Aggregating DSM Opportunities Among Industrial Consumers at Utility Level for Low Carbon Growth

Recognizing the enormous potential for DSM among industrial consumers, TERI, with support from MacArthur Foundation, undertook a study to explore the scope for aggregation of the DSM opportunities among SME industrial consumers in India. For the study, a partnership with the largest private sector power utility, Tata Power, was forged. About 100 SME customers were selected in consultation with Tata Power spread across Delhi, Ajmer, and Mumbai. The selection of the SMEs was followed by unit level energy assessment studies. The aggregated demand for energy efficient equipment like motors, air compressors, lighting and ceiling fans were then estimated. Based on the interactions with various stakeholders, suitable business models, which could be adopted by distribution utilities in India have been developed.

Through its extensive field work, the project team was able to identify a host of energy saving opportunities at the ground level. A few key findings:

• Most of the MSME units still use old and inefficient standard efficiency class (IE1) electric motors; about 40% of the motors have been rewound multiple times.
• There is a large potential for energy saving in the screw compressors by the adoption of variable frequency drive (VFD) or by the adoption of PMSM air compressors.
• More than half of the total number of lamps in use are of conventional type.
• Majority (99%) of the fans were of the conventional type. Very few units have adopted star-labelled ceiling fans or brushless DC (BLDC) fans.
• Cumulatively, there exists an electricity saving potential between 14–18% among the MSMEs studied, with attractive return on investment (RoI).

One of major challenges encountered during the project was to convince the SME entrepreneur to permit energy audit of their plant and share necessary data with the auditors. This was overcome with support from the utility engineers and the high credibility of TERI in energy audit field. Success stories of similar work undertaken by TERI in other parts of the country were also shared to break the ice.