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SUMMER INTERNSHIP REPORT

ON

Challenges in Delhi Power Sector Regarding Domestic Consumers

and Viable Solution through Demand Side Management and

Renewable Energy

UNDER THE GUIDANCE OF

Mr. N.V.Kumar, Deputy Director, CAMPS, NPTI &

Mr. Abhishek Moza, Deputy Secretary, DERC

At

Delhi Electricity Regulatory Commission, Delhi

Submitted By

BALAJI RAPARTHI ROLL NO: 25

MBA (POWER MANAGEMENT), 11th Batch

(Under the Ministry of Power, Govt. of India)

Affiliated to

MAHARSHI DAYANAND UNIVERSITY, ROHTAK

AUGUST, 2013

CERTIFICATE

DECLARATION

I, Balaji Raparthi, Roll no 25 / Semester III / Class of 2012-14 of the MBA (Power Management)

Programme of the National Power Training Institute, Faridabad hereby declare that the Summer

Training Report entitled “Challenges in Delhi Power Sector Regarding Domestic

Consumers and Viable Solution through Demand Side Management and Renewable

Energy” is an original work and the same has not been submitted to any other Institute for the

award of any other degree.

A Seminar presentation of the Training Report was made on ………………….. and the

suggestions as approved by the faculty were duly incorporated.

Presentation In-Charge Signature of the candidate

(Faculty)

Counter signed

Director/Principal of the Institute

ACKNOWLEDGEMENT

I am having great pleasure in presenting this report on ‘Challenges in Delhi Power Sector

Regarding Domestic Consumers and Viable Solution through Demand Side Management

and Renewable Energy’. I take this opportunity to express my sincere gratitude to all those

who have helped me in this project and contributed to make this a success.

I would like to express my sincere gratitude to Mrs. JAYSHREE RAGHURAMAN,

Secretary, Delhi Electricity Regulatory Commission for giving me an opportunity to

work in DERC.

I also thank the entire staff of DERC for their immeasurable cooperation necessary for

carrying out project related work.

I would like to express my heartiest thanks to Mr. Abhishek Moza, Deputy Secretary,

Delhi Electricity Regulatory Commission for giving me a chance to work with him,

providing me with the necessary resources, ideas and facilitating me in this project.

I express my heartfelt regards to Mr. J.S.S. Rao, Principal Director, Corporate Planning

and management (NPTI), Mr.S.K.Chaudhary, PRINCIPAL DIRECTOR, CAMPS, Mrs.

MANJU MAM, Director, NPTI whose guidance was of invaluable help for me. I am also

thankful to my internal project Mr. N.V.Kumar, Deputy Director, NPTI for her support

towards completion of my project.

I also extend my thanks to all the faculties in CAMPS (NPTI), for their support and

guidance in my project.

Regards,

Balaji Raparthi

EXECUTIVE SUMMARY

Constitution of India defines that Central Government as well as state Governments can

set up guidelines relating to power sector. Delhi is one of the successful cases of

Privatisation in India. The privatization process in Delhi started in Feb’1999 when a

strategy paper was issued by the Govt. of NCT of Delhi. Privatisation has improved the

power sector issues in Delhi in almost every area such as AT&C losses has been decreased

significantly to 11% by TPDDL, Quality of the power supply has been increased, trend of

losses has been decreased, Standard of Performance has increased significantly, Regulatory

commission working independent from political interference compared to other states,

surplus power capacity and power cuts has been decreased to almost zero hours.

In 2009-10, Delhi’s per capita electricity consumption was 1651.26 kWh where national

per capita electricity consumption was 778.71units. As the Demand of the power supply is

increasing and number of consumers are increasing, Discoms are facing complexity in

maintenance of the power supply, power procurement and load management. Electricity

tariff is continuously increasing in Delhi with the increased power purchases from other

states. Although Power scenario has improved in Delhi compared to other states but there

is a need to maintain the power tariff at stable level and as minimum as possible to make

the electricity feasible to every consumer in the state.

In this report, we discuss the challenges which are contributing to the increase in tariff of

the domestic consumers other than unavoidable factors like inflation etc. Although

Regulatory commission determine the tariff after considering the true up petitions, still

there are many challenges like Discoms manipulation in the figures which cannot be prove

in true up, maintenance and meter replacement activities in unnecessary areas,

uneconomical power procurement, abrupt increment in the transmission charges, changing

environment concerns, energy security, less installed renewable energy and subsidization.

With the increasing demand and forecasting of the energy consumption there is chance of

enter into the costly power procurement which can increase the tariff every year. Also there

is a possibility of increment in the PPAC (Power Purchase Cost Adjustment) due to

unavoidable factors such as fuel prices. These major challenges can be faced by opting the

Demand side Management and Renewable energy options.

Delhi has a wide scope for DSM measures. Already three major Discoms, i.e., BRPL,

BYPL, TPDDL are implementing DSM steps and saved significant energy like TPDDL

has saved 0.16MUs by changing the temperature settings of ACs in ATMs, shifted 2MW

load from TPDDL peak. In this way there is a lot of opportunity to reduce energy

consumption and shifting of peak demand in Delhi with proper intervention of regulatory

commission in tariff pricing mechanism and energy education programs.

Delhi has no regulations towards DSM and there is no mechanism for DSM programs

performance assessment, measurement and evaluation. Hence DERC need to introduce

these regulations with either MERC model or IPMVP model for long term benefits. Also,

if we can compare our country DSM programs and implementation with international

countries like Brazil and China who are successful in DSM implementation then we can

get some steps towards the DSM implementation like mandating the DSM measures etc.

In this report, we discuss a model about the Time of Use tariff applicability rationale for

Delhi and the analysis towards timings of the TOU with the support of the data from the

Delhisldc reports for the FY2012-13.In this model we have used graphical analysis. From

the analysis inference is that there are different peak hours in winters and summers.

Also, work has been done towards another Model for checking the feasibility of the

Domestic consumers tariff slabs change with the passage of time and changing power

consumption scenarios. In this model Linear programming techniques have been used for

getting optimum cost of the variable charges for each slab. Presently Delhi has 4 slabs in

the domestic category. If commission wants to check for slab alternative options then this

model is useful.

Renewable energy is one of the emerging and feasible opportunity for Delhi power

consumers as grid tariff is increasing due to the fuel shortages and degradation. Greenpeace

has done feasibility study for solar rooftops in Delhi and suggested that Delhi has 2.5GW

potential of solar rooftops, tariff of solar is going to reach grid parity by 2018 for all types

of consumers in Delhi and Government buildings are viable for solar power in 2013 itself.

Besides the challenges of processing and storage of Wastage to energy, Delhi have

significant potential of waste to energy with a levelised tariff as low as Rs2.833 per kWh.

In this way, challenges towards tariff hike continuously in Delhi can be controlled by

working towards the major opportunities of DSM and Renewable energy which has long

term benefit.

ABBREVIATIONS

BRPL – BSES Rajdhani Power Limited

BYPL – BSES Yamuna Power Limited

CERC – Central Electricity Regulatory Commission

CGRF – Consumer Grievance Redressal Forum

DERC – Delhi Electricity Regulatory Commission

Discoms – Distribution Companies

DSM – Demand Side Management

DTL – Delhi Transco Ltd

DVB – Delhi Vidyut Board

IPMVP – International Performance Measurement and Verification Protocol

MERC – Maharashtra Electricity Regulatory Commission

NDMC – New Delhi Municipal Council

Solar PV – Solar Photo Voltaic

TPDDL – Tata Power Delhi Distribution Limited

T & D – Transmission and Distribution

TOD – Time of Day

TOU – Time of Use

TABLE OF CONTENTS

Certificate ........................................................................................................................................ 1

Declaration ...................................................................................................................................... 2

Acknowledgement ........................................................................................................................... 3

Executive summary ......................................................................................................................... 4

Abbreviations .................................................................................................................................. 7

List of Figures ............................................................................................................................... 11

List of Tables ................................................................................................................................. 12

1 Introduction ............................................................................................................................ 13

1.1 Introduction ................................................................................................................... 13

1.2 Problem statement ......................................................................................................... 16

1.3 Objective ....................................................................................................................... 16

1.4 Organization profile - DERC ......................................................................................... 17

1.4.1 Delhi’s Restructuring and Establishment of DERC .................................................. 17

1.4.2 Organization Chart of DERC .................................................................................... 18

1.4.3 Functions of Delhi Electricity Regulatory Commission ............................................ 19

1.5 Literature Review .......................................................................................................... 24

1.6 Research methodology .................................................................................................. 26

2 Delhi Power Sector ................................................................................................................ 27

2.1 Delhi Distribution Sector privatization and Outcome of Privatisation .......................... 27

2.1.1 Problems in the Electricity Sector in Delhi before Privatization .............................. 27

2.1.2 Outcome of privatization and reforms: ..................................................................... 29

2.1.3 Current Delhi Power Sector: ..................................................................................... 33

3 Challenges in Delhi Discoms raised in Public Hearing ......................................................... 34

3.1 SWOT Analysis of Delhi Discoms ................................................................................ 38

4 Delhi Domestic Consumers Slab change viability check model ............................................ 42

4.1 Significance and Scope of the model ............................................................................ 42

4.2 Mathematical concept used ........................................................................................... 43

4.2.1 Concept of Linear Programming ............................................................................... 43

4.3 Applying Linear Programming to Domestic consumer variable electricity charge

change ........................................................................................................................ 44

4.3.1 Problem ..................................................................................................................... 44

4.3.2 Analysis ..................................................................................................................... 44

4.3.3 Recommendation ....................................................................................................... 46

5 Demand Side Management .................................................................................................... 47

5.1 Introduction ................................................................................................................... 47

5.2 Need for DSM in Delhi ................................................................................................. 49

5.3 Major DSM Methods ..................................................................................................... 49

5.4 DSM strategies .............................................................................................................. 49

5.4.1 Smart Grid ................................................................................................................. 51

5.4.2 Time of use ................................................................................................................. 51

5.4.3 Green Building and Green Corridor ......................................................................... 51

5.4.4 DSM in Agriculture ................................................................................................... 52

5.4.5 Potential for EE in Municipal Sector ........................................................................ 52

5.4.6 Demand Response ..................................................................................................... 53

5.5 Demand Side Management design ................................................................................ 58

5.5.1 Successful DSM design options ................................................................................. 59

5.6 Barriers to implementation of energy efficiency in India .............................................. 60

5.7 Success cases of DSM in National & International Scenario ........................................ 61

5.8 DSM Threats in Delhi ................................................................................................... 62

5.9 Suggestions and Recommendations .............................................................................. 63

5.10 Conclusion ..................................................................................................................... 64

6 Study of Different DSM Regulations and Recommendations to DERC ................................ 65

6.1 Recommendations ......................................................................................................... 65

6.2 MERC Cost effectiveness Assessment method ............................................................. 65

6.3 IPMVP Model ............................................................................................................... 66

7 Design of Time-of-day timings for residential consumers in Delhi ....................................... 70

7.1 Objective ....................................................................................................................... 70

7.2 Rationale for time-of-day tariffs for residential consumers in Delhi ............................ 70

7.3 Analysis of Load curves in Delhi .................................................................................. 72

7.4 Result ............................................................................................................................. 75

7.5 Recommendations ......................................................................................................... 75

7.6 Expected actions ............................................................................................................ 76

7.6.1 Consumers ................................................................................................................. 76

7.6.2 Utility ......................................................................................................................... 76

7.6.3 Regulatory Commission ............................................................................................. 76

8 Renewable energy for Delhi Consumers ................................................................................ 77

8.1 Introduction ................................................................................................................... 77

8.1.1 Renewable Energy in India........................................................................................ 77

8.1.2 Renewable Energy in Delhi ....................................................................................... 78

8.2 The viability of rooftop solar PV in Delhi ..................................................................... 80

8.3 Benefits of Solar rooftops to stakeholders ..................................................................... 84

8.4 Business Models for Rooftop solar ............................................................................... 85

8.5 Conclusion and Recommendations ............................................................................... 86

9 Conclusion and Recommendations ........................................................................................ 87

Appendix ....................................................................................................................................... 88

Load curves of 2012-13 ............................................................................................................ 88

Bibliography .................................................................................................................................. 90

LIST OF FIGURES

Figure 1: Post Reform Framework ................................................................................................ 14

Figure 2: DERC organization chart ............................................................................................... 18

Figure 3 Trend of Demand – Supply imbalance............................................................................ 28

Figure 4: Trend of T & D Losses as %age of Availability ............................................................ 29

Figure 5: Trend of AT & C Losses ................................................................................................ 30

Figure 6: Trend of ARR & ACS of Delhi Discoms ...................................................................... 31

Figure 7: Trend of Quality of Supply in Delhi .............................................................................. 32

Figure 8: DTL/SLDC Yearly Progress report Mar’2013 .............................................................. 37

Figure 9: Trend of Delhi Commercial losses................................................................................. 39

Figure 10: Trend of operating cost ................................................................................................ 39

Figure 11: DSM Major Impact areas ............................................................................................. 48

Figure 12: Demand Response Processes ....................................................................................... 57

Figure 13: DSM Design Conditions .............................................................................................. 58

Figure 14: Successful DSM Design options of US ...................................................................... 59

Figure 15: Churning Wheel ........................................................................................................... 64

Figure 16: Concept of Energy saving measurement ...................................................................... 67

Figure 17: Option Selection Process, IPMVP ............................................................................... 69

Figure 18: Trend of Energy sales in Delhi .................................................................................... 70

Figure 19: Trend of Supply of Power and Electricity Consumption in Delhi ............................... 71

Figure 20: Consumer categories for rooftop solar PV: .................................................................. 81

Figure 21: Historical grid tariff price trend: .................................................................................. 82

Figure 22: Viability of Solar rooftop in Delhi ............................................................................... 84

LIST OF TABLES

Table 1: Trend of T & D Losses as %age of Availability ............................................................. 29

Table 2: Profits (in Rs crores) ....................................................................................................... 31

Table 3: Peak & Energy Deficit (%) ............................................................................................. 32

Table 4: Delhi Installed Capacity ............................................................................................. 33

Table 5: Domestic Consumers Tariff ............................................................................................ 42

Table 6: Domestic Consumers Sales and variable Energy charge forecast for FY'14 .................. 45

Table 7: Linear Programming Model for Proposed Slab change .................................................. 45

Table 8: Operational Verification Approach, IPMVP ................................................................... 68

Table 9: IPMVP Measuring Options ............................................................................................. 68

Table 10: Load statistics of Delhi for FY'2012-13 ........................................................................ 73

Table 11: Analyzed TOD timings for FY'2012-13 ........................................................................ 74

Table 12: TOD suggestions for Delhi ........................................................................................... 75

Table 13: Source wise Estimated Potential of Renewable Power in Delhi .................................. 78

Table 14: Installation of Off-grid / Decentralized Renewable Energy Systems/Devices ............. 80

Table 15: RPO Obligations in Delhi ............................................................................................. 86

1 INTRODUCTION

1.1 INTRODUCTION

“Indian Economy has witnessed rapid growth in the past decade and to sustain a similar

growth trajectory of 9%, power sector needs to grow at atleast 8.1 % per annum”

------------ Planning Commission

Indian Power Sector has seen development after the Independence but yet to develop a lot

in order to achieve 8.1% per annum growth rate. The Indian power sector has made

significant progress over the years. The sector has also undergone substantial structural

changes. Regulatory policies have played a predominant role in changing the landscape of

the Indian power sector. Though the sector has come a long way from its humble

beginnings, it is still lagging on several fronts, such as power shortages, T&D losses,

among others, and has a long way to go.

The industry has been regulated for almost a century and the Electricity Act 1910 was the

first act that was introduced to govern the Indian power sector. The Electricity (Supply)

Act 1948 was introduced after independence, but it did not achieve the desired results, as

the power sector’s performance started to deteriorate and a need was felt to restructure the

sector. Several regulatory changes were made since 1991, which transformed the industry’s

performance.

The deteriorating health of the SEBs made it impossible for them to infuse fresh

investments into the sector. Moreover, the country was facing a macroeconomic financial

crisis that made it difficult for the governments, both the Central and state governments, to

fund power projects through budgetary support. Due to these events, the government

decided to restructure the power sector in a phased manner in 1991; consequently, it opened

up the power sector (liberalise) and invited foreign private companies to get funds and

technology into the Indian power sector.

Figure 1: Post Reform Framework

After the Electricity Act’2003, Indian Power sector is broadly divided into:

Generation, Transmission and Distribution

Before the unbundling of the power sector there is a belief that India has no sufficient

installed capacity and hence India has taken initiatives towards the installed capacity in

terms of capacity addition targets in every 5 year plans. But after unbundling it has been

identified that major losses to the electricity business is on distribution side.

The distribution segment was not given more consideration in the earlier regulations,

which lay more emphasis on the power generation segment instead. It was considered that

by increasing power generation, the demand for power could be met to some extent, but

the industry suffered huge losses (T&D and financial) on the distribution side. SEBs, the

main bodies involved in power distribution segment, were in bad financial shape, which

made it difficult for them to pay the generator for the electricity supply. The risk of defaults

from the SEBs worried generators and hindered new players from entering the industry.

The Electricity Act 2003 came up with measures that could improve the performance of

the distribution sector on almost all fronts.

The measures meted out included more than one distribution licenses permitted in the

same area, which increased competition among the distribution licensees, and ensured

better services for the end consumer. The best case of multiple licenses was noticed in

Delhi after privatisation in 2002, which resulted in improved operational performance,

reduction in AT&C losses, and reduction in incidences of load shedding. NDPL, BSES,

and BRPL, the three distribution companies, came into existence and took charge of power

distribution in different areas of Delhi.

The concept of distribution franchisees was introduced under the Electricity Act 2003,

under which a distribution licensee could distribute electricity through another player

within the distribution area. The Bhiwandi circle (near Mumbai) reported the first instance

of distribution franchise that was granted to Torrent Power by Mahavitaran (distribution

license in Maharashtra).

The anti-theft provisions under the Act lowered the commercial losses of utilities as

electricity losses arising from theft decreased continuously and investors started to show

renewed interest.

In the distribution segment, open access was introduced, which opened up a new era of

choice for consumers to choose their supplier. Many SERCs like Jharkhand, Madhya

Pradesh, and Punjab have issued guidelines for open access and allowed it up to 1 MW

capacity and above.

Even though SEBs are handling the regulatory operations, the Act has mandated the

creation of regulatory commissions in each state; these commissions have played a

significant role in passing different regulations and monitoring performances of the state

utilities. Few of the state regulatory bodies have set targets for their utilities, and

achievement of these targets before the scheduled time which fetches them incentives and

any delay gets them penalised. Thus, the structure is more regulated.

Among all the functions of regulatory commissions, tariff determination is the main

function in which there are key challenges involved before regulatory commission to get

trade-off between the benefit of both consumers and financially degrading Distribution

companies (Discoms).

1.2 PROBLEM STATEMENT

The main problem is to identify the challenges related to Delhi Distribution companies for

the purpose of taking the decision regarding the annual tariff determination for Domestic

consumers of Delhi. Also, identifying the future opportunities in order to avoid the

continuous increment in the tariff which will cause benefit to both consumers and

electricity companies.

1.3 OBJECTIVE

The Purpose of the project is to identify the challenges related to the Delhi distribution

companies and their performance with respect to domestic consumers and analyzing the

credibility of the challenges identified as per the Delhi scenario. Providing viable solutions

through Demand side management and Renewable energy by considering future prospects

and energy security measures.

1.4 ORGANIZATION PROFILE - DERC

1.4.1 Delhi’s Restructuring and Establishment of DERC

The Delhi Vidyut Board (DVB) was a State Electricity Board (SEB) set up in 1997 under

the Electricity (Supply) Act, 1948, succeeding the Delhi Electricity Supply Undertaking

(DESU), which had existed since 1957 as a wing of the Municipal Corporation of Delhi; it

was an integrated utility with generation, transmission and distribution functions serving

all of Delhi except the NDMC and MES (Cantonment) areas, to which it supplied power

in bulk. The creation of DVB, replacing DESU, in 1997 proved to be merely a change in

the legal status of the organization and was not followed by any real change in its structure,

functioning and work culture: its reputation continued to deteriorate and its poor

commercial performance—the best known thing about DVB perhaps being its high

Transmission and Distribution (T&D) losses—made it a drain on the public exchequer and

incapable of raising the resources necessary to improve its services. There were

unprecedented, widespread expressions of public discontent during the difficult summer of

1998. Against the above background, one of the first major steps taken by the new

Government of the NCT of Delhi was to bring out a Strategy Paper on Power Sector

Reforms in February 1999. This paper envisaged:

Setting up of a Regulatory Commission;

Unbundling of the DVB into separate Generation, transmission and distribution

companies;

Disinvestment of distribution;

Interim measures to improve the performance of DVB;

Protection of staff interests.

Starting with a strategy paper, the then new Delhi Government moved quickly to

restructure the electricity industry in the territory and privatize the distribution business. In

a little over three years, in July 2002, the distribution business was handed over to private

parties.

1.4.2 Organization Chart of DERC

On this page is shown the current organization hierarchy or profile chart of DERC.

Figure 2: DERC organization chart

1.4.3 Functions of Delhi Electricity Regulatory Commission

The Govt. of India had enacted the Electricity Regulatory Commissions Act, 1998 (No.14

of 1998) on 2nd July, 1998 with the objective of providing for the establishment of a CERC

and SERCs, rationalization of electricity tariff, transparent policies regarding subsidies,

promotion of efficient and environmentally benign policies and for matters connected

therewith or incidental thereto.

The DERC came into existence under section 17 of Electricity Regulatory Commission

Act, 1998 (ERC Act, 1998) on 3rd March 1999 through a Notification of the Government

of NCT of Delhi on the 10th of December 1999 to discharge the following functions.

1. To determine the tariff for electricity, wholesale, bulk, grid or retail, as the case

may be, in the manner provided in Section 29 of the ERC Act, 1998;

2. To determine the tariff payable for the use of the transmission facilities in the

manner provided in Section 29 of the ERC Act, 1998;

3. To regulate power purchase and procurement process of the transmission utilities

and distribution utilities including the price at which the power shall be procured

from the generating companies, generating stations or from other sources for

transmission, sale, distribution and supply in the National Capital Territory of

Delhi;

4. To promote competition, efficiency and economy in the activities of the electricity

industry to achieve the objects and purposes of the Central Electricity Regulatory

Commission Act, 1998;

5. Any other functions the Government of NCT of Delhi may notify further from time

to time.

The Government of NCT of Delhi promulgated the Delhi Electricity Reform Ordinance,

2000 on 28th October 2000. The Commission constituted under the ERC Act, 1998 was

deemed to be the first Commission under the aforesaid Ordinance. The DER Bill, 2000

after receiving the assent of the President, was later notified as the Delhi Electricity Reform

Act, 2000 (DERA, 2000).

This Act provided for the constitution of an Electricity Regulatory Commission for the

NCT of Delhi to be known as ―Delhi Electricity Regulatory Commission to exercise the

following functions.

To determine the tariff for electricity, wholesale bulk, or retail, as the case maybe;

To determine the tariff payable for the use of the transmission facilities;

To regulate power purchase and procurement process of the licensees and

transmission utilities including the price at which the power shall be procured

from the generating companies, generating stations or from other sources for

transmission, sale, distribution and supply in the National Capital Territory of

Delhi;

To promote competition, efficiency and economy in the activities of the

electricity industry to achieve the objects and purposes of this Act;

To aid and advise the Government in matters concerning electricity generation,

transmission, distribution and supply in the National Capital Territory of Delhi;

To regulate the operation of the power system within the National Capital

Territory of Delhi;

To set standards for the electricity industry in the National Capital Territory of

Delhi including standards related to quality, continuity and reliability of service;

To promote competitiveness and make avenues for participation of private sector

in the electricity industry in the National Capital Territory of Delhi and also to

ensure a fair deal to the customers;

To aid and advise the Government in the formulation of its power policy;

To collect and publish data and forecasts on the demand for, and use of, electricity

in the National Capital Territory of Delhi and to require the licensees to collect

and publish such data;

To regulate the assets, properties and interest in properties concerned or related

to the electricity industry in the National Capital Territory of Delhi including the

conditions governing entry into and exit from the electricity industry in such

manner as to safeguard the public interest;

To issue licenses for transmission, bulk supply, distribution or supply of

electricity and determine the conditions to be included in the licenses;

To regulate the working of the licensees and other persons authorized or

permitted to engage in the electricity industry in the National Capital Territory of

Delhi and to promote their working in an efficient, economical and equitable

manner;

To require licensees to formulate prospective plans and schemes in coordination

with others for the promotion of generation, transmission, distribution, supply

and utilization of electricity, quality of service and to devise proper power

purchase and procurement process;

To adjudicate upon the disputes and differences between the licensees and/or

transmission utilities and to refer the matter for arbitration;

To aid and advise the Government on any other matter referred to the

Commission by the Government.

Subsequently Government of India notified the Electricity Act, 2003 which repealed the

ERC Act, 1998. As per provisions contained in Section 86 of the Electricity Act, 2003,

DERC has the responsibility to discharge the following functions: -

a. To determine the tariff for generation, supply, transmission and wheeling of

electricity, wholesale, bulk or retail, as the case may be, within the State: Provided

that where open access has been permitted to a category of consumers under section

42, it shall determine only the wheeling charges and surcharge thereon, if any, for

the said category of consumers;

b. To regulate electricity purchase and procurement process of distribution licensees

including the price at which electricity shall be procured from the generating companies

or licensees or from other sources through agreements for purchase of power for

distribution and supply within the State;

c. To facilitate intra-State transmission and wheeling of electricity;

d. To issue licenses to persons seeking to act as transmission licensees, distribution

licensees and electricity traders with respect to their operations within the State;

e. To promote co-generation and generation of electricity from renewable sources of

energy by providing suitable measures for connectivity with the grid and sale of

electricity to any person, and also specify, for purchase of electricity from such sources,

a percentage of the total consumption of electricity in the area of a distribution licensee;

f. To adjudicate upon the disputes between the licensees, and generating companies

and to refer any dispute for arbitration;

g. To levy fee for the purposes of this Act;

h. To specify State Grid Code consistent with the Grid Code specified under clause (h)

of sub-section (1) of section 79;

To specify or enforce standards with respect to quality, continuity and reliability of

service by licensees;

j. To fix the trading margin in the intra-State trading of electricity, if considered,

necessary; and

k. To discharge such other functions as may be assigned to it under this Act.

l. To advise the State Government on all or any of the following matters, namely:-.

Promotion of competition, efficiency and economy in activities of the electricity

industry;

Promotion of investment in electricity industry;

Reorganization and restructuring of electricity industry in the State;

Matters concerning generation, transmission, distribution and trading of

electricity or any other matter referred to the State Commission by that

Government.

The Act further provides that the Commission would be guided by the National Electricity

Policy, National Electricity Plan and Tariff Policy published under section 3 of the EA,

2003. After enactment of EA, 2003, the provisions of DERA, 2000 so far as not

inconsistent with the provisions of EA, 2003 would be applicable. DERC is a three member

body entrusted with a responsibility of regulating the electricity sector in the state in a

rational, transparent and participative manner. Its responsibilities include tariff setting,

overseeing service quality, approving Power Purchase Agreements between a DISCOM

and a generating company etc. All deliberations before DERC are public. Therefore, any

consumer can participate in the decision making process in the electricity sector ranging

from setting the service quality standards to tariff revision. For example, if a DISCOM

wants a hike in tariff, it has to approach the SERC with a detailed proposal. DERC invites

public comments on the proposal, holds a public hearing where any consumer is allowed

to present his views and then decides the revised tariff. As per the Electricity Act 2003, for

better handling of consumer grievance, every DISCOM is expected to have one or more

CGRFs and every state one or more offices of the Ombudsman. CGRF and Ombudsman

in Delhi would function according to regulations notified by the DERC.

1.5 LITERATURE REVIEW

Bridger M. Mitchell, Willard G. Manning, JR. (1977), Jan Paul Action, et al., in their report

Electricity Pricing and Load Management: Foreign Experience and California

Opportunities explained different Demand side management methods and techniques

used by different European countries and the rationale of the methods. They depicted that

success of the methods were depends upon the consumer base and the performance of the

utilities.This report also suggested different cases of situations arise in DSM

implementation and strategies for each situation.

Brandon Davito, Humayun Tai, and Robert Uhlaner (2010), et al., in their paper The smart

grid and the promise of demand-side management stated that smart grid is the best

option for efficiently achieving DSM implementation. In this paper they have explained

about the successful designs of DSM, advantages of Smart grid, capabilities required for

Smart grid implementation.

MERC Regulations DSM Measures’ and Programme’s Cost Effectiveness

Assessment, 2010 (2010) and The International Performance Measurement and

Verification Protocol (IPMVP) (2012), Concepts and Options for Determining Energy

and Water savings, Volume 1 which has been prepared by Efficiency Valuation

Organization which explained about different options and methods for approving the DSM

programs as per their cost effectiveness and different measuring, verification options have

also been discussed.

GREENPEACE India produced a report on June 2013 on the topic Rooftop Revolution:

Unleashing Delhi's Solar Potential in which they have done research on Delhi rooftop

potential, viability of Solar rooftop in Delhi and grid parity capability of solar in Delhi for

different consumers.

The Electricity Act, 2003

The Preamble to the Electricity Act 2003 records the following,

“An Act to consolidate the laws relating to generation, transmission, distribution, trading

and use of electricity and generally for taking measures conducive to development of

electricity industry, promoting competition therein, protecting interest of consumers and

supply of electricity to all areas, rationalization of electricity tariff, ensuring transparent

policies regarding subsidies, promotion of efficient and environmentally benign policies,

constitution of Central Electricity Authority, Regulatory Commissions and establishment

of Appellate Tribunal and for matters connected therewith or incidental thereto.”

Section 86 (1) (b): The SERCs shall discharge the function to regulate electricity purchase

and procurement process of distribution licensees including the price at which electricity

shall be procured from the generating companies or licensees or from other sources through

agreements for purchase of power for distribution and supply within the State.

Section 51 (1) A distribution licensee may, with prior intimation to the Appropriate

Commission, engage in any other business for optimum utilization of its assets:

Provided that a proportion of the revenues derived from such business shall, as may be

specified by the concerned State Commission, be utilised for reducing its charges for

wheeling:

Provided further that the distribution licensee shall maintain separate accounts for each

such business undertaking to ensure that distribution business neither subsidies in any way

such business undertaking nor encumbers its distribution assets in any way to support such

business.

1.6 RESEARCH METHODOLOGY

Research Design:

The study is based on the electricity regulator‘s documents, as well as information from

distribution companies and various other reports available in the public domain.

Survey population:

Survey Population is Delhi domestic consumers and in some analysis complete Delhi

consumers.

Sample:

Delhi domestic consumers related data of three Discoms – BRPL, BYPL, TPDDL

Collection of Data:

Secondary data has been collected such as from ARR petitions of three distribution

companies in Delhi, SLDC load progress reports and other top consultants reports.

Analysis:

Different analysis techniques used are:

Graphical analysis, Linear Programming, secondary data analysis and SWOT analysis

2 DELHI POWER SECTOR

2.1 DELHI DISTRIBUTION SECTOR PRIVATIZATION AND OUTCOME OF PRIVATISATION

2.1.1 Problems in the Electricity Sector in Delhi before Privatization

In the recent years, performance of the power sector in Delhi deteriorated dramatically due

to various reasons:

• T&D losses (Transmission and Distribution losses) increased from 7% in 1953 to over

50% in 2000. Around 18% losses are transmission losses and 32% is lost due to power

theft.

• Maintenance was neglected, leading to inefficiently working equipment.

• Commercial losses of DVB increased sharply from Rs 207crore in 1993 to Rs 1,103crore

in 2000.

The problems of the electricity sector in Delhi before privatisation can be divided into three

sections:

• Demand-Supply Imbalance

• Transmission and Distribution Losses

• Financial Position of the DVB

Demand-Supply Imbalance

While the peak demand for energy grew steadily over recent years, power supply from

DVB owned power plants remained stagnant. In spite of an ‘own’ installed capacity of

around 700 MW, DVB’s power generation companies could not provide more than 300-

350 MW.One reason for this is the age of the power stations. For example the Indraprastha

Power Station, that provides 125 MW, is 30 years old and the gas turbine stations that

provide about 250 MW are more than 10 years old. This results in very high production

costs, due to the inefficient operating rate and the high consumption of fuel brought about

by the age of the plants. To solve this problem, between 1994 and 1995, three new projects

with private sector participation were identified. But for various reasons, little progress was

made in implementing these projects.

Figure 3 Trend of Demand – Supply imbalance

Transmission and Distribution (T&D) Losses

Another major problem in Delhi’s power system is the high level of T&D losses. Between

1995 and 2001, T&D losses ranged from 40% to 50% of total power availability.

In its ‘Strategy Paper on Power Sector in Delhi’ DVB identified various reasons for the

upsurge in T&D losses:

• Many consumers who are on metered supply still indulge in power theft. This

phenomenon is observed in all categories of consumers, as also in industries and

commercial establishments.

• Under the present legal framework it is not possible to provide consumers who live in

unauthorised colonies with a legal connection. This leads to illegal tapping of power from

the mains.

• Some industries and commercial establishments in non-conforming areas and urbanised

villages resort to misuse or theft due to prevalent conditions of supply.

In addition, many users load more than the agreed limit, or tamper with the meters. On the

issue of power thefts and their prevention, the ‘soft approach’ of successive governments,

populism and compulsions of electoral politics are generally blamed.

T & D losses as Percentage of Availability

1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

48.00% 49.60% 42.30% 48.70% 50.70% 47.00%

Source: Annual Report (2002-02) on the Working of SEBs

Table 1: Trend of T & D Losses as %age of Availability

Figure 4: Trend of T & D Losses as %age of Availability

Financial Position of the DVB

The Board’s deficit rose from Rs 342.22 crore in 1994 to Rs 694.67 crore in 1998. The

reasons for this, given by the DVB are:

• The billing system does not work efficiently. So for example only 57.3% of energy

released in 1998 was billed and only around 88% of the amount billed was received as

revenue.

• Because of continuous losses, on the eve of privatisation, outstanding accounts had

reached a level of Rs 6,500 crore and DVB itself was owed over Rs 1,000 crore from

various organisations.

2.1.2 Outcome of privatization and reforms:

The overall impact of reforms and initiatives taken has started producing favourable

results. Various parameters indicating the overall health of power distribution sector in the

state are discussed below:

48.00%

49.60%

42.30%

48.70%

50.70%

47.00%

38.00%

40.00%

42.00%

44.00%

46.00%

48.00%

50.00%

52.00%

1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

T & D losses as Percentage of

Availability

Aggregate technical and Commercial Losses (AT&C): AT&C loss reduction was the

parameter used for privatisation of distribution companies in Delhi. Opening levels of

AT&C levels were given for the three distribution companies and annual targets for

reduction were set. Post privatisation a number of initiatives were taken by distribution

companies to reduce AT&C losses. The AT&C losses for Delhi have reduced from 56% in

2002-03 to 38% in 2007-08.

Figure 5: Trend of AT & C Losses

Financial viability:

a. Profitability: Financial position of Discoms has improved post-privatisation. All

the Discoms started reporting profits from 2004-05. While NDPL has shown a

consistent improvement in profits generated, BSES slipped into losses in 2007-

08.

Both NDPL and BSES registered a significant increase in the power purchase cost in 2007-

08 over 2006-07. The power purchase cost per unit of energy input was higher for BSES

as compared to NDPL. BSES Discoms also reported increase in their interest costs for

FY07 and FY08.

Table 2: Profits (in Rs crores)

Profits (in Rs Crores)

2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 2007 - 08

BSES Rajdhani -57 -32 60 89 27 -449

BSES Yamuna -101 -55 7 46 48 -55

NDPL 22 29 57 113 186 282

Source: PFC Report

b. Average cost of supply (ACS) and Average revenue realized (ARR): NDPL has

seen an increasing difference between ARR and ACS from 10 paise/KWh in 2002-

03 to 50 paise/KWh in 2007-082.

BSES Discoms registered better revenue realized than cost of supply for FY05 and FY06.

However in FY07 and FY08 their cost of supply was higher than revenue realized. This

deterioration reflected in their financials as they slipped into losses for FY08.

Figure 6: Trend of ARR & ACS of Delhi Discoms

c. Quality of Supply (QoS): Quality of supply in Delhi has improved post reforms.

NDPL registered best figures for quality of supply parameters in FY07

Outage Duration per feeder

(hh:mm) 2004 - 05 2005 - 06 2006 - 07

NDPL 49:33:00 13:34 03:54

BRPL 105:14:00 77:40:00 37:05:00

BYPL 98:07:00 82:31:00 33:29:00

No of Outages per feeder

2004 – 05 2005 - 06 2006 - 07

NDPL 26 10 4

BRPL 68 77 38

BYPL 60 76 34

Average Duration of an Outage

(hh:mm) 2004 – 05 2005 - 06 2006 - 07

NDPL 01:55 01:22 00:54

BRPL 01:33 01:01 00:58

BYPL 01:38 01:05 00:59

Figure 7: Trend of Quality of Supply in Delhi

Source: http://www.cea.nic.in

Deficit Situation: Deficit situation in Delhi has improved in terms of both peak and energy

deficit. Peak deficit has reduced from 9.2% in 2002-03 to 0.0% in 2008-09. Energy deficit

has reduced from 1.9% in 2002-03 to 0.6% in 2008-09.

Table 3: Peak & Energy Deficit (%)

Peak and Energy deficit (%)

Peak Deficit Energy Deficit

2002-03 9.2 1.9

2003-04 3 1.4

2004-05 1.9 1

2005-06 3.3 1.5

2006-07 6.6 1.7

2007-08 1.1 0.6

2008-09 0 0.6

Source: http://www.cea.nic.in

http://www.cea.nic.in/

In this way, Distribution reforms in Delhi and privatization of Discoms has led to positive

results. This is being reflected in reduced AT&C losses, low deficit situation, improving

quality of supply parameters and no subsidy to Discoms.

2.1.3 Current Delhi Power Sector:

Intra state Generation Units: (Conventional Sources):

Station name Installed

capacity(MW) Coal/gas Beneficiary area

Rajghat Power House 135 NCL, BINA BRPL,BYPL,NDPL,NDMC,MES

Gas Turbine 270 GAIL HBJ Pipeline BRPL,BYPL,NDPL,NDMC,MES

Pragati Power Corporation Ltd. 330

GAIL HBJ Pipeline BRPL,BYPL,NDPL,NDMC,MES,DMRC

Rithala GT 108 Gas Delhi

Bawana CCGT 1500 GAIL Pipeline BRPL,BYPL,NDPL,NDMC,MES,

Haryana,Punjab

BTPS 705 Jharia Coal

Fields BRPL,BYPL,NDPL,NDMC,MES

Table 4: Delhi Installed Capacity Source: Delhi Sldc website

Delhi Transmission:

1. DTL Licence granted for Transmission and Bulk Supply

2. License granted by DERC under section 20 of Delhi Electricity Reforms Act, 2000

Delhi Discoms:

1. BRPL

2. BYPL

3. TPDDL

4. NDMC

5. MES

Regulatory Commission: DERC

Load Dispatch Center: Delhisldc

3 CHALLENGES IN DELHI DISCOMS RAISED IN PUBLIC

HEARING

Although there is a significant improvement after the privatisation of the Delhi discoms,

there are still some issues related to the escalation of tariff in Delhi. Major challenges of

significance are as follows: (Source: As per the DERC data)

1. Slabs system which is not as per the present feasible consumption levels of the

consumers.

2. Tariff is not proportional to fuel fluctuations.

3. Unnecessary spending on distribution infrastructure without estimating the

required capacity requirement and proper study.(Fixed charges burden)

4. Metering charges and burden on poor people. No Depreciation on consumer meters

and no depreciation salvage on consumer salvage.

5. Inefficient/Poor customer service mainly by BSES.

a. Ex: In public hearing, one user asked for RTI information and he atleast got

reply from TPDDL that he doesn’t comes under TPDDL area but there is no

reply from BSES.

b. Enforcement collection – Harassment, Ex: When meter goes wrong and if it

shows 70units then Discoms charge 7000units with double rate.

6. Stay taken by Discoms on RTI – This has been changed recently.

7. Improvement in AT & C losses: when compared to TPDDL there is a need for

improvement in the BSES’s AT & C losses reduction.

8. DISCOM MANIPULATIONS:

a. CAG audit is not there in DISCOMS.(Consumers are feeling that there

is manipulations in showing the losses of AT & C losses on their

favour.)

b. ZERO Billing for 10% consumers but many manipulations and

ignorance by Discoms in this regard.

9. A. Discoms heavy dues especially BSES.(Recently Sheila dixit also write a letter

to Mr.Ambani)

B. ARR gap is increasing continuously over the years which is increasing

DISCOM losses and accumulated regulatory assets.

10. Lowest power by NDMC as it is the bureaucrats’ lines where the losses are low

and cheapest power option.

11. Consumer Education and Training: Consumer study is poor. Ex: Some people

are not aware of the voltage levels and their use -- they are thinking that there is a

discrimination here.

12. Extra charges on consumers:

a. Even though consumers are using within 10KWh of their allocated

capacity, if Discom is buying more power for meeting overall demand then

Discoms are charging extra fixed charge from consumers.

b. If consumer uses more KWh then there is double the charge on the

consumers but if Discoms supply less power then there is no penalty or

charge on them. There should not be any discrimination.

13. Financial discipline of Tariff: Surplus power is buying at high cost and selling at

low cost.

14. CERC :

a. CERC is increased and increasing central generating stations tariff with no

public participation or opinion where some of the Central generating

companies are linked to Delhi.

b. CERC refuses to do true up exercise for controllable expenses.

15. Uneconomical Power Procurement:

Ex: Jhajjar Power costs Rs.6.9/unit where as if we import power from pit head it

costs Rs. 4.4/unit and RITHALA is charging Rs. 10.9/unit as there is a shortage

in the gas from the KG Basin.

16. CSR(Corporate Social Responsibility): TPDDL does some CSR activities

where as there is no active programs or obligations of CSR on the utilities of the

power sector.

17. Load shedding: Even though DERC says that there is no power shortage in Delhi

there is still Load shedding of more than 10hrs in some areas of Delhi as per the

recent news.

18. Open Access is still a dream for the Successful privatized background city like

Delhi.---- MONOPOLY of DISCOMS

19. Reliability Charges:

Explanation: - Discoms are planned to charge reliability charges by just decreasing

the power cuts from 10hrs to 15mins or 2hrs. But, even there is a power cut of

15mins necessitates the inverters and other alternatives for consumers then how

should this reliability is useful to Consumers?

20. DERC hearing Process: In Industrial hearing DERC doesn’t call any normal

consumers where there is always a link between normal consumers and industrial

power scenario.

21. Incremental hikes in Tariffs: This unprecedented loss reduction is the single most

important factor responsible for easing the significant upward pressures on tariff

levels in recent years, due to sharply rising input costs. (*One of the Solution :

DSM and Energy Efficiency)

22. Fuel Issues:

a. Shortage of fuel

b. Fuel price hikes

c. Scams and political interference

d. Degradation of conventional energy resources(*Solution: Renewable

Energy)

23. Changing Pollution obligations and environment concerns:

One of the example for this is the pollution PPM contents in the air from thermal

power stations which made the Pragati Thermal power station to get closed in the

Year of 2013. (*Solution: Renewable Energy)

24. Poor or negligible installed renewable energy in Delhi. :

a. Less RE alternative resources – Only Solar and Waste options in Delhi.

b. High project costs compared to conventional power generation.

1700lakhs/MW for solar. Whereas for Thermal – 5 crores

Hydro – 8.5crores and nuclear also

less than solar.

c. High power tariffs

d. Land procurement/Space issues

e. RPO is not penalised and very less compared to all other states in India.

25. Need improvement in the Quality of supply:

Still there is a frequency fluctuations of above 50.25HZ of 13.07% of supplied

power as per the DelhiSLDC’s report.

Figure 8: DTL/SLDC Yearly Progress report Mar’2013

26. Congestion in the N-E-W interconnected transmission network :

a. As some states are over drawing the power, which is one obstruct for open

access.

b. Problem for Exchange and trading.

27. Cross subsidies: which is a challenge for competition which is one of the

objective of Electricity Act’2003.

28. Improper monitoring and Political forces on SLDC of other states leads to NEW

grid availability

29. Improper management and inspection of Maintenance and Safety mechanism

elements

30. PGCIL and DTL increased their charges by 50% in a year which is a huge

increase which happened at once.

31. Delhi is becoming as the HUB of Commercial activities hence there is an

unpredictable/Unforecastable demand growth. (*Solution : DSM and Energy

Efficiency)

32. Maintenance of Power in slum areas. (*Solution : DSM and Energy Education)

33. Energy Security (*Solution: Renewable Energy)

3.1 SWOT ANALYSIS OF DELHI DISCOMS

Strengths:

1. Good Customer and Employee Service: Relentless focus on customer has meant

that service levels not only exceed those provided by the best utilities in the world

but are also comparable to benchmarks established in highly competitive sectors

like telecom & banking.

2. Dramatic improvements in quality and reliability of supply. Not only this, lights

do not dim anymore and TV screens do not contract during peak hours. It is

interesting to note that sale of generator sets, inverters & stabilizers have long since

dropped to near zero.

3. One of the most critical challenges faced by power sector in India today, is the

exceptionally high technical & commercial (AT&C) losses, Single minded

determination and focus to contain theft, in Delhi has led to unprecedented

reduction in commercial losses (theft of electricity) from 45 % levels at the time of

privatization to 4 to 5 % range currently.

Figure 9: Trend of Delhi Commercial losses

Source: http://www.epcworld.in/epcnews/delhi-power-distribution-remarkable-turnaround-story-

2.aspx, 20.06.13

4. Despite, average inflation of 7-8 % per annum, operating cost has seen significant

declining trend as seen in the chart above.

a. Relentless focus on productivity enhancement through continuous

improvements in systems & processes and adoption of best industry

practices has yielded impressive results.

Figure 10: Trend of operating cost

Source: http://www.epcworld.in/epcnews/delhi-power-distribution-remarkable-turnaround-story-

2.aspx, 20.06.13

http://www.epcworld.in/epcnews/delhi-power-distribution-remarkable-turnaround-story-2.aspx




5. Govt. Benefits:

a. Loss reduction has meant a whopping `30,000 crore cumulative savings till

date to Delhi Government and `5,000 crore every year here after. This has

clearly translated into more money being available to build physical and

social infrastructure (Schools, colleges, Hospitals, Roads, Metros etc..,) in

Delhi.

6. Privatisation

7. State Government support

8. Independent and efficient regulatory commission with less interference from

government because of stable government. Following EA act and steps towards

promoting RE in Delhi.

9. Above 95% electronic metering.

10. Delhi has no power shortage.

Opportunities:

1. Different metering options

2. Uniform load curve strategies

3. Power procurement optimal strategies

4. Technology improvements in RE in order to get less tariff

5. Extra power of the Delhi

6. No trading licensees under DERC

7. Increase of renewable energy in the total power mix

8. Scope for Bio - mass and SHP other than Solar and waste.

9. Regulatory improvements and transparency.

10. Customer service

11. Open bidding stage of Renewable tariff

12. CSR

13. Merges and Acquisitions for better Result - oriented approach.

14. IT implementations in Delhi Power Sector which is like SCADA and step

towards Smart grid.

Threats:

1. Changes in the political parties may affect the regulatory changes.

2. Unawareness about the usage and electrical equipment consumption which leads

to wastage of power.

3. Merger and Acquisition – Employee support

4. Loans to fill losses

5. Misutilisation of provisions of Act by the government.

6. Environmental issues

7. Fuel degradation

8. Free power to agriculture

9. Funding

shortfalls(http://www.livemint.com/Politics/XY5DA7xNjZlkBRE04vpqPL/Fundi

ng-concerns-threaten-power-sector.html)

10. Changing technologies before the project life.

4 DELHI DOMESTIC CONSUMERS SLAB CHANGE

VIABILITY CHECK MODEL

In Delhi, Electricity consumers are mainly classified into Domestic, Non domestic,

industrial, Agriculture, Public lighting, Railways, DMRC, Delhi jal Board. Again few

categories are divided into sub categories.

Domestic consumers have been sub divided into four categories depends on their monthly

electricity consumption and billing of their consumption depends on this categories. They

are:- ( W.e.f. 31/07/2013) Before 31.07.2013, it used to be as follows:

Domestic Energy

Charges(Rs/Kwh)

0 – 200 3.90

201 – 400 5.8

401 - 800 6.8

Above 800 units 7.0

Source: DERC tariff order Table 5: Domestic Consumers Tariff

Model:

4.1 SIGNIFICANCE AND SCOPE OF THE MODEL

This Model is a generalized model for domestic consumers in which we will get

the optimum energy charges to each level by giving the necessary constraints to be

fulfilled.

This Model can be used to check the different slab combinations for feasibility of

implementation.

This model uses the Linear Programming model which gives accurate optimum

results.

Domestic: Energy Charges(Rs/Unit)

0-200 3.7

201 -400 5.5

Above 400 6.5

4.2 MATHEMATICAL CONCEPT USED

Linear Programming of Operation Research

4.2.1 Concept of Linear Programming

Linear programming is the process of taking various linear inequalities relating to some

situation, and finding the "best" value obtainable under those conditions. A typical example

would be taking the limitations of materials and labor, and then determining the "best"

production levels for maximal profits under those conditions.

Standard form is the usual and most intuitive form of describing a linear programming

problem. It consists of the following three parts:

A linear function or Objective function to be maximized

e.g.

Problem constraints of the following form

e.g.

Non-negative variables

e.g.

We can have more than one variable (x1,x2,x3,…. So on) . Also, we can minimize the

objective function as well.

4.3 APPLYING LINEAR PROGRAMMING TO DOMESTIC CONSUMER VARIABLE

ELECTRICITY CHARGE CHANGE

4.3.1 Problem

Consumers are requesting to increase the lower slab maximum limit as Delhi’s average

middleclass consumer uses more than 200units per month. Also, they are requesting to

make the upper limit to 400units for the lower slab.

4.3.2 Analysis

Assumptions:

1. We consider the total Delhi’s revenue through the present slab system from

Domestic consumers.

2. In constraints we take that each three Discoms will get the minimum

revenue which is their present revenue.

3. Lower slab tariff can’t be more than Rs.3.7 as per our mentor’s requirement.

4. Considered only BRPL,BYPL and TPDDL slab system for calculations.

5. Revenues has been taken for the financial year 2014 as per MYT tariff

orders submitted by the Discoms.

6. We took two slabs 0 – 400 and 400 above for checking and making the

model due to unavailability of data with different slab levels.

Applicability of Model and Optimum result for the above assumed case:

Data as follows:

BRPL's (FY'14) Variable charge estimated(Cr) (MU)

0 - 200 1033 0 - 400 2437 1139

201 - 400 1404 400 above

2593 1664

400 above 2593

Total 2803

BYPL's(FY'14)

0 - 400 2201.687 0 - 400 2201.687 1000.826512

400 above 469.5728 400 above

469.5728 305.22232

Total 1306.048832

TPDDL(FY 13-14)

0 -100 1203.69

100 - 200 771.82 0 - 400 2730.35 1138.51

200 - 400 754.84 400 above

670.23 435.65

400 above 670.23 Total 1574.16

Source: DERC Discoms MYT petitions

Table 6: Domestic Consumers Sales and variable Energy charge forecast for FY'14

Linear Programming Model for the above proposed data is:

Linear Programming

0 - 400 cost 400 above cost Total Min Revenue

Decision variables X1 X2

Obj. Function 7369037200 3732802800 66330541143

Constraints:

BRPL 2437000000 2593000000 36153563470 28030000000

BYPL 2201687200 469572800 13060488320 13060488320

TPDDL 2730350000 670230000 17116489353 15741600000

Minimum slab(3.7) 1 0 3.7 3.7

Table 7: Linear Programming Model for Proposed Slab change

In the above model , we are minimizing the objective function

Solution: After solving the above LP problem, we get the solution as X1 = 3.7 and X2 =

10.4.

4.3.3 Recommendation

1. As the 400 above slab variable charge is more and unacceptable, this type of system

is not practical.

2. We have to go for other slab alternative where there is a reasonable escalation from

the current charges in each slab

3. Extra Revenue Adjusting Mechanism:

1. If the revenue of any of the Discom is getting more in the optimum solution

then it can be used to anticipate the losses associated with the Discoms.

2. Once these losses are anticipated then this extra amount will be carried out to

the next year as a profit which will be useful to decrease the optimum values.

4. Extendable Applicability of the Model:

1. We can change the constraints as per our requirements with changing future.

2. Revenues can be changed by adding up the regulatory assets to the minimum

required revenues.

3. We can change the revenue requirements by adding up the loss/profit as per

the true up figures approved by the commission (DERC) in the financial year.

5 DEMAND SIDE MANAGEMENT

5.1 INTRODUCTION

Demand-side management is used to describe the actions of a utility, beyond the

customer's meter, with the objective of altering the end-use of electricity - whether it be to

increase demand, decrease it, shift it between high and low peak periods, or manage it when

there are intermittent load demands - in the overall interests of reducing utility costs. In

other words DSM is the implementation of those measures that help the customers to use

electricity more efficiency and it doing so reduce the customers to use the utility costs.

DSM can be achieved through.

Improving the efficiency of various end-uses through better housekeeping

correcting energy leakages, system conversion losses, etc ;

Developing and promoting energy efficient technologies, and

Demand management through adopting soft options like higher prices during peak

hours, concessional rates during off-peak hours seasonal tariffs, interruptible tariffs,

etc.

DSM, In a wider definition, also includes options such as renewable energy systems,

combined heat and power systems, independent power purchase, etc, that utility to meet

the customer's demand at the lowest possible cost.

Often the terms energy efficiency and DSM are used interchangeably. However, it is

important to point out that DSM explicitly refers to all those activities that involve

deliberate intervention by the utility in the marketplace so as to alter the consumer's load

profile. Energy efficiency issued in an all-encompassing sense and includes any activity

that would directly or indirectly lead to an increase in energy efficiency. To make this

distinction precise, a program that encourages customers to install energy efficient lighting

systems through a rebate program would fall under DSM. On the other hand, customer

purchases of energy efficient lighting as a reaction to the perceived need for conservation

is not DSM but energy efficiency gains.

There has been growing recognition of the importance of energy efficiency in India's

electricity sectors. The Ministry of Power (MoP) is the nodal agency for energy

conservation in the country. The Bureau of Energy Efficiency (BEE), an autonomous body

under the MoP, was set up in 1989 to coordinate initiatives and activities on energy

conservation. Several state electricity boards (SEBs) have also set up Energy Conservation

Cells, some of which have been assisting industries in conducting energy audits. Several

reports have been attempted to estimate the potential for energy conservation in various

consuming sectors and have also identified various Energy Efficiency technologies (EETs)

for important end-uses. The National Energy Efficiency Program (NEEP) of the

Government of India (GOI) has targeted savings of about 5000 MW to be realized by the

end of the Eighth plan through both demand (2750 MW) and supply side (2250 MW)

efficiency improvements. In terms of Government policies, there are special equipment in

the first year, subsidies for energy audits, reduced customs duty for selected control

equipment for managing energy use, and so on.

Figure 11: DSM Major Impact areas

5.2 NEED FOR DSM IN DELHI

• The peak demand is growing every year…….. This means more PPA and power

purchase tie up

• Ratio of peak demand and energy consumption is not moving in favorable

direction……….. More energy available for sale during non-peak

• RPO …… Such PPA may not help in meeting peak demand

• The average cost of electricity is going up, as shortage during peak and surplus

during non-peak

• Peak and non-peak affecting electricity quality

• Not able to amend long term PPA

5.3 MAJOR DSM METHODS

• Energy Conservation

• Demand Shift: Shifting of Demand from Peak hours to off-peak hours.

• Consumer Load Control ( Load management)

• Energy Source shift (Renewables)

• Input control: Controlling the consumption pattern of the consumers

5.4 DSM STRATEGIES

• Smart Grid

• Peak Load clipping

• Time of use

• Green Building and Green Corridor

• Renewables

• Agriculture DSM, Municipality DSM and SME DSM

• Japanese techniques

• Dynamic tariff

• Demand Response

Domestic:

• Energy efficient appliances

• Subsidy limit changes in the use of electricity

• TOD tariff

• National building codes

• Separate heavy load line – Interruptible loads

• Change of control after maximum usage limit

• User decided load installation and tariff depends on the load in fixed charges –

Energy efficiency

• Rationale tariff

Industrial:

• Green tariff – 5 different periods and subscribed power concept - France

• Bulk supply tariff – England and Whales – Seasonal + TOD + System Peak – Load

prices

• PPW(Potential Peak Warning) Mechanism

5.4.1 Smart Grid

Smart grid provides the scale and scalability – to make demand-side management cost-

effective and convenient. The pieces are falling into place: the increasing penetration of

smart meters, which may allow homes to connect to data on usage and price; the promise

of ubiquitous data networks; and an intelligent grid that gives utilities visibility into real-

time supply and demand balancing. These technologies give the DSM programs now being

designed by utilities a number of crucial advantage over those of the past.

Major advantages are:

Real time information as narrow as 1hour or even 15minutes.

Transmitting data to consumers in their homes via a home-area network (HAN),

allowing real-time feedback on consumption.

Two-way network between consumers and utilities.

Shifts in consumer behavior

Integration of utility information systems

Regulatory changes

5.4.2 Time of use

Differentiating the consumption tariff depends on the time, day and season of usage.

5.4.3 Green Building and Green Corridor

Green building (also known as green construction or sustainable building) refers to a

structure and using process that is environmentally responsible and resource-efficient

throughout a building's life-cycle: from siting to design, construction, operation,

maintenance, renovation, and demolition. This requires close cooperation of the design

team, the architects, the engineers, and the client at all project stages

Although new technologies are constantly being developed to complement current

practices in creating greener structures, the common objective is that green buildings are

designed to reduce the overall impact of the built environment on human health and the

natural environment by:

Efficiently using energy, water, and other resources

Protecting occupant health and improving employee productivity

Reducing waste, pollution and environmental degradation

The ‘green energy corridor’ is aimed at synchronising electricity produced from renewable

sources, such as solar and wind, with conventional power stations in the grid.

5.4.4 DSM in Agriculture

Provides immense opportunity in

1. Reducing the overall power consumption without Energy Saving Potential

30-40% 30 billion kWh affecting the output

2. Improving efficiencies of ground water extraction

3. Reducing the subsidy burden of the states without billion sacrificing the

service obligation to the sector

Most of energy audit studies project potential of 30% by mere replacement of

inefficient pumps India

All India electricity savings (from 15 million pumps) is estimated at 30 billion units

annually

5.4.5 Potential for EE in Municipal Sector

By adopting energy efficiency measures, each Urban Local Body (ULB) can reap

energy savings in the range of 25% to 40%

This translates to at least 4000 MUs of energy savings annually that can avoid the

need for an additional capacity of 600 MW

Overall, investment in Municipal sector through ESCO system of performance

contract in India has been estimated at Rs 1300 crores (recent ADB study) and has

the potential to save about 3.7 billion units of electricity annually.

5.4.6 Demand Response

Demand response is a strategy used by electric utility companies to reduce or shift energy

consumption from peak hours of the day, when the demand for electricity is thegreatest to

leaner demand periods. It involves allowing customers to choose non-essential loads,

which can be shed by the customers themselves or by the utility, at peak times. It is a pre-

arranged agreement between the Utility or intermediate agencies like aggregators with the

consumer with specific conditions of load, price and time intervals. Since power plants and

transmission systems are designed to respond to the highest potential demand, lowering

peak demand during demand intensive times of the day helps utilities reduce overall

installation costs, operating costs and mitigate potential grid failures.

There are three main types of demand response which includes emergency demand

response, economic demand response, and ancillary services demand response.Each

addresses critical system needs.

Emergency Demand Response is used to mitigate the potential for blackouts or

brownouts during times when demand threatens to exceed supply resources. This

typically occurs on days of extreme hot or cold temperatures when heating and

cooling systems are causing greater demand on the grid.

Economic Demand Response is employed by utilities to avoid the significantly

higher costs of producing energy during peak demand times of the day that is

associated with ramping up "peaking" power plants to meet higher than expected

demand.

Ancillary Service Demand Response is used to support the transmission of

electricity to loads in a manner consistent with reliability requirements that are

imposed on utility companies by industry regulators.

Challenges to Demand Response

Implementing demand response events comes with its set of challenges all of which

revolve around reliability.

Fostering Customer Participation – From a customer's standpoint, participating in

a demand response event can be burdensome, particularly because it might mean

curbing heating and cooling systems on days of extreme temperatures. Utilities

must find appropriate incentives to motivate customers. Customers with flat rates

don't have a vested interested in curbing consumption. To address this, utility

companies often offer rebates and bill credits to entice customers to participate or

use variable pricing to change consumption patterns.

Opt-Out Provisions – Since demand response events can be uncomfortable,

particularly for vulnerable populations like the elderly, many utility companies

have provisions that allow demand response participants to override an event. This

presents reliability challenges.

Signalling an Event – Utilities use various types of technologies to signal a demand

response event to a customer; coordinating DR event with the IT and

communication technologies requires proper selection, testing and implementation.

Integrating Demand Response into Resource Planning

Building Blocks of Demand Response

Demand Response Strategies

There are two common ways in which demand response events are executed by utility

companies including:

Direct Load Control demand response events involve the remote interruption of

customers' energy usage, in which power distributors cycle loads like heating,

cooling, elevators, washing etc. on and off at varying time intervals during peak

hours of the day.

Dynamic Pricing uses variable electricity rates to encourage customers' voluntary

curtailment during demand response events. Utilities use a variety of pricing

schemes including peak time rebates, critical peak pricing, and time of use rates to

curtail usage.

Demand Response Technologies

Technologies to implement a demand response vary depending on the type of strategy

being employed – direct load control or dynamic pricing. Generally speaking, demand

response technologies facilitate communications with customers and/or control heating and

cooling systems.

End-User Interfaces –Utilities send signals to the participants of the Demand

Response program using a variety of channels, including email, phone, and web

portals. In-home or business display devices are another way that utilities can

communicate with consumers about an event, including information about energy

usage and pricing with smart grid. Consumers need to acknowledge their

participation in the program. HAN can be used to connect displays, load control

devices and ultimately "smart appliances" seamlessly into the overall smart

metering system.

Load Control Devices – Utilities use a number of different tools to actually cycle

systems like heating and cooling on and off during demand response events. Load

control switches enable direct remote control over AC units or heating systems.

Smart thermostats allow utilities to adjust temperature settings remotely.

AMI –AMI is increasingly being used with demand response, because it enables

both utilities and end-users to have more robust data about loads, energy usage and

electricity pricing.

Benefits

Proper implementation of Demand Response promises to greatly improve the efficacy of

the system in a number of ways.

Early detection – Smart grid enables utilities to detect and respond to load increases

early by calling a demand response event.

Improved Communication – Smart grid promises to increase the efficacy of demand

response by streamlining the notification process and providing real-time

information to customers about their energy usage and pricing.

Accurate and Easy Verification – Smart grid enables utilities to measure and verify

customers' curtailment during a demand response event in real-time.

Automation Systems – Technologies are under development to automate demand

response processes using smart grid. An automated demand response would

automatically detect the need to shed load, send signals to participants, and control

all devices that use electricity within a home or business.

Figure 12: Demand Response Processes

Demand Response Markets – Smart grid creates a market for energy efficiency by

enabling large energy users to reduce consumption when pricing rates are higher.

Similarly, small and large energy users with distributed generation systems, like

renewable systems, will be able to sell energy back to the grid during demand

response events when wholesale electricity prices are high.

Demand Response in the Indian Context

Demand response is in its nascent stages in India. Its benefits will mirror those seen in

Western countries, such as reduced electricity blackouts, reduced electricity costs,

offsetting the need to build supply resource and the ability to integrate electric vehicles and

renewable energy sources. Regulatory framework also needs to be in place for

implementation of Demand Response strategies. However, considering the large diversity

in the consumers to be served in India, it is necessary to identify the appropriate consumers

to be roped in for Demand Response to ensure the success of the program. Consumer

awareness and maintaining transparency with them must be a priority to win their

confidence and ensure acceptance of the Demand Response program. The electrical

distribution network must be strengthened to ensure reliability in operations. Also, to cater

to the diverse needs of the consumers, a variety of DR modules need to be prepared.

5.5 DEMAND SIDE MANAGEMENT DESIGN

There is no use if increasing the supply without plugging the wastages. It was also

emphasized that price is the main driving factor for DSM and about 15% reduction is

possible through dynamic pricing. Initially the bulk consumers of 1MW and above should

be targetted for DSM.

Figure 13: DSM Design Conditions

Source: IEX

There are various agencies which are responsible for undertaking energy conservation

activities in the country. In line with the EC Act 2001, BEE has initiated various schemes

for promoting energy efficiency in India. The schemes of BEE include Standard and

Labeling programme (S&L), Energy Conservation and Building Code (ECBC), Bachat

Lamp Yojana (BLY), Agriculture DSM and Perform, Achieve and Trade (PAT).At the

state level, various initiatives have been undertaken by the utilities to promote energy

efficiency in the form of replacement of inefficient appliances with the efficient ones.

These programmes have been majorly targeted towards replacement of ICLs with CFLs

and more recently towards replacement of ACs and refrigerators.

Further, in order to provide regulatory framework to DSM, various states such as Gujarat,

Maharashtra, Himachal Pradesh have drafted DSM Regulations for undertaking planning,

design- ing, and implementation of DSM programmes on a sustained basis.

5.5.1 Successful DSM design options

Figure 14: Successful DSM Design options of US

Source: US Smart Grid summer’2010

5.6 BARRIERS TO IMPLEMENTATION OF ENERGY EFFICIENCY IN INDIA

Although energy efficiency in India has improved over the last decade, and energy

intensity has declined by about 20–25%, there are avenues where energy efficiency

opportunities continue to exist largely because of a number of policy, institutional, cost and

information related barriers that inhibit large scale adoption of energy efficient

technologies in India and these barriers are detailed out below:

i. Distorted Pricing Mechanism of electricity: lack of appropriate pricing signals

often result in wasteful usage of electricity particularly by subsidized consumer

categories. In India, for instance, residential and agriculture sectors are being

either subsidized or cross subsidized by industrial and commercial sectors.

ii. High initial cost of energy efficient appliances: energy efficient appliances are

generally costly and entail high upfront costs, which act as a deterrent to their

sale. Also, life-cycle cost of the appliances is not factored in by the consumers

while purchasing energy efficient products.

iii. Lack of availability of energy efficient appliances in the local market: low

demand for energy-efficient products, provide no incentive to local dealers and

retailers to stock such products.

iv. Low level of awareness on part of both consumers and electricity utilities:

consumers are not aware about the available energy efficiency options and the

benefits that can accrue to them through adoption of these options. At the same

time utilities are not aware of the fact that by promoting energy efficiency

measures significant cost reductions can be obtained through less purchase of

costly power during peak hours.

v. Lack of financing options: energy efficiency is considered a notional concept

with no upfront tangible outputs. Thus, financial institutions are generally averse

to financing energy efficiency related investments.

vi. Lack of incentive for the utilities: the cost plus tariff regime does not offer

adequate inducement or incentive to the utility for carrying out DSM measures.

vii. Deteriorating financial condition of the utilities: deteriorating financial

condition of the state owned utilities is a major reason that inhibits utilities to

undertake DSM. As per a report published by Power Finance Corporation (PFC),

during the year 2009–10, the utilities incurred combined losses of $ 12 billion

(without accounting for subsidy).

viii. Problem of split incentives: energy efficiency opportunities are likely to be

foregone if actors cannot appropriate the benefits of the investment. The split

incentive issue is a typical principal agent problem, in which the investor does

not reap the rewards of improved efficiency. For instance, in this situation, the

landlord (agent) buys and supplies all of the components of a potentially energy

efficient apartment or home which includes appliances such as refrigerator, air

conditioning, fans, etc. The landlords incentive is to supply these at the lowest

possible cost (not the highest efficiency), because he does not pay the energy or

utility bills.

In order to address some of these barriers and accelerate the energy efficiency market in

the country, it is required that a different approach be adopted for implementing DSM in

India.

5.7 SUCCESS CASES OF DSM IN NATIONAL & INTERNATIONAL SCENARIO

National:

• The advantages of rural feeder segregation into domestic & agriculture feeders

through Jyoti Gram Yojana and the advantages achieved in the state of Gujarat.

• Secretary (Energy) Kerala informed that they had replaced 1.25 Crores

conventional bulbs(40-60W) with CFLs(15W) which has resulted in savings of

around 350 MW.

International:

Source: National conference on DSM, Delhi 2012

5.8 DSM THREATS IN DELHI

• DSM is low on the priority list of Utilities because they are allowed load shedding.

• Higher power consumption is a revenue generating activity to Discoms

• DSM not only on consumers side but should also be on utility side as well

• Absence of Regulations/Guidelines for DSM implementation

• Lack of public awareness and no clarity on financial incentives

• No clarity about the obligations on Discoms

5.9 SUGGESTIONS AND RECOMMENDATIONS

1. There are no proper regulations from DERC side regarding the DSM plans. Only

draft regulations exist which is also not complete.

2. Only Energy conservation and Energy efficiency initiations have been taken by the

Discoms but not much towards DSM

3. As per the new tariff plan(released on 29.07), TOD exists for other than Domestic

consumers. To make the DSM more attractive regulatory can try for new initiations

regarding

(1) the TOD tariff to Domestic consumers

(2) Separate line for Heavy load appliances usage

(3) Consumer shifting of usage of heavy loads in the off peak period

(4) Roof top viable programmes for usage in Peak load hours especially for above

5kw consumers and flats.

(5) PPW mechanism during Peak loads in order to avoid industries stoppage (as

per the news article)

4. PAT mechanism to all over India - The flagship of the Mission is the Perform

Achieve and Trade (PAT) mechanism which is a market-based mechanism to make

improvements in energy efficiency in energy-intensive large industries and facilities

more cost-effective by certification of energy savings that could be traded. The PAT

mechanism is designed to facilitate the Designated Consumers to not only achieve

their legal obligations under the Energy Conservation Act 2001 but also to provide

them with necessary market based incentives to overachieve the targets set for them.

(Source : http://www.ireeed.org/policydetails?id=15, on 31/07)

Opportunities:

1. New implementation of DSM plans

2. Because of flat load curve and consistency in Load curve we can achieve the long term

PPAs with the surplus power availability of the Delhi Generation

3. Efficient and inexpensive power procurement options

4. Reduction in Power tariffs

http://www.ireeed.org/policydetails?id=15

5. Energy saving

6. More industrialisation and more development as Electricity is the key factor for the

Industrialisation.

7. Helps in the GDP growth

8. R & D development towards more energy conservative and energy efficient

technologies

9. Next Generation DSM technology : Smart Grid

5.10 CONCLUSION

Need to address the following issues for successful DSM implementation:

Churning Wheel for Successful DSM:

Figure 15: Churning Wheel

6 STUDY OF DIFFERENT DSM REGULATIONS AND

RECOMMENDATIONS TO DERC

There are no DSM regulations in Delhi. DERC has released draft regulations for DSM

framework which is incomplete. Hence, we have studied different DSM measures, models,

protocols and regulations to suggest suitable methods for Delhi DSM regulations.

6.1 RECOMMENDATIONS

Recommended Regulatory methods to DERC are as follows:

1. For DSM Cost effectiveness Assessment (Evaluate) – Maharashtra Model

(Decision tree of TRC,RIM,LRI RIM tests)

2. DSM Programs Performance Measurement and Verification – IPMVP Model

6.2 MERC COST EFFECTIVENESS ASSESSMENT METHOD

Cost-effectiveness Criteria:

(i) Distribution Licensees shall send to the Commission the DSM Programmes and Plans

that pass the Cost-effectiveness Criteria set-forth through these Regulations.

(ii) Distribution Licensees shall evaluate Total Resource Cost (TRC) test as the main

hurdle test; followed by the Ratepayer-Impact Measure (RIM) test that confirms the fact

that programme implementation and costs incurred would not impact the tariffs adversely.

(iii) The Life-cycle revenue impact (LRIRIM) should not be more than Rs. 0.01/kWh or

over 0.1% of existing tariff as tariff increase, whichever is higher.

(iv) The programme screening shall be carried out using following decision tree:

a) TRC as the main hurdle test: All DSM programmes that show positive number for the

Net Present Value (NPV) of the Benefits over the NPV of Costs should be considered for

evaluation of RIM test

b) RIM test: DSM Programmes that show positive number when NPV of the Benefits over

the Costs for the Ratepayers are considered should be implemented

c) LRIRIM test: DSM Programmes that do not show positive number for RIM test should

be implemented if the tariff impact due to the implementation of the DSM Programmes is

less than Rs. 0.01/kWh or less than 0.1% of the existing tariff, whichever is higher.

6.3 IPMVP MODEL

This International Performance Measurement and Verification Protocol (IPMVP) is

sponsored by the Efficiency Valuation Organization (EVO), a non-profit private

corporation. The International Performance Measurement and Verification Protocol

(IPMVP) presents a framework and four measurement and verification (M&V) Options for

transparently, reliably and consistently reporting a project’s saving.

“Measurement and Verification” (M&V) is the process of using measurement to reliably

determine actual savings4 created within an individual facility by an energy management

program.

M&V activities consist of some or all of the following:

meter installation calibration and maintenance,

data gathering and screening,

development of a computation method and acceptable estimates,

computations with measured data, and

Reporting, quality assurance, and third party verification of reports.

IPMVP FRAMEWORK AND OPTIONS:

Energy, water or demand savings cannot be directly measured, since savings represent the

absence of energy/water use or demand. Instead, savings are determined by comparing

measured use or demand before and after implementation of a program, making suitable

adjustments for changes in conditions.

Figure

16: Concept of Energy saving measurement

Source: IPMVP Protocol Volume1

The comparison of before and after energy use or demand should be made on a consistent

basis, using the following general Equation:

Savings = (Baseline-Period Use or Demand - Reporting-Period Use or Demand) ±

Adjustments

Two types of adjustments are possible:

Routine Adjustments – for any energy-governing factors, expected to change routinely

during the reporting period, such as weather or production volume.

Non-Routine Adjustments – for those energy-governing factors which are not usually

expected to change, such as: the facility size, the design and operation of installed

equipment, the number of weekly production shifts, or the type of occupants.

Therefore Equation 1) can be expressed more fully as:

Savings = (Baseline Energy – Reporting-Period Energy) ± Routine Adjustments ± Non-

Routine Adjustments

Operational Verification Approaches:

Source: IPMVP Volume1 Table 8: Operational Verification Approach, IPMVP

IPMVP Measuring Options:

Table 9: IPMVP Measuring Options Source: IPMVP Volume1

IPMVP Option Description

Retrofit Isolation: Key

Parameter Measurement

Savings are determined by field measurement of the key

performance parameter(s) which define the energy use of

the ECM’s affected system(s) and/or the success of the

project.

Isolation: All

Parameter Measurement

Savings are determined by field measurement of the

energy use of the ECM-affected system.

Whole Facility Savings are determined by measuring energy use at the

whole facility or sub-facility level.

Calibrated Simulation Savings are determined through simulation of the energy

use of the whole facility, or of a sub-facility.

Option Selection Process:

Figure 17: Option Selection Process, IPMVP

Source: IPMVP Volume1

This is in short about the concepts of the Maharashtra Model and IPMVP model which can

be opted in Delhi regulations.

7 DESIGN OF TIME-OF-DAY TIMINGS FOR RESIDENTIAL

CONSUMERS IN DELHI

7.1 OBJECTIVE

The aim is to design and demonstrate the Time-of-day timings for residential consumers

in Delhi

7.2 RATIONALE FOR TIME-OF-DAY TARIFFS FOR RESIDENTIAL CONSUMERS IN DELHI

One of the problem facing the electricity sector in Delhi has been its growing demand.

Delhi’s Power demand has been growing rapidly. Delhi’s peak consumptions has been

increased from 3900MW in 2006 to 5653MW in 2013, which is expected to be increase in

future. We can also see the Delhi’s growing demand and consumption from the below

statistics: Figure 18: Trend of Energy sales in Delhi

Source: Economic Survey of Delhi 2012-13

If we observe the supply of power in Delhi’s scenario we can observe that Delhi is

purchasing power from other states and its quantity is continuously increasing every year.

This will increase the opportunity for DSM to consumers in order to control the escalation

of tariff.

Figure 19: Trend of Supply of Power and Electricity Consumption in Delhi



Also, we can observe the increment in the Domestic consumer’s consumption pattern and

their part in the total consumption.

Also, proper pricing of electricity in TOD can help in improving the situation by

prompting the consumers to use electricity more efficiently. Implementation of TOD tariffs

is also valid in view of the principle of cost causation i.e.,the category that is responsible

for causing peak shall pay for it and intervention in this category shall result in maximum

impact.

7.3 ANALYSIS OF LOAD CURVES IN DELHI

The Load curves analysis based on data collected from Delhi Transco Ltd (DTL) and Delhi

State Load Dispatch Centre (Delhisldc). The data pertains to two days for each month –

One typical day and the other with the highest peak demand in the month. Load curves are

attached in Annexure 1 for further reference.

FY 2012-13:

Summary table of Load statistics of Delhi is as follows:

Month

Peak

Demand

Met

(MW)

Peak

Demand

Met Date

Peak

time

Max

Unrestricted

Demand

(MW) Date

Max

Unrestricted

Demand

time

March'13 3226 01.03.2013 09.43.39 3590 12.03.2013 19

February'13 3590 01.02.2013 09.59.52 3590 01.02.2013 09.59.52

January'13 4214 09.01.2013 10.13.56 4266 08.01.2013 10.32.29

December'12 3643 31.12.2012 10.59.32 3836 28.12.2012 10.33.03

November'12 3234 23.11.2012 18.25.48 3234 23.11.2012 18.25.48

October'12 3995 04.10.2012 18.52.37 3995 04.10.2012 18.52.37

September'12 4621 13.09.12 15.02.12 4636 13.09.12 15.02.12

August'12 4652 03.08.2012 15.20.35 4661 03.08.2012 15.20.35

July'12 5642 05.07.2012 15.10.14 5727 05.07.2012 15.10.14

June'12 5389 26.06.2012 15.56.34 5472 22.06.2012 15.49.32

May'12 5155 30.05.2012 15.23.40 5193 30.05.2012 15.23.40

April'12 3779 10.04.2012 15.46.48 3779 10.04.2012 15.46.48

Table 10: Load statistics of Delhi for FY'2012-13

Source: Delhisldc

Findings:

TOD classification in our analysis:

Peak hours

Normal hours

Off-Peak hours

By analysing the load curves we can infer the following timings to be categorised under

the TOD classification for every month in the FY2012-13:

Month Peak times(hrs in 24hrs clock) Normal Off Peak Period

March'13 9 to 13 18 to 21 7 to 22 23 to 06

February'13 8 to 12 18 to 20 6:30 to 23 23 to 06

January'13 9 to 12 18 to 21 7 to23 23 to 06

December'12 8 to 12 18 to 21 7 to 22 23 to 06

November'12 8 to 12 17 to 21 7 to 22 22 to 06

October'12 14 to 16 17 to 21 10 to 24 00 to 09

September'12 14 to 16 18:30 to 00:30 10 to 01 01 to 09

August'12 14 to 17 19 to 00:30 10 to 01 01 to 09

July'12 13 to 18 22 to 01 10 to 01 01 to 09

June'12 13 to 17 20 to 24 10 to 01 2 to 10

May'12 14 to 17 21 to 24 11 to 24 1 to 10

April'12 14 to 16 19 to 23

10 to 16 and 18

to 22 00 to 09

Source: Analysis from Delhisldc data Table 11: Analyzed TOD timings for FY'2012-13

• Peak demands in summers is more than the peak demand in winters

• Peak demand from November to March except on January is usually less than the

remaining months. Demand is less than 3700MW throughout.

• Evening time is peak in most of the months.

• Day time peaks mostly occurs in winters.

• Winter demonstrate a more structured pattern of demand than summers, clearly

demarcating occurrence of peak during morning and evening.

• Morning peaks in winter is more than the evening peaks.

• October month pattern is quite changing compared to 2005-06 behavior.

7.4 RESULT

We can recommend following time slots to be recommended for TOU from the analysis:

Winters: October to March

Summers: April to September

Time of day can be suggested as follows:

Winters

Timings Remarks

8 – 12 Peak

12 - 18 Normal

18 - 22 Peak

22 – 8 Off-Peak

Table 12: TOD suggestions for Delhi

7.5 RECOMMENDATIONS

• TOU can decrease the power cuts in the summer timings

• TOU can increase the Discoms profits in all the seasons

• TOU can decrease the extra unrestricted demand cost to the consumers

• Helps in DSM measures

• Helps in stable and quality power supply.

Summers

Timings Remarks

14 - 17 Peak

17 – 20,

09 to 14

Normal

20 - 24 Peak

00 - 09 Off-Peak

7.6 EXPECTED ACTIONS

Some of the expected actions from consumers and utility to make the scheme successful,

include the following:

7.6.1 Consumers

Consumers to opt for TOD tariff plan based on their consumption level and pattern

Replacement of incandescent bulbs and tube lights( along with chokes)

Replacement of inefficient or old tube lights, ACs, fans and geysers

Shift in the usage of heavy loads

7.6.2 Utility

Provide necessary metering/billing services to consumers who wish to opt for TOD

tariffs

7.6.3 Regulatory Commission

Making regulations to mandate utilities for consumer education regarding energy

efficiency and its future impact

Making the CSR budget to be used under this in the initial stage which has been

recently mandated to spend 2% of their net profit ,as per the Companies bill 2011

for the companies with a profit of Rs. 5billion or more, a turnover of Rs.10billion

or more, or a net profit of Rs. 50million or more, in a fiscal year

Making framework for determination of TOD tariff in such a way to benefit both

consumers and utilities as well

Proper regulations for monitoring the DSM programs and the acceptance of DSM

programs.

8 RENEWABLE ENERGY FOR DELHI CONSUMERS

8.1 INTRODUCTION

8.1.1 Renewable Energy in India

India has 28905MW grid-interactive installed capacity of Renewable energy and Off-grid

installed capacity of 907MW. Sources of Renewable energy includes Small hydro Power,

bio mass power, bagasse cogeneration, Waste to power and Solar, Wind power.

India has tremendous energy needs and an increasing difficulty in meeting those needs

through traditional means of power generation. Electricity consumption in India has been

increasing at one of the fastest rates in the world due to population growth and economic

development. India’s economy faces increasing challenges because energy supply is

struggling to keep pace with demand, and there are energy shortages (as much as 15 percent

daily) almost everywhere in the country. Such chronic lack of energy and unreliable

supplies threaten India’s economic growth.

For economic as well as environmental reasons India needs to shift to non-polluting

renewable sources of energy to meet future demand for electricity. Renewable energy is

the most attractive investment because it will provide long-term economic growth for

India. A favorable renewable energy policy could create millions of new jobs and an

economic stimulus of at least US$1 trillion, and perhaps much more if all indirect economic

(ripple) effects are included.

Renewable energy also has the advantage of allowing decentralized distribution of energy

— particularly for meeting rural energy needs, and thereby empowering people at the grass

roots level. Solar electricity could also shift about 90 percent of daily trip mileage from

petroleum to electricity by encouraging increased use of plug-in hybrid cars.

Solar is the prime free source of inexhaustible energy available to all. And, India is one

of the sun's most favored nations, blessed with about 5,000 TWh of solar insolation every

year.

India should take full advantage of this golden opportunity because renewable energy has

particular relevance in remote and rural areas, where there are around 289 million people

who don't have access to reliable sources of energy.

India could potentially increase grid-connected solar power generation capacity to over

200,000 MW and wind energy to over 100,000 MW by 2030 if the right resources (and

more importantly, energy policies) were developed. Present JNNSM target of producing

10 percent of its energy from solar (20 GW) by 2022 is totally inadequate. JNNSM needs

to take bold steps, with the help of central and state Governments, in order to play a greater

role in realizing India's solar energy potential.

India needs a radical transformation of its energy system to the use of renewable energy,

especially solar and wind, to end the “India’s addiction to oil,” lift its massive population

out of poverty and combat climate change.

8.1.2 Renewable Energy in Delhi

Table 13: Source wise Estimated Potential of Renewable Power in Delhi as on 31.03.2012

(Source: Energy statistics 2013): Except Solar

• Installed Grid interactive Waste to Energy is 16MW as on 31.03.12 (Source:

Energy statistics 2013)

• TOWMCL Solid to Waste levelised tariff Rs 2.833/-

State/UT Wind Small HydroBio Mass

Co-generation

Bagasse

waste to

Energy

Estimated

reserves

Distribution(%)

in India

Delhi 0 0 0 0 131 131 0.15

Total(in MW)

Solar:

Installed roof top: 2.56MWp (Source: Energy statistics 2013)

Potential: 2GW by 2020

Delhi has the potential to build around 2.6 GW of solar PV on its rooftops.

A report by Greenpeace India and Bridge to India says Delhi has the

potential to generate 2,557MW of solar power using only 1.6% of the city's

roof space.

Of the 700 km2 of builtup space in Delhi, 31 km2 or 4.42% of Delhi’s

rooftop space is actually available for PV systems. This much space gives

Delhi a geographic solar potential of 2,557 MW.

In 2012, Delhi's tariff increased by about 20% and might rise by 25% in

another five years, while solar prices have almost halved in the past two

years," said Anand Prabhu Pathanjali, energy campaigner, Greenpeace

India.

The average solar irradiation of Delhi according to the RET Screen database

is around 5 kWh/m2/day.

Delhi receives higher irradiation in relation to many other cities of the world

that make a dedicated effort to go solar, including Berlin (98 MW installed),

Munich (27 MW), New York (14 MW), or Beijing (close to 15 MW

installed by the end of 2013)

Table 14: Installation of Off-grid / Decentralized Renewable Energy Systems/Devices as on

31.03.2012(Source: Energy statistics 2013):

SLS = Street Lighting System; HLS = Home Lighting System; SL = Solar Lantern; PP =

Power Plants; SPV = Solar

Photovoltaic; SHP = Small Hydro Power; MW = Mega Watt; KWP = Kilowatt peak

Solar cookers off-grid: 2.53MW (Source: Energy statistics 2013)

8.2 THE VIABILITY OF ROOFTOP SOLAR PV IN DELHI

Delhi’s electricity consumers can be divided into four categories: commercial, industrial,

residential and government. Together, these customer groups can accommodate 2.5GW of

solar on their rooftops. Commercial consumers include type-1 commercial buildings and

type-2 commercial buildings combined with privately owned public and semi-public

facilities. Industrial (type-1 and type-2) and residential buildings are each a consumer

category in themselves. Finally, government consumers include government buildings and

public and semi-public facilities owned by the government.

State/UT

Bio gas

plant

Water

pumping

wind

mills

SPV

Pumps

Nos Nos Nos SLS(Nos) HLS(Nos) SL(No.s) PP(KWP)

Delhi 681 - 90 301 - 4,807 82

Source: Energy statistics 2013

Installation of Off-grid / Decentralised Renewable Energy Systems/

Solar Photovoltaic

There are three types of electricity tariffs in Delhi: non-domestic, industrial and domestic.

Commercial consumers pay non-domestic prices. Industrial consumers pay industrial

prices. Residential and government consumers pay domestic prices.

While power prices in Delhi have kept quite constant between 2005 and 2011, they have

increased steeply since 2011. During the entire interval, domestic prices have increased

from M4.65 (€0.07, $0.09)/kWh in 2008 to M6.4 (€0.98,$0.13)/kWh in 2013, a rise of

27%. Similarly, industrial prices have increased by 37% and non-domestic prices have

increased by 33% during the same period. There are two main drivers for these price rises.

Figure 20: Consumer categories for rooftop solar PV:

Source: Greenpeace report

Firstly, there has been a 50% rise in the cost of international procurement of coal for Indian

power producers since 2004. Secondly, Delhi has seen a drive to making power available

to the city almost 24/7. As a result, DISCOMS need to match peak demand and manage

demand fluctuations, which often lead to wastage of power reserves and the need to buy

more high cost (peak) power.

Figure 21: Historical grid tariff price trend:

While grid power prices have risen, the cost of solar power has declined sharply in the

past two years. The unusually rapid fall in solar prices in the recent years and an increase

in grid prices has made solar competitive. However, we assume that now the cost curve

will again follow its long-term trajectory. The timing for investing into solar is, therefore,

ideal.

While increasingly competitive on a per kWh basis, solar still requires significant upfront

capital investments and hence liquidity. Capital expenditure on PV plants can range from

M550,000 (€8,462, $11,000) for a typical 5 kW system for residential consumers to

M140m (€2m, $2.8m) for a 2,000 kW, bundled installation for government consumers

(cost per Wp reduces as system sizes increase).

With such high investment costs, rooftop solar needs to be financially viable for consumers

investing directly in to their PV plants, or for businesses investing into providing solar

energy as a service to end consumers. Viability means that the investment into a solar PV

plant can provide a return on investment akin to alternate investment opportunities.

The graph and table below summarize the viability of solar for different consumer types,

followed by a detailed analysis.

Figure 22: Viability of Solar rooftop in Delhi

8.3 BENEFITS OF SOLAR ROOFTOPS TO STAKEHOLDERS

Why rooftop solar works for Delhi’s power consumers:

Save on electricity rates

Hedge against increasing grid prices

Additional income from power generation or rooftop leasing

Green power and/or CSR

Supply security through localized generation

Why rooftop solar works for Delhi’s Discoms:

New business models and opportunities

Better load management

Grid stabilization

Why rooftop solar works for Delhi’s Government:

Energy security

Low and stable power costs

Creating job opportunities

Green leadership

Innovation and new technology push

8.4 BUSINESS MODELS FOR ROOFTOP SOLAR

Straight forward sales model: The most common business model for solar

deployment in India today is to simply sell either a complete plant, usually by an

Engineering, Procurement and Construction company (EPC), or individual

components (such as modules or inverters) to an installer or end customer.

The main drawback of the CAPEX model is that the plant owner needs to be

able to finance the entire plant. Solar has a heavily “front loaded” cost structure,

with a high initial investment and very low operating costs. A customer might

not have the required liquidity to finance a system upfront or get the best debt

terms.

Renewable Energy Service Company (RESCO) Model: Under a RESCO model, a

third party investor comes in to invest into a PV plant on a rooftop and sells solar

power to a power consumer.

The model is applicable particularly to such commercial and industrial

consumers in Delhi who are not willing or able to invest e.g. Rs.2.5m (€38,461,

$50,000) for a 100 kW system, but are ready to commit to an attractive long-

term power purchase agreement.

Local Micro Utility Model: One way to reduce the off-take risk for a RESCO

investor is to give solar power generators easy and cheap access to the distribution

grid and allow them to sell power to third parties. Then, solar power developers could

rent large, bundled roof spaces from building owners in a designated area, install PV

systems and sell the power generated to the rooftop owners, other consumers or the

DISCOMs at a pre-negotiated tariff. Having more off-take options would greatly

reduce the risk to the project developer and improve the bankability of the project.

8.5 CONCLUSION AND RECOMMENDATIONS

Delhi has a great potential of Solar and waste to energy. With the profitable and advanced

technologies levelised tariff of these resources will be decreasing in near future and reach

the grid parity. There are opportunity in the renewable sector as:

• RPO: (Source: DERC RPO regulations Oct’2012, on 31/07)

Table 15: RPO Obligations in Delhi

• Increasing primary(Conventional) energy resources price

• Degradation of the reserves of fossil fuels

• Tariff of the grid is reaching to the Renewable energy tariffs and also decrease in

the Renewable energy tariff

• Green Corridor – Ideal case: Germany smart grid

Renewables are the better opportunities and viable solutions to consumers in the present

era of increasing fossil fuel prices and decreasing conventional energy resources.

Year

Solar Total

2012-13 0.15 3.4

2013-14 0.2 4.8

2014 - 15 0.25 6.2

2015 - 16 0.3 7.6

2016 - 17 0.35 9

RPO Obligations(% of Total consumption)

Target

9 CONCLUSION AND RECOMMENDATIONS

Conclusion:

From this we can observe that Major challenges which are contributing to the hike in tariff

can be avoided or decreased by implementing the Demand side management techniques

and Renewable energy options. For example, tariff escalation of minimum 5% every year

in Delhi can be avoided if Delhi can avoid cost increment of power purchase by avoiding

the new PPA requirement, by avoiding unrestricted peak demand, by getting away from

the effect of fuel shortages through Renewable energy etc., In this report we have also

shown the feasibility, rationality and viability of the DSM and renewable solutions to Delhi

power sector which will be a major opportunity area in the present and near future as well.

Recommendations:

Recommended a model to DERC to check the viability of alternative slab levels if

they want to change the slab levels of the Domestic consumers without affecting both

consumers and Discoms as well.

Compared different DSM techniques following in foreign countries and checked the

feasibility of those techniques to Delhi scenario. After checking suggestion has made

towards Time of Use technique adoptability in the present scenario of Delhi Power

Sector.

Analyzed Delhi load curves for the FY2012-13 and recommended TOU timings for

winters and summers.

Recommended the regulatory mechanism for Demand side management and

techniques to be used in the EMV (Evaluate, Measure and Verification) in their

regulations after studying National and International EMV methods.

Studied the Greenpeace report on viability of solar rooftop potential in Delhi and

recommended to explore the potential through consumer education programs

regarding solar power.

APPENDIX

Load curves of 2012-13

0

2000

4000

1 3 5 7 91

11

31

51

71

92

02

22

4

Mar'13

Demand

DAY OF MAXIMUM UN-

RESTRICTED Un-Restricted Demand

0

2000

4000

1 4 7

09.5

…

12

15

18

21

24

Dem

and

Hrs

Feb'13

Demand unrestricted demand

0

5000

1 4 7

10

12

15

18

21

24

Dem

and

Hrs

Jan'13


0

5000

01:0

0

04:0

0

07:0

0

10:0

0

12:0

0

15:0

0

18:0

0

21:0

0

24:…

Dem

and

Hrs

Dec'12


0

2000

4000

1 4 7

10

13

16

18.2

…

21

24

Nov'12


0

5000

1 4 7

10

13

16

19

22

Oct'12


0

5000

1 4 71

01

31

5.0

21

82

12

4

Sep'12


0

5000

1 4 71

01

31

5.2

…1

82

12

4

Aug'12


02000400060008000

01:0

0

04:0

0

07:0

0

10:0

0

13:0

0

15:1

0:1

4

18:0

0

21:0

0

24:0

0:0

0

July'12


0

2000

4000

6000

01:0

0

03:0

0

05:0

0

07:0

0

09:0

0

11:0

0

13:0

0

15:0

0

17:0

0

19:0

0

21:0

0

23:0

0

June'12


0

1000

2000

3000

4000

1 3 5 7 91

11

31

51

61

82

02

22

4

Apr'12


0

1000

2000

3000

4000

5000

6000

1 3 5 7 91

11

31

51

61

82

02

22

4

May'12


BIBLIOGRAPHY

1. Michael Stamminger (2002-03), ‘Privatisation of Electricity in Delhi’, Centre for

Civil Society, Delhi

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http://www.derc.gov.in/

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http://www.jica.go.jp/kyushu/index.html

http://www.mercindia.org.in/

http://www.greenpeace.org/india/Global/india/report/2013/Rooftop-Revolution.pdf

http://www.greenpeace.org/india/Global/india/report/2013/Rooftop-Revolution.pdf

http://www.teriin.org/projects/nfa/pdf/DSM_power_plant.pdf

http://delhi.gov.in/wps/wcm/connect/DoIT_Planning/planning/our+services/economic+survey+of+delhi

http://delhi.gov.in/wps/wcm/connect/DoIT_Planning/planning/our+services/economic+survey+of+delhi

http://www.delhitransco.gov.in/EnergyEfficiency/201207/TERI%20Report.pdf

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