It's time for utilities to manage power demand creatively

18 Jan 2019

Demand Side Management, or DSM, can help power utilities manage rising electricity demand without compromising consumer interest

The concept of Demand Side Management (DSM) originated in 1970, but its full potential as an effective tool for achieving demand-supply balance has started getting recognition in many parts of the world only in recent years. This has been triggered by the challenges in grid management in the context of the transitions taking place in the energy sector while moving towards a low-carbon economy through a larger focus on renewable energy and energy efficiency.

DSM basically refers to actions by an electric power utility aimed at altering the pattern of consumers’ electricity consumption without compromising on their interest and also without adversely affecting its own finances.

In Indian utilities, the effective deployment of DSM has been rather slow and sparse. However, this has started changing slowly and the true value of DSM as an important and integral strategy in utility planning and operation is gaining recognition. A number of legislative, policy, and regulatory measures have been put in place to facilitate this. The establishment of the Bureau of Energy Efficiency (BEE) is a good example. It has been making efforts in this regard in a big way. A number of regulatory commissions have also notified DSM regulations. It can therefore be legitimately expected that DSM activities will pick up fast in Indian utilities in the coming years.

The changes taking place in the energy landscape of the country, such as rapid growth in demand, aggressive promotion of variable energy sources like solar and wind, promotion of e-mobility, the growing need for peak power reduction, improved reliability, reduction in emissions, making power available to all at affordable rates, etc. have also brought to spotlight the relevance and urgency for this. Further, many recent studies have shown that DSM will be one of the most effective options to meet the power grid’s flexibility requirements in the context of increasing penetration of variable and intermittent power.

Utilities have a crucial role in pushing forward DSM initiatives, but how are they getting ready for this? In the past five to six years, TERI has been working closely with a number of utilities in the country in formulating DSM action plans and in capacity building exercises. This has shown that quality load research reports – which form the basic edifice on which the DSM action plans are formulated, programme documents designed, and implementation strategies decided – are not available in many cases. These have to be utility-specific exercises in this regard since the DSM strategies could vary from utility to utility depending on the consumer mix, end-use energy consumption pattern in different consumer categories, socio-economic factors, physical characteristics of the utilities, operational features, etc.

In finalising the action plans, it would also be important to capture the changes in behavioural patterns of different categories of consumers in usage of electricity. Further, pragmatically exploring the possibility of adopting smarter ways for managing demand and deployment of smart grid technologies, taking a cue from countries like Japan, US, etc. is also important. Dynamic demand response schemes, grid to vehicle (G2V) and vehicle to grid (V2G) technologies in electric vehicles and solar rooftop with batteries also hold forth interesting prospects. Viewed in this perspective, planning of DSM activities should be seen as a highly professional exercise. TERI’s experience shows that one of the main constraints generally faced in most Indian utilities in load research and preparing DSM strategies is the lack of data availability on load patterns of different consumer categories at a granular level in a digitised form. This would be an important area to focus on in moving forward. There is also a need to ensure that the interventions lead to improvement of the financial health of the utilities.

Successful DSM would be a win-win situation for utilities, governments, regulators, manufacturers, and consumers and hence all have a role to play in the mission ahead. Pro-active regulatory support; improvements in the quality and reliability of supply; choice of appropriate business models for implementation; continuous involvement and commitment of utilities; and public outreach programmes, besides research and consultancy support for load research, design of programme documents, etc. would merit special attention in this regard.