Training Program on DSM AT IIT, Bombay
“DSMRegulations &
Role of Regulatory
body"
Vijay L Sonavane Former Member MERC Mumbai
Former Director (Projects) MSEDCL Date: 8th Dec 2016 Mumbai
Thought for the day “Let us all work together forthe progress of our countrywith the focus on 4 Es:– Electricity for all– Efficiency to ensure
affordable tariffs– Environment for a
sustainable future– Ease of doing business to
attract investments &ensure financial viability”
(finalization of New Tariff Policy: 20th Jan 2016)
Vibrant Indian Power Sector • 1st power station at Darjeeling on 10th Nov 1897
• Installed Capacity (15th Aug 1947):1362 MW
• 30th Nov 2016: Capacity:308 GW (+) (227 times)
• By 2020: Installed capacity : 375 GW
• Present RE: 45.9 GW (+): (Energy: 6.5%). Rising % of RES (INFIRM)/ Need: Storage
• AI RE TARGET: By 2022: 175 GW RPO: 15%
• As of Jan 2016 World IC: 11,056 GW RE IC: 785 GW
• 4th highest electricity using country (USA, China, EU)
• Per capita: 1010 U/year: 25% of World AV
• 25% Indians (300 Million population, 60 Million H/H) do not have access to Electricity
• AI Dist Losses (about 23.4%) HI AT&C losses: Rising tariff
• Off Peak Load: 70% of Peak : DSM/EE
WHAT IS DEMAND SIDE MANAGEMENT?• Observing & implementing EE
program from utility side by motivating consumers for Modification of Electricity usage pattern
• Cooperative activity between utility & its customers. resulting benefits to customers, utility & society
• DSM: for Improving End Use efficiency
• DSM: addresses:
– Load reduction via EE & EC(Use Less Energy)
– Load shifting (use at Off-peak hours)
Distribution Utilities
SERC
Nodal Agencies – BEE, SDAs
etc..Consumers
State Govt.
Reasons for non-deployment of DSM
• Lack of clarity about obligation on DistUtilities & Absence of clear guidelinesfor DSM implementation
• With DSM: DL’s Revenue will comedown ???
• Dist Staff has many other IMP jobs:Supply Interruptions/ MBC (Revenuefunctions)
• Lack of Public awareness/participation:Need for public education (Schools/Colleges)
• No clarity on financial incentives toConsumers (Monthly Bill going down)
DSM: Legal & Policy Framework
• EC 2001: First major policyinitiative to coordinate variousactivities associated with efficientuse of Energy & its Conservation
– Institutional Framework :Formation of BEE / StateDesignated Agencies
• Preamble of EA-2003 clearlyspecifies ‘efficiency’ & ‘promotionof environmentally benign policies’as one of the key objectives of EA-2003.
Difference between an ACT & a REGULATION
ACT: legislation passed by the Parliament.• Acts, can only be amended by another Act
of Parliament.• Acts set out the broad legal/policy
principles.REGULATIONS: commonly known as
"subsidiary legislation" & requirepublishing in the Govt. Gazette to becomelegal.
• Regulations: guidelines that dictate howthe provisions of the Act are applied.
• Regulations can only be amended by anotice published in the Govt. Gazette.
• Legal/statement of Law: Act• Implementation of Act : Regulation
Basic functions of DSM-CC• Maharashtra: First State to notify Two DSM
Regulations in 2010• Mandate DL to make DSM as a part of day to day
operations• DSM Consultative Committee formed under
Principal Secretary, representatives from DL, CR,IIT/VJTI, Dr.MP for recommending DSM Projectsto MERC
Functions of DSM-CC:• Review DSM Plans & Programs submitted by DL• Provide assistance to SERC for approving DL’s
DSM Plan & individual DSM Schemes• Promote cross-learning among DLs• Plan common programs across DL: Common
Specs for equipments & Joint Procurement• Create avenues for capacity building within DL
Proactive initiative : MERC (DSM implementation framework) Regulations,2010
Basic principles:• DL to make DSM: part of day‐to‐day
operations (DSM Cells formed & pilotprojects initiated)
• DL allowed to “recover” DSM costs in ARR• Program investments to be cost-effective
(avoided PP cost) & (reduced bill)• MYT Tariff Regulations: DL to submit DSM
plans & also to factor the target savings inPP due to DSM Programs
• DL shall project power purchaserequirement after considering effect oftarget set for EE & DSM schemes
• MERC introduced TOD tariff from May2000.
TOD: A DSM Measure: Dynamic Pricing MSEDCL TOD: (Ps/Unit) for consumers with > 20 KW CL
(Effective Dynamic Pricing Mechanism: basic tariff: 713Ps/U )
In paise
Time Slot 2000-01 2001-02 2003-05 2006 to 2010 2011-12 2012-132015-16& 2016-17
0600 to 0900 hrs
0 0 0 0 0 0 0
0900 to 1200 hrs
30 50 60 80 80 80 80
1200 to 1800 hrs
0 0 0 0 0 0 0
1800 to 2200 hrs
60 90 100 110 110 110 110
2200 to 0600 hrs -50 -75 -85 -85 -100 -250 -150
Revision in TOD Tariff to encourage load shiftingMP: + 11% EP: + 15% NOP: (-) 21%
UP TOD : 0600-1700: 0%, 1700-2200 (+) 15%, 2200-0600: (-) 7.5%
A common practice across several Indian States has been to encourage consumers to shift their consumption from peak to off-peak times through adoption of TOD tariffs
MAHA: Pilot DSM Schemes
Pilot DSM Schemes: – LED bulbs replacing IB / LED Street
Lighting – 5 Star Ceiling fans / 5 star Split
window AC/ 5 Star Refrigerators – Demand Response Schemes – Load curve flattening by segregation
AG load (AG feeder Separation scheme)
– EE AG Pumps Program/ Solar AG Pumps
– Thermal Storage systems: run Chillers in night & store energy in ice cubes. Shifting AC Load to night : NSCI BKC
MERC (Multi Year Tariff) Regulations, 2011Sample: RInfra –D MYT tariff Order dated 22 August 2013 in Case No. 9 of 2013
Particulars Unit FY 2013-14 FY 2014-15 FY 2015-16
R-Infra D Own sales
MU 6600.37 6797.87 7027.62
Energy Savings through DSM measures
MU 6.69 7.53 7.53
RInfra D Own Sales after DSM Measures
MU 6593.68 6790.34 7020.09
DSM Expenses (Rs. CR) approved by MERC for R-Infra & TPC in MYT Order dated 21st oct 2016
DL Particulars FY 16-17 FY 17-18 Fy 18-19 FY-19-20 Total
R-INFRA Large Scale Ceiling Fans & Refrigerator Programs
5.19 5.19 2.20 ---- 12.58
TPC For Approved DSM Schemes (Fan/Refri/ AC/DR)
2.60 1.44 2.10 2.48 8.62
Any further DSM Scheme undertaken by DL, with MERC’s prior approval shall be considered at the time of MTRDL may consider targeting construction industry for installation of Energy Efficient appliances in “under construction” R/C/I premises to give impetus to DSM measures (ARR: TPC: Rs 3000 CR & R-IN: Rs. 5200 CR)
Responsibilities of SERC/Utility: Flow chart
SERC Utility
1. Guidelines & Regulations
2. Technical Potential assessment
3. Goals & Target setting 4. Load Research & Market Research 5. Economic Potential Assessment 6. Preparation & Design of DSM Plan
7. Approval of DSM Plan (DSM CC)
8. Preparation & Design of approved DSM Plan for funding
9. Approval DSM Plan funding (SERC)
10. Project Implementation 11. Monitoring & Reporting
12. Evaluation, Measurement & Verification (EM&V)
Mumbai Load curve: Typical day
100200300400500600700800900
100011001200130014001500160017001800190020002100220023002400250026002700280029003000
DEM
AN
D in
MW
TIME BLOCK
(For Mumbai Distribution Utility & Consolidated Mumbai)(Peak Mumbai Load: 3469 MW)
REL-D
TPC-D
BEST
Mumbai
15About 35-40% Peak Load in Mumbai is due to Air Conditioning Load
DR: Case study: Mumbai system• Mumbai Peak: 3400MW (Base Load: 2000
MW): 5 Hrs/day, 22 days/month: 1320Hours/year. Major Laod: AC.
• Short term PP has great impact on Mumbai’sretail tariff. Need for Peak Load reduction.
• Mumbai (09-10) : Price: > Rs.8/KWH for 100Hour With 10% Dist loss Cost at consumer end:Rs 8.90/KWH
• Comm. tariff: Rs 5.50 – 6.00/ KWH• India’s first pilot DR program for Com & IND
sectors by TPC
• Instead of increasing supply; Aggregatorcalls for a reduction in demand byconsumer to balance the system Demand& consumer gets compensation for L/R
• BKC Area: about 50 Consumers with DRcapabiity of 2 MW each
DR Actions: (Negawatt: unit of power that is no longer needed)
Impact of DSM-Regulations
• All Discoms to formulate DSM Cells,with interested Officers, (MembersDSM-CC)
• Pilot Projects to be started in allDiscoms
• MYT Tariff Regulations to mandateDiscom to factor the savings inPower Purchase due to DSM
• All Discoms to submit their DSMplans & estimated savings in PP dueto the DSM Programs in their ARR
DSM Consultative Committee : To meet once in two months
DSM: Cost-effectiveness assessment testsTest Brief Explanation
Total Resource
Cost (TRC) Test
Main hurdle test: takes a holistic approach & compares all costs
incurred on a DSM program (by utility & consumers) & all
benefits received therein, both over the technology lifecycle.
Need: Positive NPV of benefits over the cost
Ratepayer
Impact
Measure
(RIM) Test
Need: costs incurred would not impact tariffs adversely.
This test analyses the impact on the consumer by considering
costs incurred by utility on implementing the DSM program.
Benefits are evaluated the same way as in the TRC test.
Positive NPV benefits over the cost for ratepayers: Program can
be implemented directly without LCRIM test
Lifecycle
Revenue
Impact-RIM
(LRIRIM) Test
This test uses the computations of RIM test & evaluates tariff
impact due to implementation of the DSM program. Tariff
impact of programme less than 1PS /kWh or less than 1% of
existing tariff, which ever is higher (Program to be impemented)
The assumptions for the programs are given below:
Example: Cost-effectiveness assessment : Replacement of Inefficient fans
Parameter Fan Replacement
Costs
Cost of new Technology (Rs.) 1400
Administration, Marketing and EM&V Costs (%) 2%
O&M Costs (%) 1%
Benefits
Average Power Purchase Cost (Rs./kWh) 4.00
Highest marginal cost of power purchase (Rs./kWh) 8.00
Parameter Fan Replacement
Consumption of Old equipment (kW) 0.080
Consumption of new equipment (kW) 0.055
Life of equipment (years) 5
Days of use in a year (days) 300
Example: Cost-effectiveness assessment:Replacement of Inefficient fans – Contd..
Parameter Fan Replacement
Number of Equipments being replaced (no.) 10,000
Total utility sales (kWh) 100,000
Demand Charges (Rs / kVA) 190
Societal Cost of Power (Rs./kWh) 11.58
Escalation Rate (%) 5%
Discount Rates (%) 10.5%
TEST RESULTS: REPLACEMENT OF INEFFICIENT FANS WITH EFFICIENT FANS
Total Resources Cost (TRC) Test 1,43,68,621
Ratepayer Impact Measure (RIM) test 75,54,048
Life-cycle Revenue Impact – RIM (LRIRIM) test -0.0000755
Participants Cost Test (PCT) 51,03,126
Societal Cost Test (SCT) 2,89,67,860
Cost of Conserved Energy (CCE) (Rs/KWH) 4.48
National Mission for Enhanced Energy Efficiency (NMEEE)
Four pillars of the NMEEE are:
• Creation of mechanisms that wouldhelp finance DSM programmes;
• Accelerating the shift to EEappliances in designated sectors &to make the products moreaffordable;
Market based mechanism to enhancecost effectiveness of improvementsin EE in Energy-Intensive industriesthrough certification of energysaving that could be traded (Ecerts)
• Development fiscal instrument topromote EE (PAT)
UDAY: GOI OM dated 20/11/2015
4.0 Improving Operational Efficiency:• 4.1: Participating States & Utilities
would follow the timeline of thefollowing targeted activities forimproving operational Efficiencies:
• Activity: 5: DSM which includes EE LEDbulbs, AG Pumps, fans, air-conditioners & efficient industrialequipment through PAT (Perform,Achieve & Trade)
• Targeted Benefits: Reduce Peak Load &Energy Consumption: Annualestimated savings of Rs. 40,000 CR forconsumers from LED Lighting Programalone.
• Expected Date of Completion: 31st
March 2019
DELP : Domestic Efficient Lighting Program National Energy Efficient Fan Program (NEEFP)
• EESL: AI: As on 7th Dec 2016: 18.17 CRinefficient bulbs replaced by LEDs under theUnnat Jyoti by Affordable LEDs for All(UJALA) program.
• MAHA: 2.00 CR Target: 6 CR. Highest: GUJ:2.76 CR
• Transparent Procurement of LED bulbs byEESL: Price dropped Rs.310 (Feb 2014) Rs.73 (June 2015)
• NEEFP: EESL in collaboration with DL: 50WBEE5 star rated ceiling fans beingdistributed to consumers (Replacing 7 yearVintage ceiling fans consuming 80-105 Wwith 50W 5-Star fans)
• Pay back < 2 years
Golden Moment with Dr Arthur Rosenfeld Grand father of Energy Efficiency (11th June 2011)
• Born in 1927. Ph.D. in PHY in1954 University CA Berkeley
• Until 1974 in LBNL (PHY Dept.)Changed research focus to EE
• 1994-99: Senior Advisor to USDOE’s Asst. Sec for EE/RE
• In 2000, appointed as aCommissioner at CEC. In 2005,reappointed as Commissioner
• CA stable energy demandrequirement : (DSM + RE )
• Retired from CEC in Jan 10www.artrosenfeld.org
CA per capita consumption reduced Per Capita Electricity Consumption
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
year
kWh
per
pers
on
United States
California
California has
avoided
building Forty
500 MW power
plants
Dr. AR’s efforts: Average Energy consumption per Household Fridge was 1900 Units/year in 1973.
Average Energy use for EE Fridge in 2009 is 380 Units/year
27
White roofs to cool your buildings, your cities
& to cool the earth.
flat, white
pitched, white
pitched, cool & colored
OLD NEW
AC savings ≈ 15%
AC savings ≈ 10%
AC savings ≈ 5%
White roofs around the world…(1) In Hyderabad, India (2) Wal-Mart store in Northern California
29
Nagpur MSEDCL Building Data Example (2013)(White Roof outdoor & indoor temperature difference is 15 degrees
compared to 7 degrees difference in Grey Roof.)
-20
-15
-10
-5
0
5
10
15
20
25
30
4-Jun 5-Jun 6-Jun 7-Jun 8-Jun 9-Jun
Ind
oo
r a
ir &
ou
tdo
or
air
tem
pe
ratu
re (°C
)
ia1-oa1
ia2-oa2
ia1-oa1 is white roofia2-oa2 is gray roof
Suggested Regulatory Interventions for successful implementation of DSM
• To develop suitable incentive mechanism forDL: to earn additional ROE (1%) forinvestment in DSM/EE programs forsubsidised categories like Dom, Municipal,AG, etc. & 2% for investments in DSMprograms for subsidizing categories like Com& IND Sector (Normative ROE: 17.5%)
• DL may be encouraged to develop peak loadsaving programs so that overall PP costdecreases. DL may be allowed to retaincertain % of such saving
• DL may be encouraged to design large scaleDSM/EE schemes, where benefits are largeenough to allow sharing of benefits withconsumers
• Need for proper M&V Regulations
Way Forward… • Regulators need to facilitate framework for
implementation of DSM: DSM-CC to playleading Role
• DL: Dedicated DSM Cell is necessary• DL to initiate various program based on
load pattern & consumer behaviour• Need for innovative Financing• Consumer awareness to increase the
participation in DSM Programs• Need for Implementation of DSM/DR
Programs• SERC: Devising the suitable pricing
mechanism to enable maximumparticipation
• M&V of DSM project: IMP Issue & difficult
When ‘I’ is replaced by ‘WE’ Even ‘ILLNESS’ becomes ‘WELLNESS’!!
Thanks!!UDAY: SAB KA SATH SAB KA VIKAS
(contact me [email protected]/ M: 98333 62062)
Perform Achieve & Trade (PAT) Scheme
• PAT: A regulatory instrument to reduce Specific Energy Consumption (SEC) in energy intensive industries, with an associated market based mechanism to enhance the cost effectiveness through certification of excess energy savings, which can be traded.
• During 2010-11: EC Act amended to make provisions for issue of Energy Saving certificates, imposition of penalty for non-compliance & trading of ESCerts
• Gate to Gate approach while calculating Specific Energy Consumption
Perform Achieve & Trade (PAT) Scheme
• Energy Input (E) = Electricity (KWH)+ FO (Lit) + NG (SCM) + Coal (Kg)
• Output: Product (P) in KG
• Specific Energy Consumption (SEC) = E/P
• Base Line SEC is computed & Target SEC for 3 years is set . Reduction SEC (expressed in %) is computed after 3 years
• PAT I: First compliance period began (2012-2015). 2014-15: Target year
• PAT I: 8 Sectors: 478 DC: THM Power/ Iron & Steel/ Cement / AL/ Fertilizer/ Paper& Pulp/ Textile / Clore-Aklali: I (36% Share of total energy consumption) (2009-10 Level) 2015-16: Performance Verification
• % Energy Reduction in 3 years : 5.23%
PAT Scheme: Schematic
Roles & functions of Stakeholders :BEE: Administrator & Market Regulator: Issuance of ESCerts
Designated Consumer: Implementer SDA/ SERC: State Nodal Agency/ Adjucator: appointed by SERC for holding EnquiryEmpanelled Accredited Auditor: VerifierCERC/POSOCO: Trading Regulator/ Registry
PAT Cycle II: Way Forward • PAT Cycle II: (2016-17 to 2018-19) Assessment Year: 2018-19
• PAT Cycle II Baseline Year: 2014- 2015
• In addition to 8 Sectors in PAT I, 3 new sectors are included: 18 DC Refinery, 44 DC Discoms, 22 DC Railways: TTL 11 Sectors (621 DC) (50% Share of total energy consumption (2009-10 Level)
• Energy Saving Target = 8.869 Mtoe (3.90%)
• Consider Base line SEC = 100 Units Target SEC = 90 Units
• Scenario 1: Achieved SEC= 85 Units, 5 Units of ESCerts issued (Incentive)
• Scenario 2: Achieved SEC= 93 Units, 3 Units of ESCerts will have to be purchased (Penalty)
• Target is Plant Specific …… Less for Energy Efficient & more for Inefficient Plants (Target Range: 3.04 to 8.51%)
• With 1 mToE = 1 ESCert Banking of ESCerts allowed during each cycle