The concept of DSM for consumers is not new to Indian utilities, though it is yet to pick up momentum. In the early days, many power utilities leased power-consuming devices such as electric toasters to consumers. The cost of the equipment used to be recovered from the consumer through the electricity bills. This was a version of DSM for diversifying the activities beyond traditional areas taking some advantage of the experience and network to deal with the customers. In recent years, there have been a few attempts by utilities
to offer energy conservation related services, but these are more of an exception than the rule.
DSM on the consumer side requires that a system of collection, analysis,and reporting on the consumer’s energy consumption and costs be established.Based on this information, different combinations of value and cost changes can be used, in general, for mutually benefiting the utility and its customers.
Three such combinations are given as illustrations in Table.
to offer energy conservation related services, but these are more of an exception than the rule.
DSM on the consumer side requires that a system of collection, analysis,and reporting on the consumer’s energy consumption and costs be established.Based on this information, different combinations of value and cost changes can be used, in general, for mutually benefiting the utility and its customers.
Three such combinations are given as illustrations in Table.
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| Different Options for Energy Value and Costs |
Many DSM programmes for all categories of consumers include measures
such as:
• energy efficiency retrofits (weatherisation) of homes, particularly for low-income customers;such as:
• energy audits for commercial businesses and industrial units;
• small rebates to install certain types of efficient new equipment such as geothermal heat pumps;
• assistance in financing efficiency improvements;
• information about energy for school children and the general public;
• information about efficient construction methods for new homes; and
• economic criteria for the energy and environmental planning process.
We now discuss the specific DSM activities that can be taken up by utilities as well as consumers along with a few examples from the industrial, agricultural,domestic and commercial sectors of our economy.
To begin with, you need to understand the sector-wise pattern of electricity consumption in our country (Fig.). It reveals that the industrial consumption(~ 36.5%) is the highest, followed by agriculture (~ 31%), domestic (~ 20%) and commercial (~ 6.5%).
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| Sector-wise Electricity Consumption in India |
A report of the National Development Council committee on power has indicated (Table) the power consumption levels and saving potential in the industrial, agricultural and domestic and commercial sectors in India.We first outline the DSM strategies needed for the industrial sector to realise this energy saving potential and achieve energy conservation.
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| Electricity Saving Potential |
You have just learnt that the industrial sector uses about 37% of the total commercial energy available in India. The major consumers of energy are fertilizer, textile, sugar, cement, and steel industries.
Fig. shows the relative consumption of electricity by various sectors such as Iron and Steel (18%), Textile (13%), Aluminium (13%), Fertilizers (10%),Cement (10%), Chemicals (9%), Paper (4%) and Sugar (3%) within the industrial sector.
The Indian industrial sector is highly energy intensive and its efficiency is well below that of other industrialized countries. For example, the best achieved annual energy consumption by an integrated steel plant is reported to be about 7.17 giga calories per tonne of crude steel against the internationalfigure of 5.6 giga calories per tonne of crude steel. This shows that a great deal of effort will be required for improving the energy efficiency in the industrial sector in India.
Studies have shown that the energy savings potential in the industrial sector ranges from 20-30% relative to a business-as-usual scenario . If industries can promote energy conservation, it could lead to substantial reduction in their costs of production. For example, energy services such as compressed air are often overlooked and yet a leak in a compressed air line can be wasting lakhs of rupees every year.
Energy Conservation in Industries
Sporadic energy conservation efforts in the industrial sector have been taking place due to increasing awareness of the strong linkages between cost of production and energy usage. In the light of India’s growing participation in the global economy, increased market pressure is largely responsible for motivating industries to seek energy conservation measures for lowering their cost of production. Campaigns by the government and private institutions are also responsible for disseminating knowledge and promoting awareness of energy conservation measures.
However, a precise national level picture on industrial efficiency is extremely difficult to predict. One cannot ignore the large contribution of process efficiencies on the energy productivity indices which vary depending on the sector, technology, feed stocks age, management style, etc. There exists a crying need for in-depth research.For example, a study was carried out to examine the potential for achieving energy efficiency by implementation of DSM options for HT consumers in Maharashtra. The options included energy efficient motors, variable speed drives, vapour absorption refrigeration systems (VARs), improved electric arc furnaces (EAFs), high efficiency fans and pumps, and industrial cogeneration
(COGEN). The payback period for these options, according to the study,varied from 0.5 to 2.4 years with an active DSM programme and between 0.6 to 4 years without a DSM programme. The study has developed a 5-year DSM plan for Maharashtra with an estimated total cost of about Rs 400 crores.The study reveals that the DSM plan would result in reductions of more than 9 million tonnes in CO 2 emissions over the five-year period.
percentages
It goes without saying that there is considerable room for improving the energy efficiency of our industries. Studies reveal that up to 75% of electricity use in industry is by motors and motor driven systems. Another 11% is by electrolysis, 9% by lighting and 3% by electric melting furnaces (Fig.).In the recent years, some efforts have been made for the diffusion of energy efficient technologies in motor drives, energy efficient lighting systems and process changes. Some measures that are being taken and could be undertaken by the industries to curtail electricity consumption are:
• installation of variable frequency drive;
• installation of vapour absorption systems;
• upgrading co-generation facilities;
• installation of auto/manual Star-Delta converters;
• use of high efficiency pumps and blowers;
• lighting modifications;
• replacing electrical heaters; and
• installing capacitors.
Many industries (e.g., the steel industry) use large amounts of electricity to power various specialised processes at high temperatures. In many cases,such requirements exceed those of the buildings where the activities are housed and of the people within them. Industries could resort to methods like ‘cascading’ of energy uses, where ‘waste’ heat from a high-temperature process is used to provide energy for lower temperature processes. High-efficiency electric motors, pumps, fans and drive systems can be used with accurate matching of motors to the tasks they are required to perform,and accurate sizing of pipes and their associated pumps. This calls for energy use optimisation at all possible levels by choosing the best suited energy practices vetted through effective energy simulation models.
Dematerialisation, i.e., a reduction in the material-intensity (and hence the energy-intensity) of production, is another major measure that can be adopted by industries. It includes
• reduction in the material content of products, for example, in car bodies or drinks cans, where thinner metals can be used without any reduction in the required strength;
• substitution of less energy-intensive materials, as in the use of plastics instead of steel for car bumpers/bodies.However, the application of DSM ideas to the industrial sector is still very limited though it holds large potential especially in the context of implementation of Energy Conservation Act, 2001 in sectors such as cement, steel, paper, chlor alkali, fertilizer, aluminium, textile, etc. It is expected that DSM activities would receive a boost under the EC Act and power utilities would be able to capture a vital role for overseeing the implementation and verification of savings. By now, you may be wondering: Why do majority of industrial firms not take advantage of the opportunities for energy savings available in the industrial sector? We list some of the reasons below.
• Energy costs are generally a small fraction of the total industrial costs. This means that the typical firms pay only limited attention to their energy bills.
• For most firms, capital is scarce. Energy-efficiency projects are considered non-strategic and take low priority when industrial firms allocate capital.
• The links between improvement in energy efficiency and improvements in plant productivity, product quality, environmental emission requirements,and labour and materials efficiency are generally not well understood.Besides, relevant details are not often shared in the public domain.
The complex issues impacting the industrial sector have to be addressed at many levels involving the specific sector associations, academics and researchers besides the industry experts. Perhaps, BEE would be able to address this issue as a part of its mandate. We end this section by presenting an example of DSM implementation by a power utility in an industry.
The Agricultural Sector
The need for DSM is felt the most in the agricultural sector where the water-energy nexus is a major cause for the precarious financial condition of the power sector in India today. Water for agriculture is supplied virtually free of charge and, therefore, farmers use as much of it as possible. Water withdrawal is an energy intensive operation throughout the agricultural sector and about 30-40% of India’s power consumption is used for irrigation. The irrigation pumping electricity use is at the heart of the subsidy issue. Along with electricity theft and T&D losses, it comprises the root cause for the sector’s financial dilemma.
At present, there are over 12.5 million electricity operated pump sets. A majority of them are inefficient and consume 50 to 100% more electricity thanm the optimum, mainly due to improper selection of pump sets and usage of inefficient and sub-standard accessories. DSM by utilities is a highly beneficial activity for the agricultural sector because of the subsidized prices and high costs of supply resulting from technical and commercial losses.Some strategies that could be adopted for improving energy efficiency in this sector are listed below:
• Promoting R&D programmes for the development of energy efficient pumping systems and commercialization of the prototype.
• Awareness campaigns for popularization of energy efficient pumping systems amongst the farmers.
• Replacement of inefficient agricultural pump sets by newly developed energy efficient pump sets.
• Infrastructure for setting up comprehensive motor/pump testing facility including design, evaluation of energy efficient labelling systems, etc.
•Measures for water conservation: To provide the farmers with the means and incentive to conserve water, public bodies must provide water at a realistic cost and simultaneously improve the quality of service they provide to the point where farmers will be willing to pay for it. However,attitudes about the public ownership of water make this transition difficult.
We now give an example of a DSM programme adopted by a utility for this sector.
The Domestic and Commercial Sectors
The domestic and commercial electricity consumption in India is about 27% of the total consumption. In the domestic sector, consisting of individual households, electrical power is mainly used for the following purposes:
• cooking;
• lighting;
• cooling (fans, refrigerators, desert coolers, air conditioners, etc.);
• heating (geysers, water heaters, room heaters, etc.);
• domestic appliances (washing machines for dishes and clothes, toasters, mixers, grinders, entertainment systems, computers, etc.);
• building air-conditioning and limited use for heating (HVAC); and
• swimming pool water filtering amongst the urban elite, etc.
In the commercial sector, which consists of offices, shops, schools, hospitals, banks, etc., lighting and HVAC (Heating, Ventilation, Air Conditioning and Cooling) constitute the bulk of electricity use. Electricity demand in low-income urban areas, however, tends to be heavily skewed towards the peak periods of power demand in the mornings and evenings, even though total electricity usage is low.
Thus, the essential components of the demand side management and energy efficiency domain in these sectors are:
• use of energy-efficient appliances;
• efficient components for buildings; and
• methods to manage an assembly of appliances and systems in order to improve the use of energy system capacities.
Huge quantities of electrical energy can be saved for less than the cost of generating and transmitting the same amount of electricity if we understand that Except in the form of food, no one needs or wants energy as such. That is to say, no one wants to eat coal or uranium, drink oil, breathe natural gas or be directly connected to an electric supply! What people want are energy services – those services which energy can provide uniquely in an efficient and desirable manner. Why don’t you make a list of the energy services required by the domestic and commercial consumers?
Many opportunities to implement demand side management can be uncovered simply by attitudinal changes. For example, by recognising that we don’t just want energy, we want the services that energy provides. For instance, we should be happy to use an energy efficient fridge versus a standard fridge provided that both provide the same services (i.e., they both keep our food cool). Thus, the more efficient the ways of providing energyservices required by the consumers are, the greater would be the energy savings. Air conditioning is more prevalent in the commercial sector than in the domestic sector – at least in poor countries and countries with temperate climates. In both these sectors, the bulk of energy consumption is within buildings and appliances. From experience, we know that buildings consume a large chunk of the available energy and rely more on artificial lighting than on natural lighting and ventilation.
There are various opportunities and techniques available for reducing energy consumption such as efficient motors and transformers, day lighting, variable speed drives, solar hot water systems, etc. These technologies reduce demand, help in lowering high peak prices and also reduce greenhouse gas emissions due to less stress on generating plants. The underlying idea forDSM in these sectors is to encourage people to use more efficient energy technologies to get more power for the same amount of energy inputs and reduced costs as well as to change the ways in which they use energy.
The DSM strategies that can be adopted for improving energy efficiency in the commercial and domestic sectors are:
• development and enforcement of energy efficiency standards;
• mandatory energy labelling and ISI certification of all energy using devices;
• awareness campaigns;
• providing incentives to energy efficient equipment manufacturers;
• promotion of vapour absorption refrigerators to utilise waste heat available in hotels/restaurants;
• use of energy efficient lighting appliances such as CFLs, electronic ballasts, etc. by reducing excise duty in order to reduce their high initial cost;
• promotion of energy efficient buildings, etc.
We now briefly discuss some specific DSM measures that can be taken in these sectors.
Lighting Efficiency Improvement
Lighting, of course, is a very ‘visible’ consumer of energy. Almost two-thirds of the lighting points in India are fitted with incandescent lamps (ordinary bulbs). The fluorescent lamps of 40W/36W rating and 20W/18W rating(commonly known as tube lights) have gained considerable consumer acceptance and are reasonably priced. Compact and small tube fluorescent lamps and electronic dimmable ballasts are now sufficiently reliable sources of lighting. These are slowly gaining acceptance and taking the market over from conventional incandescent and fluorescent lamps.
The lighting industry has already put a lot of effort into systems that produce substantial energy savings. The lighting equipment used today consumes only one fourth of the energy that a typical lighting system of the seventies did,thanks to a clear progress in lamp, ballast and reflector design. New lamp technologies such as sulphur lamps and induction lamps are under development. However, the best lighting technology is still less than 20% efficient in turning electricity into light. So there is a lot of scope for improvement. Table describes the energy savings through the use of CFLs.
• efficient components for buildings; and
• methods to manage an assembly of appliances and systems in order to improve the use of energy system capacities.
Huge quantities of electrical energy can be saved for less than the cost of generating and transmitting the same amount of electricity if we understand that Except in the form of food, no one needs or wants energy as such. That is to say, no one wants to eat coal or uranium, drink oil, breathe natural gas or be directly connected to an electric supply! What people want are energy services – those services which energy can provide uniquely in an efficient and desirable manner. Why don’t you make a list of the energy services required by the domestic and commercial consumers?
Many opportunities to implement demand side management can be uncovered simply by attitudinal changes. For example, by recognising that we don’t just want energy, we want the services that energy provides. For instance, we should be happy to use an energy efficient fridge versus a standard fridge provided that both provide the same services (i.e., they both keep our food cool). Thus, the more efficient the ways of providing energyservices required by the consumers are, the greater would be the energy savings. Air conditioning is more prevalent in the commercial sector than in the domestic sector – at least in poor countries and countries with temperate climates. In both these sectors, the bulk of energy consumption is within buildings and appliances. From experience, we know that buildings consume a large chunk of the available energy and rely more on artificial lighting than on natural lighting and ventilation.
There are various opportunities and techniques available for reducing energy consumption such as efficient motors and transformers, day lighting, variable speed drives, solar hot water systems, etc. These technologies reduce demand, help in lowering high peak prices and also reduce greenhouse gas emissions due to less stress on generating plants. The underlying idea forDSM in these sectors is to encourage people to use more efficient energy technologies to get more power for the same amount of energy inputs and reduced costs as well as to change the ways in which they use energy.
The DSM strategies that can be adopted for improving energy efficiency in the commercial and domestic sectors are:
• development and enforcement of energy efficiency standards;
• mandatory energy labelling and ISI certification of all energy using devices;
• awareness campaigns;
• providing incentives to energy efficient equipment manufacturers;
• promotion of vapour absorption refrigerators to utilise waste heat available in hotels/restaurants;
• use of energy efficient lighting appliances such as CFLs, electronic ballasts, etc. by reducing excise duty in order to reduce their high initial cost;
• promotion of energy efficient buildings, etc.
We now briefly discuss some specific DSM measures that can be taken in these sectors.
Lighting Efficiency Improvement
Lighting, of course, is a very ‘visible’ consumer of energy. Almost two-thirds of the lighting points in India are fitted with incandescent lamps (ordinary bulbs). The fluorescent lamps of 40W/36W rating and 20W/18W rating(commonly known as tube lights) have gained considerable consumer acceptance and are reasonably priced. Compact and small tube fluorescent lamps and electronic dimmable ballasts are now sufficiently reliable sources of lighting. These are slowly gaining acceptance and taking the market over from conventional incandescent and fluorescent lamps.
The lighting industry has already put a lot of effort into systems that produce substantial energy savings. The lighting equipment used today consumes only one fourth of the energy that a typical lighting system of the seventies did,thanks to a clear progress in lamp, ballast and reflector design. New lamp technologies such as sulphur lamps and induction lamps are under development. However, the best lighting technology is still less than 20% efficient in turning electricity into light. So there is a lot of scope for improvement. Table describes the energy savings through the use of CFLs.
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| Energy Savings Through the Use of CFLs Lighting Power Light Cost Life No. of |
To save even more energy, without endangering lighting quality, we could use additional control techniques, such as daylight-dependent regulation.Electronic sensors, time clocks, computerised lighting control systems or the building’s mechanical control systems can be used to control the lighting on and off periods depending on the time of the day. The use of such automatic controls takes away the responsibility of the occupant to control the lighting and assures a perfect adaptation to the specific situation in each work place.
There are easily adjustable sensors that can be used to set the light level individually, according to each user’s wishes or the room geometry. Improving Energy Efficiency of Buildings and Appliances Much of energy use occurring within buildings consists of requirements for space heating/cooling, water heating, cooking, lighting and appliances.Commercial building energy consumption can be reduced by an average of 55% primarily through controlling lighting and air conditioning loads. Specific technological measures that can be taken to conserve energy within buildings include:
• improved levels of insulation in walls, roofs and floors, to reduce heat losses through these elements;
• energy-efficient windows, (e.g., double glazing windows) designed to allow less heat to escape whilst still admitting large amounts of sunlight;
• draught-proofing and heat recovery systems to reduce heat loss through ventilation whilst retaining sufficient fresh air within the building;
• more efficient boilers that require a smaller fuel input to achieve a given level of space or water heating, together with improved insulation of pipes to reduce heat losses;
• energy-efficient lights that require much smaller amounts of power to provide a given level of illumination, e.g., CFLs along with the choice of the lamp type/number according to the needs of various areas within a building envelope.
ESCO – A Route for DSM
Delivery of energy efficiency services through ESCOs has been identified as one of the thrust areas under the Energy Conservation Act, 2001. An ESCO can implement and finance energy efficiency measures at the user’s premises.The use of ESCOs is attractive for utilities as well as the users as it entails very little initial investment by them. The ESCO is generally paid only if energy\ savings are realised. Basically, the ESCO’s services are paid for through the savings generated by the reduction in energy costs over a period of time.In an ESCO arrangement, an audit is conducted to establish baseline data of the current energy consumption. The energy saving potential is assessed by the ESCO based on the audit. A performance contract is developed. The ESCO generally gives a guarantee on energy saving for a stipulated time period (typically four to five years). There is an O&M agreement with the ESCO, which includes retrofits in order to ensure sustained savings. Such energy saving projects can be financed either by the ESCO, banks or other financial institutions.
The Bureau of Energy Efficiency (BEE) has also been entrusted with the task of building capacity for the growth of ESCOs. It is working with stakeholders and the government to arrive at a viable payment mechanism for ESCOs. This practice is relatively new to India and there are only a handful of companies acting as ESCOs. In most cases, it is the equipment manufacturers whoundertake energy saving projects, more as an additional service to their clients. Also, most of the Indian companies have taken up such energy saving projects as joint ventures with foreign companies.ESCOs have so far had mixed success in the Indian market. They have been limited by a number of factors.
There are easily adjustable sensors that can be used to set the light level individually, according to each user’s wishes or the room geometry. Improving Energy Efficiency of Buildings and Appliances Much of energy use occurring within buildings consists of requirements for space heating/cooling, water heating, cooking, lighting and appliances.Commercial building energy consumption can be reduced by an average of 55% primarily through controlling lighting and air conditioning loads. Specific technological measures that can be taken to conserve energy within buildings include:
• improved levels of insulation in walls, roofs and floors, to reduce heat losses through these elements;
• energy-efficient windows, (e.g., double glazing windows) designed to allow less heat to escape whilst still admitting large amounts of sunlight;
• draught-proofing and heat recovery systems to reduce heat loss through ventilation whilst retaining sufficient fresh air within the building;
• more efficient boilers that require a smaller fuel input to achieve a given level of space or water heating, together with improved insulation of pipes to reduce heat losses;
• energy-efficient lights that require much smaller amounts of power to provide a given level of illumination, e.g., CFLs along with the choice of the lamp type/number according to the needs of various areas within a building envelope.
ESCO – A Route for DSM
Delivery of energy efficiency services through ESCOs has been identified as one of the thrust areas under the Energy Conservation Act, 2001. An ESCO can implement and finance energy efficiency measures at the user’s premises.The use of ESCOs is attractive for utilities as well as the users as it entails very little initial investment by them. The ESCO is generally paid only if energy\ savings are realised. Basically, the ESCO’s services are paid for through the savings generated by the reduction in energy costs over a period of time.In an ESCO arrangement, an audit is conducted to establish baseline data of the current energy consumption. The energy saving potential is assessed by the ESCO based on the audit. A performance contract is developed. The ESCO generally gives a guarantee on energy saving for a stipulated time period (typically four to five years). There is an O&M agreement with the ESCO, which includes retrofits in order to ensure sustained savings. Such energy saving projects can be financed either by the ESCO, banks or other financial institutions.
The Bureau of Energy Efficiency (BEE) has also been entrusted with the task of building capacity for the growth of ESCOs. It is working with stakeholders and the government to arrive at a viable payment mechanism for ESCOs. This practice is relatively new to India and there are only a handful of companies acting as ESCOs. In most cases, it is the equipment manufacturers whoundertake energy saving projects, more as an additional service to their clients. Also, most of the Indian companies have taken up such energy saving projects as joint ventures with foreign companies.ESCOs have so far had mixed success in the Indian market. They have been limited by a number of factors.
• Lack of suitable financial mechanisms to fund their projects. The payment agreement generally is such that the ESCO is paid only if savings are realised. Therefore, even lenders are sceptical about investing in such projects.
• Most ESCOs offer specialised services pertaining only to a particular process. Thus, an ESCO specializing in, say, lighting or HVAC or control systems may not be able to offer more comprehensive services. This would result in lower savings for the user. Also, some energy saving services are more attractive than others. It has been seen that lighting offers the most attractive savings, as it involves low investments. On the other hand, enhancing the efficiency of HVAC systems is costlier and has a longer gestation period. It would, therefore, be desirable for ESCOs to offer a complete package, with specialist companies forming consortia to offer comprehensive services.
The concept of ESCOs is still new to India. There are very few stand-alone ESCOs and some companies had to shut down operations due to the limited demand for their services. There is, thus, a need to increase awareness among utilities about the benefits of using ESCOs. Along with this, it is essential to find a suitable financial mechanism to pay for these services.The discussion so far throws up several issues in the implementation of DSM.We shall end this unit with a brief discussion of these issues.
• Most ESCOs offer specialised services pertaining only to a particular process. Thus, an ESCO specializing in, say, lighting or HVAC or control systems may not be able to offer more comprehensive services. This would result in lower savings for the user. Also, some energy saving services are more attractive than others. It has been seen that lighting offers the most attractive savings, as it involves low investments. On the other hand, enhancing the efficiency of HVAC systems is costlier and has a longer gestation period. It would, therefore, be desirable for ESCOs to offer a complete package, with specialist companies forming consortia to offer comprehensive services.
The concept of ESCOs is still new to India. There are very few stand-alone ESCOs and some companies had to shut down operations due to the limited demand for their services. There is, thus, a need to increase awareness among utilities about the benefits of using ESCOs. Along with this, it is essential to find a suitable financial mechanism to pay for these services.The discussion so far throws up several issues in the implementation of DSM.We shall end this unit with a brief discussion of these issues.
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