cost effectiveness of dsm programmes case studies of...

Cost Effectiveness of DSM Programmes – Case Studies of

EESL

Presentation to 5th Meeting of Utility CEO Forum on DSM

Date: 11th April, 2014

Venue: Delhi

Energy Efficiency Services Limited 1

Cost Effectiveness Assessment of DSM programme -The Regulatory framework

• Model DSM Regulations provide for cost effectiveness assessment of DSM programme. A DSM programme may be categorized as under:-

Type of programme

Distribution of DSM programme Cost Regulatory Approval criteria

Type-1

Distribution Licensee -All the Cost of DSM programme borne by licensee

Cost Effectiveness Index (B/C) > 1

Type-2

Distribution Licensee -The Costs of DSM programme borne by licensee

Consumer-Partial Costs are shared with Consumers

Cost Effectiveness Index (B/C) >1 Cost of Conserved Energy < Avg Tariff

Type-3

Distribution Licensee -The Costs of DSM programme borne by licensee

Consumer- Partial Costs are shared with Consumers

Government -Subsidy Scheme

Cost Effectiveness Index (B/C) >1 Cost of Conserved Energy < Avg Tariff

• Cost effectiveness Index (i.e. Present Value of benefits/Present Value of Cost ) assess the viability from the perspective of distribution licensee.

• Cost of Conserved Energy assess the cost effectiveness from the point of view of participating investing consumers as under:- (i.e. [(Present Value of costs of efficient option X cost recovery factor (CRF) of efficient option - Present Value of costs of inefficient option X CRF of inefficient)/ Annual Energy Saved in kWh]

Energy Efficiency Services Limited

DSM based Efficient Lighting Programme


DELP – Ex-Counter Distribution


DELP SOP-A Case Study

Puducherry-Power Scenario

Total Domestics consumers : 299772

CAGR : 8.77%

Total Sales to domestic Consumers : 564.33 MUs (2013-14)

Projected Sales to domestic Consumers : 613.8 MUs (2014-15)

Increase in Sales : 49.5 MUs

Additional Power Procurement : 59.16 MUs

AT&C Losses : 19%

Targeted consumers : 245000 Nos of residential households

Energy Saving from DELP (at utility end) : 48.33 MUs


COST 1 2 3 4 5 6 7 8 9 10

Initial Investment (Equiity) 6.84

Debt Repayment 1.59 1.59 1.59 1.59 1.59 1.59 1.59 1.59 1.59 1.59

O&M Cost 0.57 0.57 0.57 0.57 0.57 0.57 0.57 0.57 0.57 0.57 Interest Cost @ 12.5% 1.99 1.79 1.59 1.40 1.20 1.00 0.80 0.60 0.40 0.20

Total 10.99 3.96 3.76 3.56 3.36 3.16 2.96 2.76 2.56 2.36

Present Value of Cost @ 15% 10.99 2.99 2.84 2.69 2.54 2.39 2.24 2.09 1.94 1.79 33

BENEFITS

Profits 5.90 5.60 5.29 4.99 4.68 4.37 4.07 3.76 3.46 3.15 Taxes 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0

Total 5.90 5.60 5.29 4.99 4.68 4.37 4.07 3.76 3.46 3.15

Present Value of Benefits @ 15% 5.90 4.23 4.00 3.77 3.54 3.31 3.08 2.85 2.62 2.38 36

Cost Effectiveness Index 1.10

Cost Effectiveness of DELP SOP…..

• Cost of conserved energy is 0.12 and Cost Effective Index greater than one means programme is feasible in the area of distribution licensee.

• JERC approved the project on 5.2.2014 based on the above • Benefit to consumer: Savings of INR 96.45 Crs due to reduction in demand and LEDs at the cost of ICLs • Benefit to DISCOM: Reduction in power procurement of about 47.96 MU per annum equivalent to a savings of INR 30.72 Cr

Amount in Rs. (Cr)


Pump Replacement- (HESCOM & EESL Team ) Pump Replacement- Pump & Panel

Farmers Awareness campaign First Pump Replacement

Agriculture DSM


AgDSM project at HESCOM

Region : Nippani and Byadgi circles

Total Inefficient Pumps : 590 Pumps

Total Savings : 2,991,628 kWh per annuam

Commission Determined Tariff (CDT) : 4.42 per unit

Energy Saving Shared with Utility : 5%

Business Model: Replacement of inefficient pumps of farmers free of cost and the reduction in subsidy used to service EESL investment. Project commissioned on 31.12.2013


BEE- EESL Ag DSM Business Model


EESL: Hubli AgDSM Project

1. No. of pumps replaced – 590

2. Annual energy savings achieved (MUs) – 2.9

3. Energy Savings (%) – 37%

4. Investment by third party – 2.6 Cr.

5. Contract Period – 6 years

6. Annual Reduction of subsidy – 1.01 cr

7. 60% investment by private sector partner

8. Equal sharing of savings

9. EESL taken over revenue risk – technical risk by private partner

Amount in Rs. Cost Effectiveness of AgDSM Project with HESCOM, Hubli………..

COST 0 1 yr 2yr 3yr 4yr 5yr 6yr

Initial Investment 26069782

R&M & Miscellaneous cost (5%) 1303489.1 1303489.1 1303489.1 1303489.1 1303489.1 1303489.1

Total 26069782 1303489.1 1303489.1 1303489.1 1303489.

1 1303489.1 1303489.1

Present Value of Cost @ 15% 26958968.6

BENEFITS

Energy Saving 11,157,071 10,555,871 9,673,184 8,388,431 6,529,434 3,850,321

Total Revenue 11157071.3 10555871.3 9673183.68 8388431.

433 6529433.813 3850321.475

Present Value of Benefits @ 15% 33750827.4

Cost Effectiveness Index 1.25

Based on the success – EESL has been asked to replace about 1.15 lakh pumpsets in Karnataka


Mu- DSM: LED Street Lighting at Naya Raipur, Chhattisgarh

EESL Street Lighting Methodology

• MoU to be signed between Municipalities & EESL MoU

• Detailed walk through energy audit for data validation of existing DPR and Joint Verification

DPR/ Re Validation Of DPR

• To assess actual energy savings and determination of annuity payments and finalising technical specifications

Technology Demonstration

• Agreement to be signed between Municipalities & EESL for implementation.

Agreement

• The Payment security mechanism to be finalized. Payment Mechanism

• EESL will implement the project based on own resources Implementation

• Deemed saving approach used M & V

Overall cost (energy and O&M) savings to Municipalities Energy Efficiency Services Limited

Street Light Demo at JIPMER Road Puducherry

HPSV 250W Installation LED 130W Installation

250 W SV Lamp Average Lux: 22.18 130 W LED Lamp Average Lux: 33.49


EESL Demo Projects - Ludhiana Road Category B1 As per NLC (6 M road width) Left side Image 70W HPSV 30M span and Right side image 30W LED on same road

Power Saving more than 55% . Lux level is much more than existing lux level. Illumination > 91.71%. Power factor improvement leading to additional savings of about 25% at DISCOM end.


Street Light Demo at Mohali MC, Punjab

150 W SV Lamp 60 W LED Lamp

Road Category B1 As per NLC (12 M road width) Left side Image 150W HPSV 28M span and Right side image 60W LED on same road


Cost Effectiveness of MuDSM Project at Puducherry………..


COST 0 1 2 3 4 5 6 7

Initial Investment 2,888,524,800

866,557,440

288,852,480

288,852,480

288,852,480

288,852,480

288,852,480

288,852,480

288,852,480

Interest Cost on Loan

234,692,640

198,586,080

162,479,520

126,372,960

90,266,400

54,159,840

18,053,280

PMC cost (2%) 57,770,496 -

8,252,928

8,500,516

8,755,531

9,018,197

9,288,743

9,567,405

9,854,428

Total 2,946,295,296

866,557,440

531,798,048

495,939,076

460,087,531

424,243,637

388,407,623

352,579,725

316,760,188

Present Value of Cost @ 15% 2,359,729,113

BENEFITS

Energy Saving 741,011,651

763,242,001

786,139,261

809,723,438

834,015,142

859,035,596

884,806,664

Other Benefits 194,386,000

200,217,580

206,224,107

212,410,831

218,783,156

225,346,650

232,107,050

TOTAL REVENUE 935,397,651

963,459,581

992,363,368

1,022,134,269

1,052,798,297

1,084,382,246

1,116,913,713

Present Value of Benefits @ 15% 4,190,931,156

Cost Effectiveness Index

1.78

BEE-DSM – MoU signed with BEE – DSM plan for 30 states to be

prepared by EESL – total allocation Rs. 26.2 crores

Utility DSM - Project for MSEDCL and BEST under submission to

MERC

SME Projects – GEF proposal prepared for implementation of

demonstration projects in MSME clusters – total value $ 4.5 m (Rs.

27 crores). Similar project of BEE likely to be given to EESL

DISCOM Audit– Audit for all 3 DISCOMs in Rajasthan started – total

value Rs. 80 lakhs – inquiries from 3 other DISCOMs

MOEF – BUR – Work being awarded to EESL for updating SNC –

total value Rs. 80 lakhs

Consultancy Work


Thank You


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