Utility CEO Forum on DSMdsm-india.org/wp-content/uploads/2016/06/Presentation... · 2016. 6. 20. · Market Investment potential (Rs crore) MW Perform Achieve and Trade 30,000 5623

Utility CEO Forum on DSM

Barriers and Enabling Mechanisms for

Advancing Megawatt scale DSM

Programs in India 27 February 2013

1 Rationale for DSM by Indian Electric Utilities 1

2 Introduction to DSM and Current Status 4

3 Barriers And Enabling mechanisms for advancing megawatt scale DSM programs in India

9

Page Section

Table of Contents

27 February 2013

Section 1 Rationale for DSM by Indian Electric Utilities

1

Utility CEO Forum on DSM •

27 February 2013

Indian Electricity Sector and Financial health of Utilities

Delhi Haryana Punjab Uttar

Pradesh Gujarat Maharashtra Karnataka

Andhra Pradesh

Tamil Nadu

Energy Deficit % 0.3% 3.6% 3.1% 11.4% 0.4% 16.7% 11.2% 7.2% 10.5%

Peak Deficit % 0.1% 4.2% 16.9% 3.5% 1.8% 22.1% 17.4% 14.0% 14.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

State-wise Power Shortage Scenario

National Electricity Supply-Demand Scenario

Parameter Energy (MU) Peak Demand

(MW)

Requirement 936568 130250

Availability 857239 115847

Deficit -79329 -14403

Deficit % 8.5% 11.10%

Section 1 – Rationale for DSM by Indian Electric Utilities

2


2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

Revenue from sale of power, subsidies and

grants less the Expenditure

-26957 -27760 -27549 -27209 -26565 -25626 -24164 -22110

-30000

-25000

-20000

-15000

-10000

-5000

0

INR

Cro

res

Revenue Gap Projections for SEBs

Source: Shunglu Committee Report on Financial status of SEBs across15 states, 2011 Source: CEA Statistics April‟11-March‟12

27 February 2013

Why Demand Side Management? Key Drivers for DSM

Power Shortage Mitigation

International experience suggests that DSM can be successful in acquiring cost effective resources for bridging demand supply gaps

Revenue Optimisation

Utilities worldwide have adopted DSM to minimise losses in a sustainable approach

3

Section 1 – Rationale for DSM by Indian Electric Utilities


Today, the Indian Utilities are facing unprecedented power shortages coupled

with worsening financial health. Therefore DSM has never been more

important than it is now.

27 February 2013

Section 2 Introduction to DSM and Current Status

4


27 February 2013

DSM Investment Potential ~ INR 74000 Crores

Source: BEE

GHG Abatement Potential from Energy Efficiency in

Power Sector ~ 1 billion Tonnes CO2e

Source: McKinsey, 2009

37%

2% 4%

32%

25%

Agriculture Pumping

Commercial Buildings (> 500 KW)

Municipalities

Domestic

Industry (Including SMEs)

Sector Consumption

(Billion Units)

Saving

Potential

(Billion Units)

Agriculture Pumping 92.33 27.79

Commercial Buildings (>

500 KW) 9.92 1.98

Municipalities 12.45 2.88

Domestic 120.92 24.16

Industry (Including SMEs) 265.38 18.57

Total 501 75.36

Source: National Productivity Council, 2009

DSM Potential in India

Section 2 – Introduction to DSM and Current Status

5


Market Investment potential

(Rs crore) MW

Perform Achieve and Trade 30,000 5623

Demand Side Management 44,000 14335

Industrial 12,100 7 000

Generic energy efficiency 4,200 3 400

Process energy efficiency 7,900 3 600

Commercial 570 553

Government-owned offices 340 360

Government-owned hospitals 85 140

Privately owned hotels 145 53

Municipal 1,300 1 688

Agriculture 30,000 5 095

27 February 2013

Load Management

TOD Tariffs/Power factor incentives

Feeder segregation/bifurcation/up-gradation

Smart Metering

Demand Response

Administrative Measures

Establishing Energy Conservation Fund,

Modify procurement process of Govt./Public sector

DSM Regulations

Educate school children about energy conservation

Tax/Fiscal Incentives for purchase of EE equipment

Demand Reduction through enhanced penetration of energy efficient technology, equipment and appliances

Better housekeeping, correcting energy leakages, system conversion losses, etc

Energy efficient technology penetration

Motors, Pumps, Solar water heaters, LED lights, T5 lamps, Ceiling Fans, Refrigeration, TV, Space Cooling, Combined heat and power systems, roof top solar PV etc.

DSM Strategies & Opportunities


6


27 February 2013

Current status of DSM programs in India


7


This assessment is based on the survey of 73 DSM programs across 20 Major Utilities (both private and state

owned) in the country.

Type of DSM program Current Status

Load Management Programs

TOD Tariffs Most of the states (only in HT consumers)

Power Factor Incentive Most of the States

Feeder Segregation Some states have implemented in large scale

(In many states the program is still in pilot stage)

Demand Reduction Programs

Energy Efficiency Equipment Rebate Most of the states have undertaken CFL distribution in large scale

Gujarat, Tamil Nadu, Madhya Pradesh, Karnataka, Delhi, Maharashtra

have other equipment rebates in pilot stages

Demand Response Only in Pilot stage in Maharashtra

Other Planning and Awareness Programs

Load Research and Market Research Studies Maharashtra, Delhi, Tamil Nadu, Gujarat, and Himachal Pradesh

The existing DSM programs in India have largely remained in the form of pilot projects and

Indian Utilities are yet to upscale/transform these programs into megawatt scale.

27 February 2013

Current status of DSM programs in India Cont...


8


CFLs 35%

T5 8%

Refrigerator 8%

Split AC 11%

Ceiling Fans 8%

Ag pump sets 19%

LED hoardings and street

lights 11%

Equipment profile for rebate programs in India

Standard Offer (Ag

DSM) 2%

Rebate programs (CFL and

other equipment)

46%

Direct Install programs (feeder

segregation)14%

Upstream Programs

(load research)

5%

Price Responsive Programs

(TOD) 33%

Profile of DSM Program design options adopted by Indian Utilities

DSM in India is still in its nascent stage even though many other countries (like United

States of America, South Africa, China, Australia, Spain) have already witnessed

substantial investments in the last decade.

27 February 2013

Section 3 Barriers And Enabling mechanisms for advancing megawatt scale DSM programs in India

9


27 February 2013

Uncertainty pertaining to the benefits of Utility DSM programs

• Impact of the loss of revenue on DSM benefits

• Variability in marginal power costs, and

• Uncertainty in load shedding schedules

• Capitalisation of DSM investments

Lack of stringent regulatory framework on load shedding

• „Load shedding„ is the most preferred least cost alternative to bridge demand supply gaps in the system

Lack of enabling legal and policy framework for DSM

• No specific /direct provision enabling Utility investments on DSM in Electricity Act, 2003

Poor Financial health of Utilities

Lack of regulations on DSM

• Four states have notified regulations till date

• More states will follow

Lack of comprehensive load research studies

• Stakeholders need to enhance the scope of such studies

Capacity building and institutionalisation of DSM

• Utilities need to frequently review the capacity and resources available with DSM cells

Barriers for megawatt scale DSM programs in India

10

Section 3 – Barriers And Enabling mechanisms for advancing megawatt scale DSM programs in India


27 February 2013

Enhanced legal/policy framework for Utility sponsored DSM investments amended in the Electricity Act, 2003

Strict regulations/laws enabling Utilities to improve reliability by avoiding load shedding

Regulatory framework for capitalisation of DSM investments

Promotion of innovative funding models to implement DSM programs (ESCO model)

Notification of DSM regulations by SERC‟s with stringent methods for EM&V of DSM programs

Technical/Financial Assistance and Capacity Building of Utilities to undertake comprehensive load research

studies

The DSM cells within the Utilities must be empowered with adequate resources and authority to plan and

implement megawatt scale DSM programs

Enabling mechanisms for megawatt scale DSM programs in India

11



27 February 2013

Comprehensive Load research studies

• Primary survey for understanding load profiles of different consumer categories

• Capturing end use appliance contribution in the overall load profile

Best Practise

Load Research Study in Himachal Pradesh by PwC

• Hourly load for a sample of consumers was monitored to develop the load curve

• Primary surveys were carried out in all category of consumers to identify appliance contribution

• Monitoring AMR data collected from four circles (Solan, Nahan, Una and Dalhausie) in summer and winter season

Best Practices (1/4)


12


27 February 2013

DSM Regulations and Institutionalisation

• State commissions must notify regulations in time to enable DSM investments by Utilities

Best Practise

Regulatory Framework for DSM by MERC

• MERC was the first state regulator to notify regulations on 'DSM implementation framework' and 'Cost effectiveness of DSM measures and Programs' in India

• The regulations on Implementation framework covered the procedure and protocols for defining the Eligibility Criteria, Development and Submission of DSM Portfolio and Plans, Responsibilities of the Distribution Licensees Related to DSM Planning and Implementation approval Process for DSM Programme, Portfolio and Annual Work plan, Evaluation, Measurement & Verification (EM&V), Monitoring & Reporting, Methodology for Selection of DSM Programmes to be Included in the DSM Plan, Selection Criteria for other Programmes to be included in the Plan

• The regulations on Cost Effectiveness provide guidance with a consistent set of methods for cost-benefit assessment of DSM measures and programmes



13


27 February 2013

Enabling legal and policy framework for DSM

• Specific provisions to be amended enabling Utility investments on DSM in Electricity Act, 2003

Adequate regulations on load shedding

• Strict regulations and laws that restrict the Utilities to adopt load shedding as the best alternative in challenging demand supply scenarios

Best Practise

California Energy Efficiency Policy

• “Loading order” established that the state, in meeting its energy needs, would invest first in energy efficiency and demand-side resources, followed by renewable resources, and only then in clean conventional electricity supply

• California state law for operation of utilities amended Section 454.5(b)(9)(C), that required all Utilities in California to first meet their “unmet resource needs through all available energy efficiency and demand reduction resources that are cost effective, reliable, and feasible”

Impacts

• 5 billion$ ratepayer funded energy efficiency investments approved by the regulator between 2006 and 2012

• Savings of 1069 MW and 5736 GWh for 2010-12 cycle and 6000GWh and 1175 MW savings for 2006-08 cycle



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27 February 2013

Poor Financial Health of Utilities

• Utilities should explore innovative Public private partnership options to enable investments in DSM

Best Practice

Agriculture DSM pilot project in Solapur, Maharashtra

• First Public private partnership in DSM via ESCO model

• Project Proponent: MSEDCL

• Project Implementer: CRI Pumps

• Timeline: 2011 – In progress

• Scope - 3530 agricultural pumps connected across five segregated agriculture feeders.

• Project cost - INR 706 lakhs (estimated)

• Energy Savings - 5.06 million units (verified)



15


27 February 2013

Thank You

16



© 2013 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, “PwC” refers to

PricewaterhouseCoopers Private Limited (a limited liability company in India), which is a member firm of

PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

Documents

Utility CEO Forum on DSMdsm-india.org/wp-content/uploads/2016/06/Presentation... · 2016. 6. 20. · Market Investment potential (Rs crore) MW Perform Achieve and Trade 30,000 5623