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Electricity Demand Side Management and End-use efficiency


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This presentation give an overview about demand side management and end-use efficiency for electricity supply systems. It was prepared for energy auditor training in Nepal in the context of GIZ/NEEP programme. For further information go to EEC webpage:

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Electricity Demand Side Management and End-use efficiency

  2. 2. PRESSURE POINTS OF CONTEMPORARY ELECTRIC UTILITIES:  Peak demand and energy crisis in many utilities due to ever rising demand supply gap  Need for optimization of generation and network utilization  Regulator led energy efficiency mandates  Strong lobbying from environmental groups  Resource constraints and customer demands for cheaper rates  Increased operational flexibility needs  Competition, thanks to reform process and open access
  3. 3. TRADITIONAL UTILITY PLANNING PROCESS, NEEDS & TOOLS Supply side alternatives Capital Costs Fuel costs Other O& M costs Load forecasting Generation Planning Production Costing Financial Analysis Rate Allocation Iterate as necessary Need to Predict & Provide for: Long Term Planning More Lead time Rising Costs Environmental Impacts Tools: Least Cost Planning & Demand Side Management
  4. 4. LEAST COST PLANNING: “How much energy efficiency could we achieve if all the potential end-use energy efficiency were achieved which is economically competitive with conventional forms of energy”--- Roger Sant W. -- The Energy Productivity Center Four basic steps of Least Cost Planning(LCP)are: Understand how energy is used (end-use energy) Identify technical potential of high end-use efficiency Evaluate the benefits and costs from societal perspective Apply engineering & economic analysis Introduced to persuade energy planners & policy makers that there is sizeable potential to improve EUE with following considerations •Customer & Utility Considerations •Financial commitments involved •Program Implementation •Monitoring & Evaluation
  5. 5. WHAT IS DEMAND SIDE MANAGEMENT ? “DSM is planning, implementation & monitoring of Utility activities designed to influence consumer use of electricity in ways that will produce desired changes in the magnitude and pattern of load either directly caused or indirectly stimulated by the utility.” ---Clark W. Gellings, Electric Power Research Institute Broad purview of DSM  will influence customer use  must achieve selected objectives  should be evaluated against non - DSM alternatives  identify customers response  evaluation process How to achieve DSM? • Load Management • End Use efficiency Improvement • Development & Promoting EET’s.
  6. 6. DSM LINKAGES-INDUSTRY SECTOR Peak Clipping Valley Filling Load Shifting Strategic Conservation Strategic Load Growth Flexible Load Shape P.F and LF Improvement Lighting system Process utilities Process modernization Drives Furnaces Devices & controls Specific menu of energy efficient technologies to match each end use option Alternative pricing like TOU tariffs Regulatory measures Incentives for EET’s Energy Service Companies promotion Designing customized DSM programs Utility Load Shape Objectives DSM Implementation Methods Industry sector potential End Uses DSM Technology Options
  8. 8. BROAD OPTIONS AND TECHNOLOGIES FOR INDUSTRIAL DSM  Tariff and revenue related  Static metering, reactive power billing, maximum demand charges, TOU tariffs, incentives etc.  Low /medium cost technical retrofits in:  Plant/Process utilities, drive side modernization ,furnace controls and automation.  Illumination system improvement options including:  LEDs, CFLs, low loss ballast's, microprocessor based controls, high efficiency reflectors etc.  New plant / large capital measures  Process r & m, retrofits, adoption of distributed controls, automation etc.  Energy Management Techniques  monitoring & targeting, EM staff training & motivation, mandating and sponsoring energy audits
  9. 9. EVALUATION OF DSM OPTIONS  As seen from the above, various identified end use efficiency,DSM measures, offering energy and demand saving opportunities qualify to be assessed for supply side impact, benefits and costs,(as cost of saved capacity and cost of saved energy).The results relate to local utility attributes and considerations .  These are then compared with alternative, corresponding, supply (utility) side costs of capacity addition and long run marginal cost of generation.  Only those options of DSM are shortlisted, which are cheaper than supply side costs.  To arrive at cost of saved capacity CSC,and cost of saved energy, following relations, criteria can be adopted.
  10. 10. RELATIONS AND CRITERIA….. » Capital recovery factor (CRF) = d × (1 + d)n / [(1 + d)n - 1] where d = utility discount rate & n = measure life » Total DSM measure cost = initial cost × [ 1 + (1/(1+d/100)m ) + (1/(1+d/100)2m + …...) where d = utility discount rate & m = device life & the series includes all terms where exponent is less than the measure life » Cost of saved capacity (CSC) Rs/kW or Rs/kVA= (Total measure cost (Rs)) ((Saved capacity kVA or kW × PCF) / (1-TDLF) (CUF)) » Cost of saved energy (CSE) Rs/kWh= (Total measure cost (Rs) × CRF) (Annual Energy Savings (kWh))
  11. 11. …...RELATIONS AND CRITERIA  T & D loss factor of local HT & EHT segment for measures relates to HT or EHT segment end use = TDLF (HT)  T & D loss factor of local LT segment for measures relates to LT segment end use= TDLF (LT)  Capacity utilization factor (CUF)is also PLF of the local power plants.(A low CUF say in hydro power plants as against base load thermal plants can influence measure cost benefits)  Peak Coincidence Factor (PCF), indicates proportion of the end use equipment actually operational, during system peak hours.  Utility discount rate, is denoted here as, d.  Each DSM measure cost is assessed for a measure life of 25 years, for parity with considered utility plant life in account books, and equals the net present value of measure cost for 25 years of measure life where m is number of replacements within 25 years, and d is the discount rate.
  12. 12. NEXT STEPS IN DSM PROCESS:  Analyze and merit rate each of the choices, where the cost of saved capacity & cost of saved energy of DSM measure is less, as compared to cost of capacity addition and long run marginal cost of generation(being utility side SSM costs).  Once all the DSM interventions are merit rated, the logical next step is the development of Detailed Project Reports and plans for implementation of short listed DSM interventions, in a programmatic manner, adopting a standard project management cycle.
  13. 13. ILLUSTRATIVE CASE STUDY OF DSM OPTION EVALUATION….. (APPLICATION OF LIGHTING VOLTAGE REGULATORS IN MUNICIPAL WATER PUMP HOUSES)  The Fluorescent tube manufacturers list the rated or nominal wattage on any given tube as the objective wattage which the tube should dissipate under prescribed conditions of operation.  The actual wattage, invariably higher, however depends upon factors such as supply voltage.  A lighting voltage controller operates on the well known principle that reduction in input power can be achieved by voltage optimization without significant drop in light output.  A typical device operates by bringing in, an impedance across the lighting circuit, to control supply voltage and current.  The lighting voltage controllers are modular in configuration and can be used on lighting circuits and are applicable for Sodium Vapor and Mercury vapor lamps as well.  Based on end user feedback, Energy Savings of 10% and Demand Savings of 15% are envisaged through application of the Lighting Voltage controllers.
  14. 14. Lighting System kW Load = 24 PF of Lighting circuit = 0.85 Lighting system kVA Load = 28.2 Hours of annual operation = 8760 (indoor application) Peak coincidence factor = 1.0 Utility discount rate = 0.09 End User Electricity Cost = Rs.2.46/kWh Demand Charges = Rs.170/kVA Capital Recovery factor = 0.102  Transmission and Distribution Loss Factor for HT Industry (TDLF) = 0.3132 Capacity Utilization Factor (CUF) = 0.725 Energy Savings (kWh) scope = 10% Demand Reduction (kVA) scope = 15% Investment in Rs/kVA rating = 1800 Measure Life, Years = 25 Years Device life, hours = 100,000  Total Measure Cost = Rs.71,144 ,being initial investment + discounted costs of future replacements over measure life period ….APPLICATION ANALYSIS RESULTS IN A MUNICIPAL WATER PUMPING STATION……
  15. 15. Present annual energy consumption kWh = 181332  Annual electricity savings, kWh@ 10% = 18133 Annual Demand savings @ 15% = 4 kVA * 12 months  Rupee value of annual electricity (kWh) savings = Rs44608  Rupee worth of annual demand (kVA) savings = Rs8160 Total annual savings = Rs52768  Investment for lighting controller (Rs.1800/KVA*Lighting system kVA Load) = 50800 Simple Payback Period Years = (Investment/Rupee value of annual electricity cost savings) = less than 1 year …END USER COST BENEFITS…..
  16. 16. Cost of Capacity saved (CSC) in Rs/kW= (Total Measure Cost (Rs.)) / ((kW Capacity Saved*PCF)/ (1-TDLF)(CUF)) = (71144) /((2.4 * 1)/ (1-.3132)( 0.725)) = Rs. 14760 / kW Cost of Energy Saved (CSE) in Rs. /kWh= (Total Measure Cost(Rs.)*(CRF)/(Annual Electricity Savings in kWh) = (71144 * 0.102)/(18133) = Rs. 0.40 / kWh The end user simple payback period of less than 1.0 Year, alongside attractive utility side costs of Rs. 14760 per kW saved capacity ,as against utility side cost of Rs 40,000 per kW of capacity addition; and, Rs0.40/kWh cost of saved energy, as against Rs 2.00/kWh average utility cost of supply, render the DSM measure a win-win option. The state Utility / DISCOM could develop a DSM program for all municipal pump houses in its coverage area and incentivize stakeholders suitably. It may be appreciated that a well designed DSM program can address energy efficiency improvement at macro level, considering all local factors.  Analytics in an iterative manner, for sensitivity factors like peak coincidence factor, TDLF,CUF, discount rate, can be attempted for customized, localized, program design for various options. …..SUPPLY SIDE COSTS.
  17. 17. GENERIC DSM MEASURES IN LOAD MANAGEMENT, PROCESS/PLANT UTILITIES IN INDUSTRY SECTOR…  Power factor improvement  Conventional ballast's on FTL’s replaced by low loss ballasts  Adoption of energy efficient CFL’s/LEDs ,Magnetic induction lamps, LPSV, HPSV lamps…  Adoption of Lighting voltage controllers  Motor Soft starters/Energy savers adoption  Replacement of old pumps by high efficiency pumps  Replacement of old fans by high efficiency fans  Application of VSD’s, cogeneration etc, for EE  Replacement of old compressors, chillers, by energy efficient compressors, chillers.  Distribution system upgrades in water pumping, compressed air, chilled water systems for EE  Material handling system upgrades for EE.  Adoption of distributed control systems, process automation for EE  Furnace, heater upgrades for EE.  Replacement of old rewound motors by new high efficiency motors. motors………
  18. 18. BARRIERS TO DSM…  Limited Information & Awareness  Lack of adequate infrastructure  Perceived risk of implementing new EE technologies  Absence of codes/standards on EE.  Lack of reliable and credible service organizations that can provide full range of project implementation services  Limited Availability Of Capital for financing EE Projects  High costs for consumers to implement EE projects  Administered energy tariffs which distort economics.  Absence of any regulatory mandate to review all options on DSM & Supply Side Management to develop a least cost capacity expansion plan
  19. 19. ….BARRIERS TO DSM  Problems with quality of power  Lack of experience in planning, designing & implementing DSM programs  Absence of load research information, databases on energy end use segments, reliable data on peak coincidence factors etc.  Lack of resources specifically allocated for EE  Lack of adequately skilled staff to initiate EE measures  Inadequate participation and attention from Govt. and policy makers….
  20. 20. ENABLERS FOR DSM MARKETS – A WISH LIST:  Regulators and utilities start introducing the concept of LCP,DSM in the power sector planning frame work  Developing nations initiate programs on EE in electricity generation, transmission, distribution and industry sectors  Developing nations initiate design and adoption of appropriate energy conservation laws and regulations, efficiency standards & labeling, rational electricity pricing and incentive schemes for EE  Regulators and utilities initiate regular load research and development of customer databases on energy use and efficiency improvements for analytics and planning.  Promotion of energy conservation through mass media - based awareness campaigns
  21. 21. CONCLUSIONS  DSM is a viable, win-win cost effective alternative to SSM.  There is a good case for DISCOMs to develop customized DSM programs for end users like industry clusters, agricultural pump sector, municipal water pumping, street lighting, PSU townships, industrial estates, special economic zones, commercial buildings etc., due to diffused yet significant bulk nature of these end user entities and energy efficiency margins.  •DISCOMs may also consider developing customized DSM programs, involving distribution upgrades, automation, kVAh billing, static metering, TOD tariffs etc, to bridge demand supply gaps efficiently, without revenue losses.  Current crunch times at utilities call for load research and comprehensive re-visit to various end use segments for structured DSM program design and implementation, which could be highly cost effective, as against supply side capacity augmentation initiatives.