WORKSHOP ON DEMAND SIDE MANAGEMENT & DEMAND RESPONSE

SUMMARY REPORT OF WORKSHOP PROCEEDINGS

A summary report of the proceedings of workshop held at Victor Menezes Convention Centre,

IIT Bombay, Mumbai on 4th March 2016 under the aegis of IIT Bombay, Shakti Sustainable

Energy Foundation.

CONTENTS

Introduction ................................................................................................................................................. 2

Project Report Presentations..................................................................................................................... 2

Technology Assessment for Demand Response ................................................................................................ 3

Measurement & Verification standards for Demand Response .................................................................... 10

Framework for Demand Response in India ..................................................................................................... 16

Review of DSM Projects ...................................................................................................................................... 18

DELP Puducherry Project .............................................................................................................................. 18

Bachat Lamp Yojana (BLY), Kerala .............................................................................................................. 20

DSM projects in Mumbai ................................................................................................................................ 20

Agricultural DSM projects .............................................................................................................................. 22

Discussion Session: DR and DSM: Way forward (Based on a questionnaire) ................................ 25

Annexure 1: Workshop Program ........................................................................................................... 34

Annexure 2: List of Participants ............................................................................................................. 35

Introduction

IIT Bombay organized a workshop on Demand Side Management (DSM) and Demand Response

(DR) in collaboration with Shakti Sustainable Energy Foundation on 4th March 2016. A

representative group of 40 experts and officials from state electricity regulatory bodies, utilities,

ESCOs and academia participated in the workshop. The program was conducted in two sessions.

a. Session 1: Project Report Presentations

b. Session 2: Discussion session on DR & DSM: Way forward (Based on a questionnaire)

The workshop was inaugurated by Prof. Rangan Banerjee. He gave a brief introduction about the

Department of Energy Science and Engineering in IIT Bombay.

The Department of Energy Science and Engineering (DESE) started in 2007. The department focuses on research

and education for the development of sustainable energy systems for the future. The Department is a unique blend of

science and engineering for the Energy sector. The Department currently has 20 core faculty members and 480

students (including 140 PhD students) and several associated faculty from other departments. DESE offers an

array of academic programmes: Dual Degree - B. Tech - M. Tech Program, Dual Degree - M. Sc. - Ph. D., M.

Tech in Energy Systems Engineering, Ph. D. and Minor in Energy Engineering. The faculty member’s work

together with different industries and organizations which are working in energy sectors as the department believes

that the energy sector needs a lot of inputs in terms of man power, education and research.

He also enumerated the relevance of DSM and DR playing a vital role in energy conservation and

peak load management in India.

Ms. Vrinda Sarda gave a brief introduction about Shakti Sustainable Energy Foundation (SSEF)

and its activities. She mentioned that SSEF has been active in the space of clean energy for a period

close to seven years now and works collaboratively with national, state and local decision-makers

to craft sound energy policies helping build new energy economy. Over the past seven years, SSEF

has done many projects at national and state level on designing programs which can mark the

transition to MW scale in DSM implementation in India.

Project Report Presentations Speakers:

Prof. Suryanarayana Doolla, IIT Bombay.

Prof. Rangan Banerjee, IIT Bombay

Mr Amit Singh, IIT Bombay

Prof. Suryanarayana Doolla (IIT Bombay)

He is currently associate professor at the Department of Energy

Science and Engineering, IIT Bombay. He began his

presentation by giving a brief introduction about the projects

done by IIT Bombay in collaboration with Shakti Sustainable

Energy Foundation-

Project 1 (July 2013 - June 14): The aim of the project was to

evaluate technology options for DSM, determine Cost

effectiveness of DSM program, and launch regulations for DSM,

training for utilities, regulators, SDAs and NGO.

Project 2 (December 2014 - December 15): The aim of the

project was to carry out technology assessment for available DR options, Evaluation of

measurement and verification protocol suitable for Indian context, Development of framework

for demand response in India, DSM training and capacity building, Development of e-Learning

modules (DSM), Load Research and Program Design, M&V for DSM Programs and detailed

analysis of case studies which were compiled as part of landscape assessment report in the first

project. Two separate draft reports were compiled and distributed to the participants of the

workshop in order to get feedback and incorporate any suggestions and modifications.

Project 3 (January 2016 - Ongoing): The aim of the project is to set up Virtual Centre for

Excellence in DSM which will include development of course materials and curriculum for DSM

and energy efficiency courses at university level, Internships for stakeholders, Capacity Building

workshops, sharing of best practices through webinars and seminars.

After a brief introduction about the projects, he outlined the major research findings conducted

by the project team on technology assessment of DR and EM & V for DR.

Summary of his first presentation on Technology Assessment for Demand Response is

outlined below:

Technology Assessment for Demand Response

Demand Side Management (DSM) is an approach to reduce energy consumption by modifying

the consumer energy consumption pattern by way of offering financial incentives and/or

behavioural change through education. Various approaches (load shaping objective) to achieve

demand side management are:

Peak clipping

Energy conservation

Load building

Flexible load shape

Valley filling

Load shifting

Peak clipping approach reduce peak demand at specific periods which reduces the need for

installing additional power plants and operation cost of power stations. Most of the appliance

exchange program implemented in the country relate to conservation activity in the DSM category.

Energy conservation generally shifts the load curve down while the peak clipping results in

chopping the load curve. Load building approach increase the sales through the development of

new application (electric cars, microwave, automation etc.). Valley filling increase the load during

off-peak hours. Flexible load shape approach can curtail a consumer’s load demand if needed. The

customer must then produce his own electricity or use other energy source to meet his demands.

Load shifting approach is traditional means of load management which shift peak period loads to

off-peak hours.

The Federal Energy Regulatory Commission defines Demand Response as “Changes in electric usage

by end-use customers from their normal consumption patterns in response to changes in the price of electricity over

time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when

system reliability is jeopardized”

Demand Response includes participants who reduce their electrical demand by shifting their

electric loads from peak hours to off peak hours of the day or week, by switching off the lights

which are not essential and settings of HVAC temperature to reduce the load during DR event

(time period in which the curtailments of load are done). In exchange, the utilities or the DR

provider pay incentives to the customer on the basis of their load reduction. Demand Response

can be initiated manually, automatically or semi-automatically.

He mentioned about the three types of demand response programs which are obtained by

classifying the programs on the basis of timing and mode of operation: Price-based DR, Incentive

based DR, Demand reduction Bid.

1) Price Based Program – In price based program, customers are encouraged to curb their

demand. The price of electricity varies over time. Customers who enroll themselves in this

program can save electricity by adjusting their consumption in lower-price periods as the

utility notify its customers about the price hike for certain time and days.

2) Incentive Based Program- In incentive based program, customers get rewards for giving

DR provider some level of control over the customer’s electricity using equipment. A set

of demand reduction signals are sent to the customers by the DR provider, customers

following this signal get payments as per the contract set by the DR provider and the

customer. Incentive based program offer customers to join a voluntary or a mandatory

program.

Voluntary Programs- If a customer enrolls in a voluntary program, they have the

choice to either participate or not when DR event is called by the DR provider.

The payments for voluntary programs are normally lower because of the

uncertainty in customer acceptance each time called by the utility.

Mandatory Programs- If customers enroll in a mandatory program, customers are

required to meet the terms with the DR provider request and reduce the amount

of load to which they are contractually beholden. The payment for this program is

higher. Failure to comply when enrolled in this, result in fines or rejection from

participating in future program.

3) Demand Reduction Bid- In demand reduction bid program, customer’s participating in

the programs initiate and send demand reduction bids to the DR provider. The bids consist

of the price and the load reduction capacity.

Within these three broad categories of Demand Response Programs, there are different programs

types as follows:

Price based DR program

- TOU (time of use rates): Usually Rates are fixed and vary by time of the day.

- CPP (Critical Peak Pricing): Rates are pre-specified, higher rate for certain

period of time which is triggered by the utility.

- RTP (Real Time Pricing): Rates vary continuously in response to wholesale

electricity market prices.

Incentive/Event-based

- DLC (Direct Load Control): Direct control over the participant equipment, in

response customers receive incentives.

- Emergency DR: Customers receive incentives for load curtailment when

needed to ensure the reliability.

- Capacity Market Programs: Customers receives incentives for load curtailment

substitutes system capacity

- Interruptible/Curtailable: Customers provided discounted rate to curb the

demand upon request.

- Ancillary services market program: Customer receives Incentives from grid

operator (ISO) for supporting the operation of electric grid (ancillary services)

when needed.

Demand-reduction

- Demand Bidding: Customers bid to decrease consumption during higher

wholesale electricity market prices

He then described the framework for DR implementation which can be broadly categorized into

following three themes -

The stakeholders involved and their roles & objectives: Utility, Load aggregator &

Customer

Technological prerequisites (Hardware/Software) at each of the involved stakeholder’s

facility

The communication tool (technology) used by these stakeholders to communicate to each

other.

The first step in shaping the framework for technology assessment of DR programs is to identify

the stakeholders involved and their need-cum-objective of involvement. The different players can

be categorized into three broad divisions namely utility, aggregators and customers.

Utility - Utility is the entity that triggers a DR event through various price based and

incentive based mechanisms with the prime objective of peak load reduction.

Load aggregator - Many customers are not able to participate in DR programs because

their curtailment volume does not meet the minimum load requirements fixed by the utility

and also due to the penalty risk involved. A load aggregator acts as a broker and mitigates

the penalty risk through aggregation by assigning other customers to take up the slack

created by inability of a specific customer to provide the expected curtailment in such a

way that the entire portfolio continues to meet its obligations.

Third-party aggregators enlist end users to participate in demand response programs and

sell the combined load reduction to utilities in lieu of a brokerage fee (percentage of the

demand response incentive), and passes the rest on to the end user.

Customer - Customer/end user or load is the entity that responds to the DR event signal

sent by the utility or load aggregator with the sole objective of earning/avoiding bill

credits/penalties.

Aggregators represent the pool of customers. In Indian scenario, various DISCOMS may act as

load aggregators. Utilities are the independent system operator (ISO) which regulates the energy

market.

Demand response programs require a certain degree of technological readiness from the

perspective of each of the stakeholders. The second step involves identification of technological

credentials that could enable the implementation of demand response for a target load category.

The technological requirement identified can be categorized as hardware component, software

component and the communication technology that enables exchange of information across

various entities involved.

In order to carry out a Direct Load Control program, utility invites residential customers and load

aggregators to enter into a DR contract which allows the utility to control the operation of a

controllable appliance at the customer’s end in lieu of incentive in form of bill credits. Based on

the Day-ahead load forecasts, utility notifies the customer or aggregator about the DR event. A

DR event is generated by the Demand Response Automation Server (DRAS) which is

communicated either directly to the customer via the WAN gateway connected to the smart meter

at customer’s end or through the NAN gateway encompassing the load aggregator and finally to

the customer. Once the DR event is notified at the smart meter, it communicates with the load

controllers or smart appliances via the Home Area Network to dispatch the appropriate load. This

categorization can be extended for other load categories with certain modification in the hardware,

software and communication technology used at the load side.

The third step involves identifying the communication architecture for a typical demand response

program that involves interaction between various hardware and software entities at utility,

aggregator and customer’s end which makes possible to carry out a DR shed initiated by energy

management system (HEMS/BEMS) after an external communication signal is received from the

utility/aggregator side. The various communication channels are:

Personal Area Network (PAN) is formed by configuring the ZigBee devices as ZigBee

coordinator, Router and end devices using PAN IDs. The end devices (ZEDs) in this

network happen to be the electric appliances enrolled under DR. Router devices (ZRs) are

battery powered and are used to extend range and increase device capacity so as to connect

all shift able (Ac units, Washer/dryer, Electric vehicle charger, Heaters, etc.) loads to the

line powered ZigBee coordinator (ZC). ZigBee coordinator connects the appliances to the

home energy gateway via a ZigBee modem which can also be a part of smart meter.

Smart Meters are electronic variants of old analog energy meters that are capable of two

way communication between utility and customer. They record meter readings at intervals

of one hour or less and updates utilities about the energy usage pattern of customers on a

daily basis. Typically, smart meters have two radios installed - one that utilizes the licensed

902-928 MHz band for connection to the utility and the other is a 2.4 GHz radio to

transmit to devices in the customer premises (Home Area Network).

Home Energy Management System (HEMS) is an integral part of a smart home and

allows appliances to be connected and controlled from a central point. It is usually

embedded in the smart meter along with the home energy gateway and is operated through

In-Home Displays (IHDs) installed inside the customer’s premise. It collects real-time

energy consumption data from smart meter to control activation/deactivation of home

appliances. The control and monitoring dashboard can be accessed through a secure web

portal or a mobile app remotely by the user over the public web.

Data Concentrator Unit (DCU) collects/aggregates meter data of multiple such Home

Area Network (HAN) in the neighbourhood connected using a DSL/ PLC/ cellular

connection forming Neighbourhood area network (NAN). Many such DCUs further push

the collected data to utility via a wide area network (WAN). At the utility end, Meter Data

Management System (MDMS) monitors the data collected and take billing/penalty actions

based on the customer’s response to DR signal sent by the utility. The Demand Response

Automation Server (DRAS) is the central DR controller installed at utility.

It broadcasts appropriate DR signals to consumers/aggregators based on utility forecast

and critical load situations. An Independent System Operator (ISO) can also invite DR

bids in the wholesale/retail power market via the WAN gateway.

The choice of communication depends on various features required for a particular information

exchange. Features, such as range, data size, permissible delay and desired quality of

communication and cost influence the selection of the communication methodology. Along with

this the use of existing support structure, age and life of technology, O&M cost, flexibility of future

expansion are the parameters which need to be considered for long term benefits.

He also mentioned about Open Automated Demand Response (OpenADR) protocols which

provide an open (non-proprietary), standardized and secure way for Utilities and Independent

system operators (ISOs) to communicate DR signals with each other and with their customers

using a common language over any existing IP-based communications network, such as the

Internet. OpenADR 1.0 standards were designed for simpler devices such as residential

thermostats. Many features have been added in new versions of OpenADR 2.0 such as handling

the flow of information back from the buildings. This reporting feature has been made more

robust and can handle real-time results from end users. Real-time energy consumption changes in

building loads can be confirmed with same ease as verification of a home or small business

thermostat or load-control device having received the DR signal and if they have responded as per

the contract.

He then described the DR deployment architecture. In a DR event, the DR provider or the utility

initiates the DR event to the Demand Response Automated Server (DRAS) .These events are

converted in DR signals, and those are transmitted to the demand response controller/gateways

in the site. The DR controller then shuts down or modulates the loads based on the shed strategies

configured or commissioned in the site for each load. The meter data is integrated via the Meter

Data Management System (MDMS) interface, where the entire consumer’s meter data are

integrated with each site. The meter ID of each customer is used to associate the gateway with the

meter data to calculate the telemetry, baseline, and calculated demand. The DRAS is the most

important factor in the DR topology as it’s the platform where all the information is recorded and

exchanged. The DRAS have the following features:

Collects information from Load forecasting tool, SCADA, and MDMS (Meter Data

Management Systems)

Supply-Demand is determined for present and next block

Based on the deficit/surplus situation, commands are sent to the consumers

He also highlighted project details of Auto-DR pilot implemented by TPDDL (Tata Power Delhi

Distribution Limited) in Delhi. TPPDDL conducted 17 Auto-DR events with each event ranging

from 0.5 to 1 hour for 144 commercial and industrial customers during the period of May 2014 to

October 2014. During the program, 17 AutoDR events were carried out. 5/10 with morning

adjustment was used as baseline for estimating the demand reduction potential.

He then listed the major points about the Measurement & Verification standards for Demand

Response that has been compiled as one of the parts in the final project report.

Measurement & Verification standards for Demand Response

He described the sequence of events that are involved in DSM/DR project. The first step involves

load research and potential (technical/economic) assessment. This involves analysis of the load

curve and identify appropriate program for demand side management. Once the program is

identified strategic planning is made by the team implementing DSM followed by program design.

Program design involves selection of technology and cost benefit analysis of the total program.

One of the most important steps in DSM cycle is Evaluation Measurement and Verification.

The success of the program and payments to the consumers participating purely depends on the

EM&V report which is generally documented by a third party consultant. The real benefit-to-cost

ratio to customers and utility, actual demand reduction are metrics for success of any DSM

program.

Measurement and Verification in the context of DR aims at evaluating the actual amount of load

that is curtailed during an event. This requires an estimate of the load that the customer is going

to consume on the event day more precisely during the event period. This estimate of consumer’s

consumption is called the consumer baseline load (CBL) and is can be defined more appropriately

as the predicted amount of the electricity that would have been used up by a customer in the

absence of a DR event. DR program participants are then compensated financially for reducing

electricity use, calculated as the difference between the customer baseline (CBL) and the actual

metered usage. Baseline is challenging aspect as it should represent the exact usage of electricity

by the customers in the absence of load curtailment during DR event. The categorization of

existing baseline calculation methods are based on three elements:

1) Data selection

2) Estimation

3) Adjustment

Data Selection - For data selection, a period of time called baseline window is identified, that

usually precedes a DR event period over which electricity usage data is collected for the purpose

of establishing a baseline. Some of the instances of baseline windows include:

the last 10 non-holiday weekdays;

the 10 most recent program-eligible non-event days;

the 10 most recent program-eligible days beginning 2 days before the event;

the last 45 calendar days

the previous year

All the above baseline windows exclude some of the days from the from the baseline window so

as to neutralize the effect of certain exceptional days/events on the estimation of baseline. Some

of the common exclusion rules include:

Excluding days with DR events.

Excluding days with outages.

Excluding days with extreme weather.

Excluding days with the highest or lowest loads.

These are days when demand doesn’t follow the normal historical pattern as compared to the days

in its neighbourhood. Including such days in estimation of baseline, can hugely affect the accuracy

of the baseline. Hence such days need to be identified and be excluded from the sample used of

days used for baseline estimation. Load curve of Gujarat was shown as examples which depicted

the effect on festivals and holidays on the load curve and shows how the load curve on these days

is different from the days in their neighbourhood.

Estimation- The methods of developing the baseline load curve using the data from the baseline

window can be enumerated as below:

Averaging method calculates for each hour/half-hour of the day, the average of the load

at that hour over the included days.

Regression method calculates load using linear regression model from the included days

on weather and other variables, usually with separate regression coefficients by hour of the

day.

Maximum value method takes the maximum of the loads in the included period.

Rolling average method uses the updated unadjusted baseline for an operating day which

is equal to 0.9 times the prior unadjusted baseline plus 0.1 times the most recent included

day.

1) Averaging Method - In averaging or “X of Y” or “X in Y” method, the baseline for each

interval of curtailment day is calculated as the simple average, across all the days chosen by

the data selection criteria. The most common “X in Y” baselines are as follows:

10 in 10 - Out of 10 selected days, highest 10 day’s data is taken and the

baseline is calculated.

7 in 10 - Out of 10 selected days, highest 7 day’s data is taken and the baseline

is calculated.

5 in 10 - Out of 10 selected days, highest 5 day’s data is taken and the baseline

is calculated.

3 in 10 - Out of 10 selected days, highest 3 day’s data is taken and the baseline

is calculated.

He showed baselines used by US ISOs, which indicated that the baseline was different for

different ISOs. Thus, he concluded that the baseline vary from customers to customers

and one baseline cannot be used for all customers category.

2) Regression Method - The regression baseline is calculated using a regression model

consisting of daily energy equation, which include consumer’s daily consumption (kWh)

as dependent variable, and 24 hourly energy fraction equations. The explanatory variables

in model include calendar variables (day of the week, holidays), weather variables (dry bulb

temperature) and daylight variable (daylight saving time, time of sunrise and sunset).

3) Adjustment - The average method is not weather sensitive and does not depends on

occupancy level, due to which it requires adjustments in baseline .Adjustment factor is

evaluated to align the baseline with observed conditions of the event day. Factors used for

adjustment are usually based on temperature, humidity; calendar data, Sunrise/Sunset time

and event day operating conditions. Adjustment factors are either additive or scalar

(multiplicative). An additive adjustment shifts the curve up or down by a constant amount

whereas a scalar or ratio adjustment scales the shape by a constant amount. Common

adjustments are as follows:

Combination of the load in the hours between 1 and 4 hours prior to curtailment.

Additive and scalar to load at hours between 1 and 2 hours prior to curtailment.

Additive and scalar to load at hours between 3 and 4 hours prior to curtailment.

Weather based adjustment of all loads based on the difference or ratio of regression

estimated using curtailment period and baseline period.

The period of time for which the adjusted baseline matches the observed load is called the

adjustment window. As per NAESB (North American Energy Standards Board) guidance,

the adjustment window shall begin no more than four hours prior to deployment.

Examples of adjustment windows include:

The hour before the event

The 2 hours before the event

The two hours that end two hours before the event

He also listed out the various baselines used during the DR programs implemented in India.

TPDDL (Tata Power Delhi Distribution Limited) during their Auto-DR project in New Delhi

used 5 out of 10 baseline model and 5 in 10 with morning adjustment baseline. In “5 in 10”

method, the highest 5 days load out of previous 10 days was averaged excluding the weekend,

holidays. In 5 in 10 with morning adjustment baseline, additive factor was used .The morning

adjustment factor was calculated as a ratio of the average load of the first three of four hours

before the event to the average load of the same hours from the selected five baseline days .

Out of two models, 5 in 10 with morning adjustment baseline was considered as better option for

estimation of baseline as it shows a reduction in the Auto demand response measures compared

to 5 out of 10 baseline model. In morning adjustment the loads were curtailed. The baseline

estimated by 5 in 10 with morning adjustment was found to be more close to the actual load curve.

He then presented the case study - Assessment of performance metrics for unadjusted baselines.

Energy consumption data of various consumer categories in Mumbai was used to evaluate various

unadjusted baselines through averaging method. These baselines were plotted along with one of

the actual days from the data sample which was not used for baseline estimation in order to

investigate the performance of these baselines in predicting the load on a DR event day. In order

to bring more analysis and clarity, the following three metrics were calculated to assess the

performance of the baselines techniques in estimating the actual load curves from a sample that

has been used to evaluate them.

1) Accuracy

2) Bias

3) Variability

He showed set of baseline load curves that have been estimated through 10 in 10, 7 in 10, 5 in 10

and 3 in 10 baseline models for an actual day load curve for various consumer categories. The

analysis revealed that there cannot be one baseline that is a best fit for all customers. Although,

“10 in 10” baseline shows best values for accuracy, bias and variability metrics for most of the

customer categories, it needs further analysis before declaring these values conclusive as the effects

of temperature and other factors have not been taken into account.

He concluded that ‘5 in 10’ baseline have been used for two DR projects in the country till now.

It will need more such empirical results to assess the performance of these baseline types. It should

also be taken into account that averaging method of estimation of consumer baseline is simple to

understand and evaluate and could encourage better DR participation. Although it is ideal to devise

a standard baseline type and technique for a particular customer class, it can also lead to dispute in

settling of compensation/incentives due to the participation of customer of different category.

He also mentioned about the barriers that associated with Measurement &Verification of DSM

projects:

Cost (varies depending on extent of EM&V)

Available Personnel

Access to energy data

Understanding and organizing energy data: kWh vs. kW Demand;

Rate structures;

Meters and corresponding equipment/facilities

Discussion:

Shri Ismail Ali khan, Chairman, Telangana Electricity Regulatory Commission, enquired about the

Auto-DR program implemented by TPDDL in Delhi and asked about the parameters deciding

the choice of technology for the DR program and about the implications of cost of technology on

Automated DR program.

Mr Shekhar Khadilkar, TATA Power, Mumbai, answered that in Auto-DR program, several events

were called and cost wise it was supported by external agencies, directly there was no cost incurred

by the customers. They have tried to do large scale pilot program around 300 consumers of more

than 100 kW and they kept the technology on simpler side, not tried to control temperature, they

just found unwanted load and disconnect it whenever needed.

About the technological aspects, he added that in India, the technology cost becomes very high

for automated DR programs as the electricity tariff is almost constant (Rs. 4-5 /kWh) whereas in

US tariffs are escalating as per shortage which makes DR program more viable compared to India.

In Automated DR program, only 20 events can be scheduled in a year.

Mr Anurag Thatte, R-Infra, added that the electricity prices have gone down in 3 to 4 years of

time. Thus, for implementation of DR program, all aspects should be monitored as cost of

program should not be more than cost of power purchase.

Shri Ismail Ali khan, Chairman, TSERC, also asked about the benefits provided to the consumers

in Delhi pilot program. Prof. Suryanarayana Doolla, answered that TPDDL gave no financial

incentives to the consumers in the pilot program. The program was carried out just to demonstrate

the technical feasibility of Demand Response. Ms. Vrinda Sarda, SSEF also responded that they

are doing brief compilation of all Demand Response case studies that have taken place in India till

date and they will compare them on cost and benefits to utility and to consumers.

Mr Rajendra Pandya, GEDA, enquired about the program cost of DR pilot project carried out in

Rajasthan. Ms. Vrinda Sarda, answered that the Rajasthan Pilot program cost was not high as it

was manual Demand Response Program done with the utility. ICF International acted as the

Demand Response aggregator for the program. Total of 4 DR events were called and successful

results were seen. She also added that had planned to implement DR in Rajasthan on large scale

but due to some reasons it had to be postponed.

Shri Ismail Ali Khan suggested that small projects should be carried out initially and the reports

that include benefits to utilities & consumers, technological aspects, and cost associated with DR

Program should be presented to the regulators. He also asked about the sector which can be most

effective for implementation of demand response programs.

Mr Shekhar Khadilkar, TATA Power, Mumbai, answered that commercial sector is most effective

as in commercial sector, air conditioners are in maximum use and by just adjusting the temperature

a reduction of about 5- 10 % in load can happen. In industrial category, steel industry has best

potential for demand response as they can manage their load cycle and can shift their load to off

peak hours.

Prof. Rangan Banerjee (IIT Bombay)

Prof. Rangan Banerjee is the Forbes Marshall Chair

Professor and Head of Department in the Department of

Energy Science and Engineering, IIT Bombay.

His presentation outlined the various aspects of Demand

Response framework proposed in the Project report.

Summary of his presentation is outlined below:

Framework for Demand Response in India

The goal of energy sector is to supply energy to all consumers 24/7 which can improve the quality

of life. But supplying 24/7 electricity at affordable prices is very challenging task. DSM/ DR can

play a major role in this solution. He mentioned that demand response includes all the intentional

electricity consumption pattern modifications by end use customers that are intended to alter the

timing, level of instantaneous demand or total electricity consumption.

DR program can be classified into several segments including incentive based program and price

based program:

In incentive based program, customers get rewards for giving DR provider some level of

control over the customer’s electricity using equipment. These incentive based programs

can be classified into:

Direct Load Control – Customers receive payments for giving DR provider some

level of control over customer electricity equipment.

Emergency Demand Response Program - Customers receive incentive payments

for demand reductions to maintain reliability.

Capacity Market Programs - Customers receive incentive payments for providing

load reductions as substitutes for a system capacity.

Curtailable Programs - Customers get discounted rate for reducing load on request.

Ancillary Service Market Program - - Customers receive incentive payments from

grid operator for promising to curb electric loads when needed.

In the case of price based programs, the customers are encouraged to curb the demand

based on the price of electricity.

Customers who enroll themselves in this program can save electricity by adjusting their

consumption to lower-price periods. DR Price Program can be classified into the time of

use, real time pricing and critical peak pricing.

He also discussed about the DR framework. A structured approach to design and implementation

of Demand Response (DR) allow stakeholders in the planning process to keep track of the

strategies, incentives and regulations developed for effective roll out of DR programs and make

corrections if required. It also provides a roadmap for the necessary load research that needs to be

done to effectively identify the need and potential of DR for a particular utility/State/Region.

He showed the load curve of Delhi, Mumbai, and IIT Bombay hospital to show the seasonal

variations on the load profile. He also mentioned about the integration of renewable energy in DR

program.

He concluded that we need to have an overall framework for DR and to document transaction

costs and participation rates to assess the outcome of these programs. Improvement of forecasting

and analytical tools and assessment of effectiveness and viability of DR by scaling pilots to utility

wide deployment. He also suggested that proper analysis of public domain information should be

carried out.

Discussion:

Shri Ismail Ali khan commented that there is no concept of demand response in the current power

system. The concept originally developed in California because there was a system collapse and

the procurement cost was so high that they were not able to meet the demand. So that is the reason

the demand response came into existence. The reason that utilities are willing to implement

demand response because they are associated with the regulators and they are mandated to supply

electricity 24x7. Thus, they can’t do load shedding as for every shedding they have to pay penalty.

He also added that for all the ISOs in USA, the procurement cost at normal times is around 40

$/MWh and 80 to 90 $/ MWh during peak hours which makes demand response more effective.

During peak hours, demand goes beyond certain level, therefore, customers are interested in

compensating utility not to procure costly power and maintain power supply. He concluded that

only if this scenario comes to India, large scale DR programs can turn out to be successful.

Otherwise we have to continue doing pilot projects only.

Mr Amit Singh (IIT Bombay)

Mr Amit Singh is working as a Research Assistant in

Department of Energy Science and Engineering at IIT

Bombay.

He started his presentation by giving a brief outline about

the case studies documented as part of a Review of DSM

Projects.

Review of DSM Projects

He mainly listed out the major points of the case studies for the following projects.

DELP Puducherry

DSM projects in Mumbai

Bachat Lamp Yojana (BLY) in Kerala

Agricultural DSM projects

During the presentation, various feedbacks and queries were raised by the participants which have

been compiled under the section Discussion and added along with project presentation. Summary

of his presentation is outlined below.

He started with introducing the concept behind Energy Performance Contracting (EPC) model

and explained the two approaches (Shared savings and On-bill repayment approach) in relation to

DELP Puducherry and other DELP projects.

DELP Puducherry Project

DELP Puducherry was launched by EESL in collaboration with the electricity department,

Government of Puducherry (PED) on 7 Feb, 2014 as a standard offer program. 60 Watt

incandescent bulbs (ICL) were replaced with 7 Watt LED bulbs procured from Ecolite

Technologies, Gurgaon. Domestic category consumers with electricity bill arrears less than Rs.

1000 were qualified to enroll for the programs. Maximum of three LED bulbs were replaced per

policy number.

PED maintains an online database of all its customers against a unique policy numbers. This

helped during the enrolment of customers during the three distribution phases conducted through

door to door enrolment and counters set up at PED branch offices.

The vendor for the project handled the warranty issues and 5 shops were arranged for replacement

and warranty of LED bulbs.

Deemed savings approach was used as measurement & verification approach. In order to estimate

the average hourly consumption per day of each bulb, 200 sample bulbs with RFID tags were

installed at government quarters. These bulbs communicated the usage pattern of these samples

to a remote web based monitoring system via 5 RF transmitters located at various points inside

these quarters. Within three months, the number of these 200 bulbs reduced to 50 and hence it

was decided to use 3.5 Hrs. /day as average operating hours for estimation energy savings that will

accrue during the project period.

ICL bulbs collected during distribution phase are sent for disposal to M/s Ecobirdd Recycling,

Bangalore.

Rs. 10 /LED bulb was charged from customers and rest of the amount (Rs. 310/per LED) was

arranged by EESL. Total project invested was Rs.22.785 crore and was arranged by EESL on a

debt-equity ratio of 7:3.

Total energy savings were estimated to be 48.88 MUs including the T&D losses and pool losses.

The project cost has been planned to be recovered as per the SOP price fixed for the ten years of

the project period. PED has planned to recover the annual pay-out to be made to EESL through

ARR for each corresponding year.

Following observations were made by the project team about the DELP Puducherry Project:

• DELP in Puducherry has effectively demonstrated the potential of EPC (Energy

Performance Contracting) model in India and has helped domestic lighting sector in

leapfrogging to advanced lighting solutions through super-efficient LED lighting.

• Helped domestic lighting sector in leapfrogging to advanced lighting solutions of super-

efficient LED bulbs.

• 200 samples with RFID tags were installed in one place rather than distributed over the

entire project site which could have led to more accurate assessment of usage pattern of

customers.

• LED bulbs distributed to owner of the households were not given to tenants who actually

pay the electricity bill.

• Lack the general awareness about the warranty associated with the LED bulbs.

• Clearing of electricity bill arrears by defaulters so that they can also be eligible to be enrolled

in the project.

Bachat Lamp Yojana (BLY), Kerala

Kerala was chosen to evaluate the performance of BLY in the country as it was the only state in

the country to implement the project on a large scale. Energy Management Centre (EMC)

Thiruvananthapuram, in collaboration with Kerala State Electricity Board (KSEB) distributed

about 12.7 million compact fluorescent lamps (CFLs) under Bachat Lamp Yojana (BLY) scheme.

The project was registered under in UNFCCC under the Clean Development Mechanism (CDM)

in 2010. Two CFLs were distributed in exchange of two ICLs per domestic connection in the

entire state of Kerala covering 20 electrical divisions of KSEB. The ICLs were collected by KSEB

from the consumers.

The project was curtailed in Kerala and wasn’t successful in getting vendors because the price of

1 CER fell considerable to 2 - 3 Euro and currently stands at 0.5 Euro/CER. The investment is

no longer profitable and discourages investor to put funds in BLY and schemes under CDM.

At present EMC has about 8 Lakh CERs. The present cost of CER in market is not appreciable

for EMC to recover the project cost. BLY failed as a CDM project in India owing to crash of

carbon credit stocks in international markets.

DSM projects in Mumbai

The DISCOM’s in Mumbai have been successful in implementing a significant number of DSM

pilots under the regulations mandated by MERC. Tata Power and R-Infra have attempted most of

them.

As per their tariff order submissions, Utilities have claimed the expenses on DSM projects under

ARR which was either approved by MERC or adjusted in their LMC (Load management Charge)

Fund. The DSM expenses submitted by utilities are not project-wise, hence it is difficult to

calculate the transaction cost of a specific DSM project which is ideally required so as to come up

with benchmark cost for similar DSM projects all over the country. Hence average annual

transaction cost for a portfolio of DSM projects undertaken by a utility was calculated due to

absence of data in an appropriate and standard form.

The average transaction cost for Tata power is calculated to be Rs. 4.72/kWh and is quite

comparable to their average power procurement cost. On the other hand, the average power

procurement cost for MSEDCL is quite high at Rs. 91.75/kWh. The overall transaction cost can

be lowered if large number of DSM projects, even if they are pilot in nature, is attempted. Similar

observation can be made for pilot vs. large scale program where the huge fixed costs in DSM

expenses can be levelled out if the scale of DSM program implementation becomes large.

Discussion:

Mr Mahesh Patankar, MP Ensystems, asked if the future savings were taken into account while

calculating the average annual transaction cost for a portfolio of DSM programs implemented by

Tata Power, Mumbai.

Mr Amit Singh replied that only annual savings were taken into account as there are factors such

equipment failure rate that is needed to estimate the accurate life cycle savings.

Mr Shekhar Khadilkar, TATA Power, Mumbai, suggested that if net savings during the life cycle

of product is taken into account, the transaction cost values will go down further and will justify

the DSM expenses filed through ARR more accurately. Thus, extrapolating of savings should be

done.

Mr Amit Singh agreed that the values will go down and transaction cost using the life cycle savings

will be calculated and added to the report.

Mr Rahul Agnihotri, Meghraj Capital Advisors Pvt. Ltd., added that the current DELP program is

expanding in India at rapid rate and it would be interesting to calculate its transaction cost and

compare these values with other LED projects in India.

Ms. Varalika Dubey, Uttar Pradesh Power Corporation Limited updated that UP was the third

state where the DELP program was implemented and the initiation was done by the regulatory

bodies (UPERC). The initial cost of the LED bulb was 10/ bulb which customer had to pay in 10

instalments. But to their surprise almost 95 % of consumers agreed to pay upfront rather than

going for instalments. This encouraging response has urged them to go for Air- Conditioners and

fans programs.

Prof. Rangan Banerjee, IIT Bombay, raised concerns about the M&V process of DELP

Puducherry program and suggested that M&V for DELP project can be done by doing bill analysis

of participants and non-participants and answered that the third party can be hired for the M&V

process evaluation.

Mr Samved Patil, PricewaterhouseCoopers, answered that deemed saving approach was agreed as

per the contract and the daily usage hours of LED bulbs (3.5 Hrs.) was as per agreement. He also

added that a study about the number of working lamps, faulty ones and the lamps which have

been replaced was carried out.

Prof. Rangan Banerjee, IIT Bombay mentioned that there was a M&V decided (use of RFID

tagged bulbs), the data collected from these RFID tagged bulbs was not used and all this makes

the makes the M&V process a bit suspicious as the number of usage hours might have gone up.

He suggested that, since the implementing agencies have the bills of the participating customers

and statistical methods can be employed to estimate the savings more accurately.

Agricultural DSM projects

Projects from 1980 to 2000: Rural Electrification Corporation Limited (REC) has sponsored

various pump rectification projects in Gujarat, Tamil Nadu, Madhya Pradesh, Karnataka, Haryana

and Andhra Pradesh. Majority of these pilot projects were test runs in order to evaluate the energy,

economic and technical aspects involved in pump rectification.

Projects from 2000 to 2010: In this decade various Ag-DSM projects were introduced in the states

of Haryana, Karnataka, Andhra Pradesh, Madhya Pradesh and Gujarat.

Projects post 2010: After the formation of Energy Efficiency Services Limited (EESL) DSM

projects on large scale have been executed and are planned for future implementation. All major

project reported post 2010, have EESL as a key partner.

Certain other initiatives including feeder segregation, capacitor banks installation, and solar pump

installation have also been attempted.

Ag-DSM projects helped in establishing that energy efficient star rated pumps have poor voltage

fluctuation withstand capability Therefore improvement of voltage profile and power quality at

feeder should go hand in hand with pump replacement. Solar pump installation has been carried

out at various locations in Rajasthan, Gujarat and Chhattisgarh. Although, it has a huge upfront

and maintenance cost, it can be cost effective for remote and sparsely located load points.

Discussion:

Mr K. M. Dharesan Unnithan, Director, EMC, Kerala added to the presentation that DELP

program in Kerala has shown significant results in Kerala, as the load curve of 2009,2010 and 2011

are almost same in spite of 5-7 % increase in consumers every year.

Mr Deepak H Kokate, EESL, clarified that on basis of past experience by the DISCOMs it was

found that the operating hours of bulb in DELP program was around 3.5 hours. He added that

till now 30 load research surveys have been carried out by EESL which supports the exact usage

of domestic lighting for morning and evening hour. Socioeconomic survey also support the

calculation. He mentioned about the DELP program in Maharashtra, where initially 4 bulbs were

given to each customers, but as the response improved, the demand of consumers also increased

and they started to distribute 10 bulbs per customer.

Prof. Suryanarayana Doolla, IIT Bombay enquired about the M&V taken in Puducherry DELP

program and questioned about the load Research reports shared in public domain or not.

Mr Deepak H Kokate, EESL, answered that they had 400 RFID enabled LED bulbs and tried to

get real time data and found that the operating hours about 3.5 hours which was also supported

by load research. He also added that in Mumbai, a response similar to Uttar Pradesh have been

witnessed as about 90 % consumers chose upfront payment model. In Konkan region, the

penetration was only about 68%. The program was again started in January for second upfront

model but the response seen was similar to first round. He also suggested that academic institution

should bring out a common M&V standard which will make the M&V process more efficient.

About load research reports he answered that the reports are shared in public domain and are

available with the DISCOMs.

Mr Desh Deepak Verma, Chairman, UPERC, mentioned about the status of DELP program

which started in 2015 in Uttar Pradesh. He said that they have received encouraging response from

the consumers as no constraints were added to the program and consumers were independent for

making their own choice. He said that by imposing government rules, banking system to

consumers the effectiveness of program decreases as consumers are not interested in following

government formalities and paying in instalments and are more interested in upfront payment

model. Due to good response for LED program, UP is moving forward and will carry out Air-

Conditioner program. He also said that the savings in DELP projects are obvious but also

suggested that bill analysis should be done for M&V as it will show the impact of program and

can help in implementation of other energy efficiency programs.

Mr Aditya Chunekar, Prayas (Energy Group), commented that the load research reports which

was conducted by EESL was not available in public domain and stressed the need to share those

reports on public domains. He also suggested that, we should not always have conventional

economic approach for energy efficiency program and not see each program with financial

perspective as it is the consumers who react to the price.

Mr Amit Singh commented that M&V for energy efficiency programs can not only help in

establishing the obvious savings as in case of DELP projects but can also open a two way

communication window during the surveys. This is particularly important from the perspective of

implementing agencies and utilities as it helps in knowing the customer preferences in a better way

and creating the necessary awareness about various energy efficiency measures. He gave example

of direct sales model that Godrej appliances use to sell their products at the door of their

customers. They carry out one to one interaction with their potential consumers and at the same

time, help them understand the significance of energy efficient appliances. These interactions are

significant in building the response mechanism of customers for demand response programs in

future.

Mr Desh Deepak Verma, added that he also agrees for the need of interaction session with

consumers as it is important that consumers should be made aware about the benefits of the

program.

Prof. Rangan Banerjee commented that he has no doubt that DELP is a cost effective program.

He suggested that when such large scale projects are implemented it is important that the overall

system impact is analysed.

Ms. Varalika Dubey, Uttar Pradesh Power Corporation Limited, added that M&V will help utility

a lot as they can immediately contact consumers for other programs and encourage them for

energy efficiency programs.

Dr. Mahesh Patankar, MP Ensystems, added that it is important to see DSM program beyond

numbers. He also added that M&V horizon should be expanded to incorporate other impacts of

program like how demand response was carried out by utility, the approach used, the program

impact on market, which appliance cost reduced in market, etc. He said that these can be carried

out only if the regulators help in creating consensus among the utilities about the importance of

M&V.

Discussion Session: DR and DSM: Way forward (Based on a questionnaire)

Moderator: Prof. Rangan Banerjee, IIT Bombay

A set of questions were sent to the participants beforehand for discussing the roadmap of DSM

and DR and the role of various stakeholders in moving it forward. The questionnaire is as follows:

1. DSM/DR has significant potential in India. Is the scale and rate of implementation of

DSM /DR projects adequate in the country?

2. What are the barriers to the growth of these projects? What can be done at the regulatory

level to facilitate the growth?

3. Importance of EM&V and role of utilities and regulators on ensuring proper M&V in

place.

4. There are certain successful case studies in DSM space that have happened in the country?

What can be done to replicate such projects at a large scale?

5. What role can academic institutions play in enabling the growth of DSM/DR in the

country?

6. Vendors of energy efficient equipment and DR solution providers play a significant role

in making these products be accessible at competitive rates. What can be done to

encourage vendor participation in these projects?

Prof Rangan Banerjee stated the importance of the session and asked the participants about their

feedback and comments on the questions framed. He requested the Hon’ble chairpersons from

UPERC and TSERC to make opening remarks.

Mr Ismail Ali Khan, Chairman, TSERC.

Demand Response (DR) came into picture owing to system collapse and increase in power

procurement cost of utilities in California. FERC then came up with a regulating framework for

the DR to reduce congestion and improve the availability of energy. The utilities in California

couldn’t stop the power supply as their performance standards are very strict so they couldn’t just

go for load shedding that’s why incentive mechanism was also approved by the FERC. This helped

utilities to design their DR programs that helps them manage their available resources in terms of

volume of energy supply. Regulatory system is important for success for such programs. In India,

DR can be made successful given that pilot projects are attempted. These pilots, if successful, a

regulatory regime can be proposed provided the performance standards of the system are

improved. In morning the average procurement price in USA and European market is around 5-

6 cents/kWh. Taking average of peak and non- peak that tariff for domestic customers is around

12-13 cents and for industry it is around 8-9 cents. But here in India procurement cost is more

than retail price. In my opinion, utility are poor players as they do not have margin to incorporate

incentive mechanism with DR programs. Although a lot of renewable resources has been

integrated but it is not optimally scheduled for dispatch. This is the reason why the states which

claim to be power surplus are facing the issue peak shortage. It is also difficult to dispatch the

renewable resources as well. Any power system is having two main characteristics variability and

uncertainty. Increasing share of renewable resources is going to pose a challenge in dispatch of

generation resources due to uncertainty in supply from these renewable resources. Regulatory

system needs to come up with an innovative mechanism for ancillary services and DR can help a

lot in this regard.

Mr Desh Deepak Verma, Chairman, UPERC

He thanked the project team for organizing the workshop and called it the need of the hour. He

stressed the need of capacity building measures and bringing awareness and sensitivity towards

DSM and energy efficiency among personals in regulatory bodies, utilities and customers. Utilities

consider DSM as something that will shrink their business so a sensitization is definitely required.

The non-conventional energy department is generally the neglected department and don’t have

enough manpower and budget to drive the DSM initiative. So eventually it has come to DISCOMS

to take the activities of demand side management but there is a need to have a separate agency to

take it forward. I hope that new initiatives which have come from government and the way it has

been adopted by state government it will happen sooner or later. There is certainly an urgency to

achieve targets at the government level and a clear mechanism to roll out programs can help a lot

in this regard. Per capita consumption of the country is one third of the global average and UP is

one half of the India’s average so there is clearly a huge potential when we talk of 24*7 power

supply and to everybody. The energy access at national level is 68% and there is certainly a big gap

to fill. There is a need to come up with a planned mechanism to integrate renewable resources.

This kind of workshops provide an ideal platform to discuss such issues. There is also a lack of

clarity in terms of the role of regulators in the new tariff policy. Regulators are taking proactive

steps on their own but are nowhere obligated to do as per the policy. Demand response is actually

consumption response. There is no proper study on consumption pattern and all recommendation

on peak tariff and timings are simply supply driven. A study on consumption pattern of various

customer categories in different regions is required to design an appropriate DR program. There

is ToD tariff in place, but there is no clarity on the peak timings. These studies can help in looking

at recommendations from a broader perspective.

Mr K M Unnithan, Director, EMC Kerala

DSM and DR activities in India have tremendous potential but the work is not progressing at a

necessary pace. Even after significant work on DSM side there is a shortage of supply in peak

period in the state. There has been growth a significant in the sale of induction cookers. In two

years the state, the retail sector sold around 4 lakh induction cookers. The net results is 220 MW

morning peak that has come up. There is also an additional load due to inverters during the peak

time. Recently, EMC came up with the directive for all new inverter connection to be solar and all

old inverter should be solar connected within period of 4 PM. There is some resistance from the

inverters manufactures in the state. There is a big gap in maximum demand and the capacity of

installed transformers in most of the state. If maximum demand is around 3000-5000 MW, the

transformer capacity is around 60,000 or 50,000 MW. Most of the transformer in some states are

getting old and their age is between 15- 50 years. Another directive that was proposed that all the

transformer which come in the range of 15- 50 years, the utility has to test the efficiency. There

was also sharing of learnings from successful DSM initiatives that happened through EMC in other

states. It was observed that some states felt they are not power deficit to take up DSM while some

felt risk associated with it due to lack of any guarantee mechanism. There is also lack of financial

agencies and a successful model for investment in DSM projects. There should be a proper case

study which defined the cost, benefits associated with DSM. Once DSM and DR are in regulatory

framework it will mandate the DISCOM to pursue projects in that direction. It will eventually

percolate to the Industrial sector as well. Even the renewable energy purchase obligations can also

applied for large industries. The industries can invest and utility can benefit from that. There are

many successful DSM models but it is not being replicated in other states. Other countries started

with DSM and then went on for renewables. But in India we started with renewable resources and

till date there is little giving importance to energy efficiency program. Even the manpower

deployment is too low. There is a need to do capacity building, awareness sessions, skill

development, and technology transfer sharing of best practices. There is a list of vendors on the

website of MNRE but there is no such for DSM and energy efficiency equipment.

Mr Pramod Deo, R-Infra Mumbai

R-Infra has done many successful DSM and DR programs pilot programs in Mumbai. There are

two different kind of models in operation, one is the rebate or incentive model for appliance

exchange schemes and the other is the bulk procurement model being done by EESL. Large scale

projects cost too high and it becomes difficult to file this amount under ARR. EESL model is

currently the best model to go for large scale DSM projects. The statistical approach should adopt

for EM&V and based on that program design should happen. M&V process is difficult inside

customer’s premises and the survey mechanism is not authentic all the time. As per academic role,

DSM is very new concept in India. People think why utilities are interested in energy efficiency as

they are in business of selling power. We need to make people educated not only from economic

point of view but also from environmental point of view. Utilities can hire DSM or DR experts

and form DSM team to pursue this at a broader scale. Coming to vendors, presently vendors are

not interested in DSM programs as they don’t want to comprise on economic front. So, awareness

should be created among vendors which will help in implementing DSM programs in India.

Mr Shekhar Khadilkar, Tata Power Mumbai

There have been a lot of talk in last 5-6 years about DR but only 3-4 pilots have been implemented

in India. Tata power has been involved in some of the major DR programs that have been tried.

One which was implemented from 2011- 2014 in Mumbai where 15 MW of DR capacity was

reached. This was an aggregator based DR program done in collaboration with Customized Energy

Solutions (CES). This program was quite successful where several experiments with different load

types were conducted. Commercial loads, municipal water pumping, sewage treatment plants,

hotels and hospitals were some of the participating load categories with majority of the end use as

HVAC load. There was a lot of learnings about the customer behaviour, their ability to control

load, etc. The target was 25 MW, but since 2015 the power scenario in country started changing

drastically. Power is available at 50 paisa per unit through exchanges and in day time it hardly

crosses Rs. 3.5/kWh. It should be understood that unless DR is commercially viable, no utilities

will promote it and it will always remain at pilot stage. A fully automated DR with Honeywell at

one of the hotel was tried. It was a good experience but the cost was too high to scale it up. I do

not see to be ever implemented at commercial scale in near future. Unless and until the program

targets 300-400 MW of DR capacity, it won’t even matter in the present situation. DR has to be

tried on highly concentrated loads, it will be not feasible in agricultural sector where we have

segregated loads. Over years, the power constraints have also reduced drastically, even the cost of

power for utilities has come down. Earlier when Tata power started DR program, it used to

purchase power at Rs. 9 to 11 per unit since in Mumbai load shedding was restricted. So, it was

commercially viable to pay incentives of Rs. 2 to 4 to customers. On DSM side, Tata power has

implemented several industrial programs. It has been offering several energy efficient appliances

at 50 % cost through utility. There is energy audit program, thermal storage programs, some of

the standard offer programs are also being tried. This has been an interesting experience but scaling

these pilots to large scale raises questions about the funding level and source available. There

should be some funding mechanism which can create considerable fund for DSM programs. EESL

model is scaling because the whole funding is done by customers itself that’s why it has not been

objected by anyone in spite of any EM&V in place. So, these point has to be taken in account for

scaling the DSM or DR program.

Dr Mahesh Patankar, MP Ensystems

DR should be seen as an insurance for grid failure and should be looked at as a grid management

tool. If the supply variability due to renewable integration is looked into, demand response makes

all the sense. If we can shift high cost low returns resulting from DR that is getting loaded on to

the demand side management budgets and can integrate and subsume most of that cost as part of

smart grid investment, then only the occasional costs will be loaded onto the grid. It can be a taken

up as a part of smart grid initiative rather than just a demand management tool. There have been

around 20 events of DR called in a year, this can be go up to 200 events of DR of 1hr each and

can be tried as a smart grid project. Thermal energy storage, heat pumps, solar PV, small wind,

commercial loads. In addition to capacity building and preparation of curriculum for DSM courses,

academic institute can play a big role in EM&V. Taking an example from South Africa, the

department of energy has outsourced all the EM&V work to University of Pretoria where an

ecosystem of students and consultants carry out the M&V part of the DSM projects. There is a

need to come up with a rationalised cost mechanism for DR. Industry and utilities can together in

a joint program where the industry can come forward to implement some of the pilot projects.

Ms Varalika Dubey, UPPCL

Utilities should be mandated as per acts and regulations to pursue DSM and energy efficiency

projects. It has taken a lot of years for the government to realise that Utilities should come under

the PAT scheme. The level of commitment about DSM at top level is also doubtful. There has

been a lot of encouraging response for DSM programs in UP and it need to be scaled up to large

scale programs.

Mr Sumit Malik, Godrej

Godrej is working on a DSM appliance exchange program under the flagship of Godrej appliances.

Products are Single door and double door refrigerators, air conditioners and washing machine.

Here they have direct sales method for approaching customers. They go door to door to

consumers to promote their product and make customers aware of the benefits and energy saving.

Convincing customers is a challenging task. Direct sales division of Godrej manages this work for

them. In one year, we have sold 6000 five star rated refrigerators and air conditioner in this

program for R-Infra and Tata power combined. Our DSM appliance program received well in

customers. Attractive cost of the product is the key factor for customers other than that flexibilities

offered in the program also play an important role. Consumer can customize their mode of

payment, specific requirement and product specification. If a volume is promised by some utilities,

it would be easier to scale up the programs.

Shankar Sapaliga, International copper alliance

There has been to be some guidelines about replacement of HVAC equipment procured in these

DSM programs as they are energy guzzlers.

Mr Ramit Malhotra, ICF International

There are no guidelines on conducting the cost effectiveness tests for DSM programs. A set of

standard M&V protocols can be decided for the whole country by taking into confidence all the

regulators as it will streamline the M&V process for such programs.

Prof. Rangan Banerjee, IIT Bombay

There is a sort of scepticism about M&V that is present among the stakeholders. Protocols are not

to be made up in isolation. There need to be a consensus about the importance of M&V in DSM

planning, design and implementation. Developing M&V protocols is slightly complicated because

in public domain lots of protocol are available but it’s about putting it all together to see that it

happens without adding too much of cost. The people who want to finally use these protocols

need to consider that it is important and it can go as a feedback into the decision making process.

Mr Mohan Iyer, Unidyne

Heat pumps can replace the electric resistance heaters in vertical buildings which contribute of

around 1200 KW load used for 1hr every day. Heat pumps have the potential to reduce 10% of

the connected load. The cooling tower technology can be modified to eliminate the most power

intensive part of it with a payback period of almost a year.

Mr Rahul Agnihotri, Meghraj Capital Advisors

DSM programs can be done on a feeder level as it would be easier to measure their impact more

accurately.

Mr Aditya Chunekar, Prayas

A case for Demand Response and other benefits of Demand Response which includes cost, the

EM&V protocols, penetration of DR in customer segments and technological advancement is

required in DR. People think that the EM&V process is expensive but there are innovative ways

of doing it which can decrease the cost. There are new technologies coming up which they can

take mainline power and distribute into different appliances but going ahead with these

technological advancement, the EM&V would not be difficult and expensive in future. Thus, the

EM&V process should not only include just savings as well but also look into the impact of DSM

programs on market and on consumers.

Vote of thanks – Prof. Suryanarayana Doolla

The workshop concluded with a vote of thanks from Prof. Suryanarayana Doolla. He thanked all

the participants on behalf of IIT Bombay and Shakti Foundation that they spared a day from their

busy schedule to attend the workshop.

Annexure 1: Workshop Program

9:30 to 10:00 am

Registration & Tea

10:00 to 10:30 am

Inauguration

Welcome address by Prof. Rangan Banerjee, IIT Bombay

Introduction to Shakti Foundation – Ms. Vrinda Sarda Project Overview and Deliverables – Prof.

Suryanarayana Doolla

10:30 to 12:30 am

Project report presentations

Technology Assessment for Demand Response Speaker: Prof. Suryanarayana Doolla

Measurement & Verification standards for Demand Response

Speaker: Prof. Suryanarayana Doolla Framework for Demand Response in India

Speaker: Prof. Rangan Banerjee Case studies of DSM/DR Projects

Speaker: Mr Amit Singh

12:30 to 1:30 pm

Discussion session on project reports

1:30 to 2:30 pm

Networking lunch

2:30 to 4:00 pm

Discussion session on DR & DSM: Way forward (Based on the questionnaire)

Regulators Utilities/Discoms

Vendors

4:00 to 4:30 pm

Tea/Coffee Break

4:30 to 5:00 pm

Concluding Remarks & Vote of Thanks by Prof. Suryanarayana Doolla

Annexure 2: List of Participants

Name Designation Organization Email ID

Desh Deepak Verma Chairman

Uttar Pradesh Electricity Regulatory Commission chairman@uperc.org

Ismail Ali Khan Chairman

Telangana State Electricity Regulatory Commission chairman@tserc.gov.in

Ramit Malhotra Associate ICF International ramit.malhotra@icfi.com

Vijay J Motavar Executive Engineer

Madhya Gujarat Vij Company Limited v.motavar@mgvcl.com

Krushnabhai Executive Engineer

Madhya Gujarat Vij Company Limited k.desai@mgvcl.com

Avinash Khemka Chief Manager (HVAC)

International Copper Association India

avinash.khemka@copperalliance.asia

Shankar Sapaliga

Senior Consultant (HVAC)

International Copper Association India

shankar.sapaliga@copperalliance.asia

Navneet M. K. Area Manager

Unidyne Energy Environment Systems Pvt. Ltd.

sales.heating@unidyne-energy.com

Amit Kumar Sil Joint Advisor (Engineering)

West Bengal Electricity Regulatory Commission amitkrsil@yahoo.com

Mohan Iyer Managing Director

Unidyne Energy Environment Systems Pvt. Ltd. msi@unidyne-energy.com

Nirjhar Chakravarty

Sr. GM & National Head [ Direct Sales ]

Godrej & Boyce Mfg. Company Ltd [ Appliances Division ] nirjharc@godrej.com

Amol Bhutad

Lead Engineer

Tata Power Mumbai

amol.bhutad@tatapower.com

Shekhar Khadilkar Head- DSM and PP

Tata Power Mumbai sdkhadilkar@tatapower.com

Rajendra Pandya Senior Project Executive

Gujarat Energy Development Agency rnpandya@geda.org.in

Anurag Thatte Deputy GM Reliance Energy anurag.thatte@relianceada.com

Mukesh Bhanushali Deputy GM Reliance Infrastructure Ltd.

mukesh.bhanushali@relianceada.com

Pramod Deo Addl. V P Reliance Infrastructure Ltd. pramod.deo@relianceada.com

K. M. Dharesan Unnithan Director

Energy Management Centre - Kerala kmdunnithan@hotmail.com

Aditya Chunekar Senior Research Associate

Prayas (Energy Group) aditya@prayaspune.org

Sumit Malik Deputy GM

Godrej & Boyce Mfg. Company Ltd maliks@godrej.com

Samved Patil Manager PricewaterhouseCoopers Pvt. Ltd

samved.patil@in.pwc.com

Mahesh Patankar Managing Director MP Ensystems Advisory Pvt. Ltd.

mahesh@mpensystems.com

Shaishav A Bhatiya Junior Engineer

Dakshin Gujarat Vij Company Limited surat@gebmail.com

Shuboday Ganta Manager PwC India shuboday.ganta@in.pwc.com

Varalika Dubey Executive Engineer

Uttar Pradesh Power Corporation Limited varalika2011@gmail.com

Deepak H Kokate Project Manager EESL dhkokate@eesl.co.in

Vrinda Sarda

Programme Associate (Electric Utilities)

Shakti Sustainable Energy Foundation

vrinda@shaktifoundation.in

Rahul Agnihotri Senior Manager

Meghraj Capital Advisors Pvt. Ltd. rahul@meghrajindia.com

Harman Preet Singh Senior Analyst

MP Ensystems Advisory Pvt. Ltd. harman@mpensystem.com

Vinda Dravid Analyst

MP Ensystems Advisory Pvt. Ltd. vinda@mpensystem.com

Sonia Shukla Senior Analyst

MP Ensystems Advisory Pvt. Ltd. sonia@mpensystem.com

Balu L Ugale Deputy Director (Tech.)

Maharashtra Electricity Regulatory Commission balu.ugale@merc.gov.in

Y.N.Khade Asst. Engineer BEST yuvraj.khadke@yahoo.com

G.G.Gokhale Superintendent DSM BEST gajanangokhale2011@gmail.com

Prabhakar Pethkar Superintendent Engineer MSEDCL prabhakarpethkar@gmail.com