Workshop explores strategies for managing energy demand in India as part of push to double energy efficiency
Over 50 experts gathered in Delhi on 14 May to discuss opportunities for large-scale programmes on demand flexibility and demand-side management (DSM) in the country. This happened during weeks of record heat in the city, with temperatures surpassing 47 degrees Celsius. Driven by air conditioning usage, peak electricity demand reached 8,000 MW - unprecedented for the month of May, and a clear example of the growing pressure on the country’s power systems.
Importance of demand flexibility
India’s electricity demand is soaring and is expected to reach 260 GW this year, a 7% increase from 2023. At the same time, the country has an ambitious goal of integrating 500 GW of renewable capacity by 2030, and is committed to doubling the rate of energy efficiency improvement by 2030 in line with international goals. Keeping pace with these changes will call for increased grid flexibility to ensure quality power supply, with demand flexibility being a key strategy.
Demand flexibility is the voluntary reduction or shift of electricity use by customers to help the power grid balance its supply and demand. Several regulatory updates and demand flexibility pilots have already been conducted in the country already. However, opportunities for large-scale nationwide programmes remain untapped. During the workshop, hosted by SEforALL and Mission Efficiency, several government representatives, think tanks, distribution companies (DISCOMs), and academic institutions shared opportunities and challenges to scale up demand flexibility in the country.
Shri S. C. Saxena, Executive Director & Head, National Load Despatch Center, Grid India, explained how supply traditionally follows demand. But now, as disruptive changes are occurring with technologies such as variable renewable energy and distributed energy resources, there is the need to also have demand to follow the supply of renewables. Mentioning India’s limited gas resources for grid flexibility, he highlighted the importance of demand flexibility.
In his keynote remarks, Shri Milind Deore, Secretary, Bureau of Energy Efficiency, mentioned how the Bureau is leading the charge, with 61 DSM cells established by DISCOMs and 32 states and union territories having notified DSM regulations. “Demand-side management helps both consumers and DISCOMs,” he highlighted.
Current barriers
“Around 60% of the challenges are on the technology front,” explained Dr. Meenu Mishra, General Manager, BSES Yamuna Power Ltd (BYPL). Although the Government of India has initiated a smart meter programme under the Revamped Distribution Sector Scheme (RDSS), only around 5% of the sanctioned smart meters have been installed.
Furthermore, “even the smart meter data alone is not enough to understand the operational patterns of individual appliances, which requires appliances embedded with IoT [Internet of Things] capabilities,” stressed Mr. Gopal Nariya, Vice President, BSES Rajdhani Power Limited (BRPL).
New types of loads are being added to the grid as the country is undergoing an energy transition. Therefore, this level of granular data is crucial to estimate the flexibility potential across sectors and consumer categories and to enable measurement and verification without using the deemed savings approach that DISCOMs are not confident about. Transparent and frequently updated load data is important.
Availability of funds to transition from pilots to large-scale demand flexibility programmes is a crucial hurdle. A few opportunities were discussed in the brainstorming sessions. Currently, the benefits of the demand flexibility programmes lie mainly with the customers. There needs to be a mechanism in the regulations that also pass the benefits of these programmes to DISCOMs. Balancing the existing funds between different programmes such as energy subsidies, energy efficiency, and demand flexibility could be considered. Climate funds and carbon markets could also be explored.
Improving policies
Several policy instruments could help demand flexibility projects. For instance, there is a provision for DSM funds within India’s DSM regulations. Allocating a minimum share of these funds for demand flexibility projects would be helpful. Importantly, standard guidelines for monitoring and verification must be included in the regulations to quantify savings.
An added value of demand flexibility would be enabled by allowing demand flexibility to participate in ancillary services. Furthermore, similar to renewable portfolio standards that mandate a minimum share of energy purchase, demand flexibility portfolio standards could mandate a minimum capacity purchase. Demand flexibility should also be recognized as a resource and be included in resource adequacy planning in the Indian Electricity Grid Code.
Examples in action
Several pilots in different sectors are being explored. For example, GreenTree Global is working with agriculture loads in Haryana, where electricity is supplied in three eight-hour shifts. They are experimenting to supply power only during the day shift to maximize solar utilization and reduce peak loads.
MPEnsystems and Tata Power conducted a 23-day pilot at Bhandup pumping station, Mumbai, and achieved a shift of 345 kW for three hours daily. Brihanmumbai Municipal Corporation’s water pumping stations together are expected to shift a monthly demand of 50 MW, a quantity of supply able to cater to the population of a rural district. Water treatment plants have a large demand flexibility potential with easily implementable changes.
Tata Power Delhi Distribution Limited (TPDDL) is working on behavioral demand response programmes in the residential sector in Delhi. Having realized that demand flexibility is simply a jargon term for the customers, they found it important to connect one-on-one with customers and explain the topic.
Through the Urja Arpan programme, customers were educated and “climate-conscious citizens” registered themselves in the programme even without any monetary incentives. Their contributions were reported back to them in the form of carbon savings.
Looking ahead, India’s power sector is well-equipped with successful examples that can be replicated easily in sectors such as agriculture, water pumping, and residential energy use. Now, the focus is on rapidly scaling up utility-led, regulator-approved programmes. In turn, this will require concerted efforts in regulation, data collection and research, and technology roll-out, driven by conducive policy frameworks.
Mission Efficiency will continue supporting the ecosystem of partners in India with sharing information, continuous learning, and harnessing opportunities to collaborate towards flexible, sustainable, and future-proof energy systems.