is an urgent need to move from KW level Pilot DSM schemes to MW level DSM Projects or on Energy savings front, from KWH level to MU level. The EE/DSM training programmes for all stakeholders, institutional mechanisms for DSM Schemes and EEPO will definitely speed up the DSM projects in India.