DEMAND SIDE MANAGEMENT

R. Nagaraja
Managing Director

Power Research & Development Consultants Pvt. Ltd.

#5, 11th Cross, WC Road, Bangalore 560 086

Email: [email protected]
www.prdcinfotech.com
 Contents of Presentation
1. Introduction
2. Definition of Demand Side Management
3. Driving Forces Behind DSM
4. Objectives of DSM
5. Benefits from DSM
6. DSM Alternative Techniques
7. End Use Equipment Control
8. Conclusions
9. Discussions

PRDC 2
 Introduction
• El
Electrical
t i l energy - Driving
D i i force
f for
f human
h and
d social
i l
development.

• Most preferred secondary form of energy.

• Widelyy used in the community

y because of its flexibility,
y,
its ease of application.

• Efficient, versatile, convenient, and relatively safe and

pollution free source of energy.

• Essential component for achieving the goals of

sustainable development.

PRDC 3
 Introduction (Contd..)
• Electrical energy consumption
– Closely linked with economic growth
– Closely
Cl l linked
li k d with
ith population
l ti
– Closely linked with other infrastructure
related growth

• Per capita consumption of electrical

energy
– In developed country – Around 2000 units
per annum
– In India – National average of about 700 units
per annum.

PRDC 4
 Introduction (Contd..)
• It has been well recognized that energy is
crucial to human sustenance and
development.

• Further, the role of energy in ensuring a

sustainable future for a rapidly increasing
world population needs balanced view of
the galloping demand, depleting energy
sources renewable energy and protection
sources,
of the environment.

PRDC 5
 Introduction (Contd..)
• T
To meett an ever-growing
i demand
d d for
f electrical
l t i l energy,
generating plants of all types like thermal, nuclear,
diesel etc, are being installed.

• However, fuel resources for these generating plants are

limited and are not renewable.

• Further, uncertainties in fuel availability, high fuel

prices, and concern for environment puts a crimp on
i t ll ti off new generating
installation ti plants.
l t

• As new power plants are expensive, meeting electricity

needs
d onlyl by
b the
th creation
ti off an additional
dditi l generating
ti
capacity becomes a very costly affair.

PRDC 6
 Introduction (Contd..)
• IIt is
i in
i this
hi context that
h the
h role
l off energy
efficiency and conservation is given enormous
importance.
p

• Energy efficiency in energy production,

transmission and efficient end
end-use
use is one of the
elements in the entire strategy of meeting rapid
increase in the demand for electricity.

• Several studies have indicated that there exists

enormous potential for improving the efficiency
in end-use of energy by adopting Demand Side
Management (DSM).

PRDC 7
 Introduction (Contd..)
• Demand Side management
g is an alternative
option for traditional supply side Planning.

• DSM option can offset the high costs, adverse

environmental impacts and increasing public
concerns related to the existing and
construction of new energy facilities.

• DSM refers to co-operative activities between

the utility and its consumers to implement
options
ti tto modify
dif consumer loads
l d with
ith
resulting benefits to the consumer, utility and
society as a whole.
PRDC 8
 Definition - DSM
• Demand side management is defined as
tthose
ose act
activities
t es o
oriented
e ted to
towards
a ds
influencing consumer’s use of electricity
y that will p
in ways produce the desired
changes in load shape.

PRDC 9
 Definition – DSM (Contd..)
• DSM iinvolves
l a partnership
t hi bbetween
t utility
tilit and
d its
it
consumer.

• The concept of DSM in power systems involves both the

utility and the consumer for optimal utilization of
available resources.

• It imposes a utility –consumer relationship that

produces mutually beneficial results.

• DSM comprise the manipulation and control of energy

use by a consumer to achieve benefits for the energy
supplier,
li the
th consumer andd the
th community it att large.
l

PRDC 10
 Driving Forces behind DSM
• The continuing rise in the cost of electricity.

• Activities by consumers to gain more control of

their costs

• Competition from alternative energy sources.

• E
Environmental
i t l barriers
b i to
t site
it new generating
ti
plants.

• Huge capital investment for building new

generating plants.

PRDC 11
 Objectives of DSM
• DSM activities focus on deliberately changing
the load shape, so that consumer demand for
electricity can be met more efficiently.

• Load shape objectives

– Peak clipping
– Valley filling
– Load shifting
– Strategic conservation
– Strategic load growth
– Flexible load shape
PRDC 12
Peak Strategic
Clipping Conservation

Strategic
Load Growth
Load
Shifting
g DSM
Categories

Valley
Flexible
Load Shape Filling

PRDC 13
 Peak clipping
• Peak clipping means the reduction of peak load
using direct load control.

• Utility tries to control the consumer’s

appliances directly.

• Direct load control can be used to reduce

operating cost and dependence on critical fuels
by economic dispatch.

• Peak clipping is also achieved by interrupting /

curtailing rates for industrial and commercial
consumers.
PRDC 14
 Valley filling
• Valley filling encompasses building off-peak
loads.

• This may be particularly desirable for those

times of the year where the long-run
incremental cost is less than the average price
of electricity.

• Adding properly priced off-peak load under

th
those circumstances
i t d
decreases th average
the
cost to consumers.

PRDC 15
 Load shifting
• Load shifting means shifting of loads
from on peak to off
off-peak
peak periods.
periods

• P
Popular
l appliances
li i l d
include use off
storage water heating, storage space
h ti
heating, coolness
l storage
t and
d customer
t
load shifts.

PRDC 16
 Strategic Conservation
• Strategic
St t i conservation
ti i the
is th load
l d shape
h change
h th t results
that lt
from utility-simulated programs directed at end-use
consumption.

• The change reflects a modification of the load shape

involving a reduction in sales often as well as a change in
the pattern of use.

• In employing energy conservation, the utility planner must

consider what conservation actions would occur naturally
andd then
th evaluate
l t the
th costt effectiveness
ff ti off possible
ibl
intended utility programs to accelerate or simulate those
actions.

• Hence, the distinction between naturally occurring and

deliberately induced changes in energy consumption and
load shape
p is important.
p

PRDC 17
 Strategic Load Growth
• Strategic load growth is the load shape change
that refers to a general increase in sales,
stimulated by the utility.
utility

• Load growth may involve increased market

share of loads that are, or can be, served by
competing fuels as well as economic
development in the service area.

• E
Examples
l i l d
include d l fuel
duel f l heating,
h ti h t
heat
pumps, and promotional rates.

PRDC 18
 Benefits for Electricity Supply Industry

• Deferral of investment in new generation,

transmission and distribution assets.

• Increased efficiency of utilization of assets.

• Availability of new business opportunities in

the delivery of demand management programs.

• Improved relationship with the electricity

supply
pp y industry’s
y stakeholders. ((Electricityy
customers, local government, state
government)

PRDC 19
 Benefits for Electricity Supply Industry

• Increased ability by the industry to respond to

likely future changes in technology
technology, community
attitudes and government policy.

• Load shifting, peak clipping where improved

utilization of generating plants is achieved by
shift of electrical load from p
peak to off-peak
p
periods.

• Reduced
R d d use off critical
iti l fuels.
f l

• Improved load factor.

factor
PRDC 20
 Benefits for Electricity Consumers
• IIncreased
d efficiencies
ffi i i ini electricity
l t i it end-use
d l di to
leading t
reduced operating costs.

• Reduced electricity costs, leading to lower prices for

electricity and energy services.

• Increased variety of electricity tariffs available including

time of use tariff.

• Increased range of energy service available.

• Helps to maintain life style

style.

• Reduced unscheduled interruptions of power supply.

PRDC 21
 Benefits to Society

• Reduced environmental impacts from

electricity generation,
generation transmission and
distribution works.

• Increased economic viability of industry,

commerce and d households.
h h ld

• Increase range of energy services

available.
PRDC 22
 End-use Equipment Control
• Thi
This is
i one off the
th mostt active
ti areas off DSM technology
t h l
development.

• The majority of the work is in residential area through

commercial and industrial consumers are sharing
interests in DSM.

• This is because some of the residential loads exhibit

the poorest load shapes so that there is more room for
i
improvement. t

• For most suppliers they are also the largest consumers

off power. This
Thi also
l allows
ll the
th supplier
li tot obtain
bt i larger
l
blocks of load control. These reasons have forced most
suppliers to look at residential loads first for
improvement through DSM techniques
techniques.
PRDC 23
 Utility Equipment Control
• IIn mostt cases when
h utilities
tiliti thi k off DSM alternatives
think lt ti th
they
think in terms of control over the consumers’ equipment.

• However, there are also a few controls on the supplier

However
equipment, which should be considered as a part of a
comprehensive DSM program.

• These items are such things as voltage reduction, power

factor control and feeder control.

• But, all of these items are controversial to a certain degree.

• Voltage
g regulation
g for example,
p , has been opposed
pp by
y many
y
consumers, because most of the consumer appliances are
voltage sensitive.

PRDC 24
 Energy Storage
• Energy storage is one of the first energy
conservation and load management techniques
identified.

• Energy storage techniques operate equipment

t provide
to id storage
t d i
during off-peak
ff k periods
i d and d
utilize that stored energy during peak periods.

• The concept of energy storage is very simple.

The most effective programs in this area have
been cool storage systems for large
commercial buildings, which supply only a
portion of the cooling requirements.

PRDC 25
Role of Energy Storage
 Incentive rates
• Incentive rates are probably the most important
ingredient in most DSM alternatives.

• The idea behind providing incentive rates is to

attract consumers to participate various DSM
alternative programs.

• Incentives can be provided either in the form of

monetary benefit or in the form of energy
compensation.

PRDC 27
 Incentive rates (Contd..)
• Since the birth of the DSM movement among utility
companies, many innovative rate designs have been
developed.
p

• Rates such as time differentiated interruptible, end-use,

load control contracts,
contracts spot pricing demand,
demand rebates
etc, have been developed and implemented as DSM
alternative.

• In most cases the rate design is tailored to the specific

needs and operatingg conditions of the supplier.

• The utility rate department specialists usually provide

the rate design
design.
PRDC 28
 Dispersed Generation
• Dispersed generation as a DSM alternative can
come in many forms.

• Alternatives such as wind generation, solar

systems stand-by generators,
systems, generators co-generation
and similar types of independent generation
sources can be implemented or co-ordinated by
utility to meet DSM objectives.

• U
Under
d th
the system
t critical
iti l conditions,
diti non-
conventional energy sources are made use of
to meet the demand.
PRDC 29
 Consumer DSM Promotions
• The purpose of dispersed generation sources
is to provide a source of capacity to the utility
for use duringg the periods
p of system
y
emergency or during critical load periods.

• Th
The DSM benefit
b fit to
t the
th utility
tilit off these
th sources
is that it will provide to the utility as an
additional source of generation reserve.

• Dispersed generation involves energy sources

which are base loaded,
loaded however the utilization
of stand-by generators has been demonstrated
as an effective DSM alternative.

PRDC 30
 Performance improvements
• The development of electric equipment and processes which
provide improved performance in the form of more efficient
operation or utilization of energy, has been through out as a
viable new technology field for DSM.

• This movement was prompted primarily by the rapidly

increasing cost of electric and other forms of energy.

• The initial cost of such equipment is much higher as

compared to conventional design.

• In order to successfully implement this type of equipment, it

must generally show a payback of less than five years for
the incremental cost of the energy-efficient equipment over
and above the traditional designs.

PRDC 31
Case Studies
 Domestic Sector
• Available Technologies
– Energy efficient Lamps
– Alternate strategies in cooking & Heating
• Electricity to gas
• Gas to Solar?
– Improvement in Refrigerators & Air
co d t o e s
conditioners
 Domestic Sector
• Barriers
– High initial capital cost for alternate design
– Mass production & Application
• Incentives ?
• Currentlyy some ESCOMs p provide 25ps/unit
p for a
maximum of Rs.25 for domestic installation which
have installed solar water heaters
• Some ESCOMs are promoting branding of energy
efficient lighting program
 Agriculture Sector
• Technologies
– Energy efficient pumps
– Use of Solar energy for pumping
– Use of friction less pipes
• Barriers
B i
– No incentive for consumers to change as
energy is
i available
il bl att llow or nilil costt
 Solar Power for IP Sets
• Solar power for IP sets usage makes sound
economic sense for both Agricultural consumers
as well as Utilities
• Solar Dish System Cost Economics shows a
encouraging results
• Cost/kWh for mass produced Solar system
would range from Rs.4 to Rs.1.30 depending on
the
h GGrant portion
i
 Advantages
• Agricultural consumers need to pump
water mostly when the sun shine is good
• During low sun period & monsoon
monsoon, there is
no need for pumping water
• India
I di iis gifted
ift d with
ith ample
l sunshine
hi iin
particular in Southern Peninsula
 Conclusions

‰In this lecture, importance of the

demand side management, different
demand side techniques are discussed.

‰Depending on the consumer mix, nature

of load, appropriate demand side
management techniques need to be
used,
d b
basedd on t h
techno-economic
i
considerations.

PRDC 38
Discussions

PRDC 39
Th k You
Thank Y