Demand Side Management in Power Planning: An Exercise for HT Industries in

Maharashtra
Author(s): Rangan Banerjee and Jyoti K. Parikh
Source: Economic and Political Weekly, Vol. 28, No. 32/33 (Aug. 7-14, 1993), pp. 1659-1670
Published by: Economic and Political Weekly
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 SPECIAL ARTICLES

Demand Side Management in Power Planning

An Exercise for HT Industries in Maharashtra
Rangan Banerjee
Jyoti K Parikh

India needs to seriously consider demand side management (DSM) options to.meet the growing electricity
requirements. In this papera DSMplan is chalked outfor the high tension (H T) industries'in Maharashtra. Ten
different DSM options have been considered. Technology characteristics have been obtained from manu4fac-
turers and end-use analysis is based on the IGIDR-HT survey. Market penetration of DSM options has been
modelled using a diffusion curve. Programme costs hiave been included for each DSM option.
I ciency measures. An outlay of Rs 1,000 HT survey[6] to assess the potential market
Introduction crore out of a total outlay of Rs 1,15,480 for each DSM option. In our analysis, we
crore for the energy sector (Rs 79,589 crore delineate the energy savings into peak, off-
TO meet increasing demand for power the for the power sector) hag been provided to peak and partial peak savings depending on
typical response is supply sided 'Build new achieve targeted energy savings of 5,000 the time period (hour at which saving oc-
power plants' even though there is much MW in the electricity sector and six million curs). To obtain demand savings we con-
that can be done to reduce energy consump- tonnes in the petroleum sector. A target of sider a peak coincidence factor. A diffusion
tion at the consumer' s end. 'Energy saved is
2,250 MW demand saving in the industrial, curve is used to model the diffusion of DSM
energy generated' goes the cliche. How- commercial, agricultural and domestic sec- technologies into the market. The analysis
ever, energy saved at the consumer's end is tors has been set for the Eighth Plan. The also includes costs of operating and moni-
several times more effective than creating National Energy Efficiency Programme toring DSM programmes.
extra generating capacity when one consid- during the eighth plan would include com- The present paper deals with the Eighth
ers. ponents of policy package, financial ar- Five-Year Plan targets for DSM in Maha-
-Transmission and distribution losses rangements including creation of a revolv- rashtra. This paper presents some of the
avoided. ing fund, technical assistance, technology preliminary findings of the EMCATproject
-Extra capacity and hence capital needed development, selective legislation and de- on DSM in HT industries in Maharashtra.
to generate and transmit that energy. veloping institutional capabilities. How-
-Reduced environmental impacts. Re- ever, the targets and the capital outlay have LI
duced global warming. Reduced local pol- been fixed arbitrarily. This paper provides Methodology
lution associated health impacts. a methodology as well as provides specific
-.Fuel saved and hence no additional re- targets for individual measures for electric- A list of 10 DSM options for the high
quirements for coal mining and railway ity and power savings by different DSM tension industries of Maharashtra has been
linkages. options. Project costs for these energy and drawn up. For each teclhnology the follow-
-Gestation period reduced from five years demand savings have been computed. This ing input data have been used:
to one-two years. paper attempts to evolve a rational basis for (a) Technology characteristics: The tech-
-Saved land, manp,wer and water require-deciding on targets for DSM. nology characteristics include capital, in-
ments necessary for extra generation as Reddy et al [2,3] proposed DEFENDUS stallation, 0 and M cost, useful lifetime,
-Demand side management (DSM) takes a development-focused end-use-oriented current market share and peak co-incidence
place in the consumer's territory. electricity scenario for Karnataka. It con- factors. The technology characteristics have
Some may argue that the last three points siders a few DSM options and does not been taken from manufacturers catalogues.
are important only when the savings are consider diffusion curve for technology, (b) Market segntent profiles: The market'
substantial. However, these savings could peak coincidence factor or the programmesize and growth rates are required as input
be as large as 15000 MW on an all-India costs for these options. However, they data. The market size has been obtained
basis for a 20-year perspective. These can be examine other supply options, which the from the IGIDR-HT survey[6] of end-use
significant percentage of requirements of present paper does pot as it is supposed to do analysis in HTIndustries. It is assumed that
additional power plants. Increased energy a rigorous analysis of more than 10 DSM the HT industries electricity growth rate is
efficiency is a topic which has been dis- options with perhaps the first comprehen- 7 per cent in the first year and gradually
cussed by planners without specifics for a sive DSM plan for industries in India. A reduces to 5 per cent at the end of a 20-year
long time. Only recently, in the Eighth Plan,critique of DEFENDUS model by J Parikh[4] period.
it has been recognised that energy conser- pointed out that there is a need to take a (c) Price of electricity: The currcnt
vation and management requires financial larger view of opportunities that exist at thc charges of MSEB for the industrial sectorof
allocation. While energy supply planning isconsumers end and implications of these Rs 2 per unit and Rs 100/kw of demand have
done with a reasonable degree of articula- for different agents involved, viz, been used. A 10 per cent escalation in
tion, expected contributions from DSM customer's, utilities, state or central gov- nominal rates every year is assumed. This is
are generally indicated in percentage terms ernment agencies, private sector partiesused andto determine pay back periods.
merely as a possibility without specific look into societal benefits. Nadel et al[5]
annual targets. his is because no satisfac- have examined the opportunities and barri- WHAT IS A DSM PROGRAMME?
tory methodology for even formulating a ers to improved end-use efficiency in India.
DSM involves intervention by the utility
DSM plan exists. In the present study, we concentrate onon 10
the customer side of the meter to achieve
The Eighth Plan[l] is the first plan to different DSM options for the IIT industry.
customer load modifications. An explana-
provide a capital outlay for energy effi- We use the results of the extensive IGIDR-
tion of different terms associated with DSM

Economic and Political Weekly August 7-14, 1993 1659

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is provided in the glossary. DSM option and for preparing pamphlets and publicity assistance to participating industries. The
needs to be launched with a suitable finan- material. This has been taken as Rs 20, specific measures for load shifting suitable
cial package catering to a particular option. lakh'. An additional cost will be involved for different participating industries will be
DSM option with its financial incentives is for time of day tariffsb as the billing for the identified by the time of day (TOD) expert
called DSM programme. There is a differ- HT industries adopting the programme will' cell. The TOD annual recurring cost has
ence in the availability of capital (and the be based on the time of day meter readings. also been taken as Rs 9 lakh.
interest rates) for the utility and the cus- The initial programme set-up cost for the For industrial cogeneration a question-
tomer. This is reflected in the difference in time of day tariffs will be higher than the naire is to be sent to the industries. This
the discount rates. The utility discount rate other programmes and has been taken as Rs will be followed up by a feasibility study
of about 14 per cent is significantly lower 30 lakh. The three efficient lighting options for potential industries. An annual budget
than the customer discount rate of about 25 (HPSV, electronic ballasts and compact of Rs 10 lakh has been provided for the
per cent. For the industrial customer, DSM/ fluorescents) have been clubbed together as feasibility studies and Rs 5 lakh for a two-
energy conservation schemes compete with a single cell could manage the efficient person cogeneration cell. The annual re-
investment in augmenting production for lighting programmes. For energy efficientcurring programme cost for cogeneration
their scarce capital resources. For a suc- motors, electric arc furnaces and efficient has been taken as Rs 15 lakh.
cessful programme, financial inceatives may lighting we consider the cost of a one- As shown in Figure 1, for each DSM
be necessary. They could involve: Iniitialperson department (full time) aud over-programme the market can be either the
capital subsidies; low interest credit heads and budget Rs 3 lakh annually for thereplacement market or the total market.
schemes; accelerated depreciation; tax re- programme recurring cost. For efficient The replacement market includes new units
bates; and so on. lighting the programme fixed costs are to be and the existing old units which are due for
shared equally between the three DSM light- replacement. In the total market, the entire
However, different types of financial in-
ing programmes. For good housekeeping market including new and existing units is
centives are nordiscussed here. It will be training seminars will have to be conducted the potential market. Figure 1 illustrates
assumed that, each of them cani be ex-
and publicity posters, pamphlets have to be the difference between the replacement and
pressed in terms of reduction in initial capi-
given to the user industries. For the waste thc total markets.
tal requirements, i e, initial capital subsidy.heat-driven vapour absorption refrigeration
In our analysis for the energy efficient
'Institutional mechanisms are also not dis-
systems (VARS) a number of feasibility motors programme we consider only re-
cussed here. Financial incentives can be
studies will have to be carried out. In both placement market because of the general
channelised through energy service com-
these cases we have taken the annual reluctance in changing already working mo-.
panies, state electricity boards, financial programme cost to be twice that of the tors for small efficiency gains. For elec-
institutions or energy development and
above programmos, i e, Rs 6 lakh. For tronic ballasts also we consider only the
management agencies at state level and at variable speed drives the emphasis has to be replacement market. For all the other DSM
centre. For each DSM option, an initial on.application engineering-i e, it is nec-es- programmes we consider the total market.
incentive has been proposed. It is proposed
s,ry to' identify potential candidates for After fixing the potential market size we
that a portion of the initial capital cost is to
variable speed drive applicatiops In indus- have to determine the long range market
be provided on a cost-sharing basis so that
try and work out the pay back periods. share of the DSM options.
the pay back period is less than two years. It
Hence the budget must provide for site There will be some who will not partici-
is difficult to determine precisely the extent visits by technical experts and feasibility
pate at any time because of a number of
of cost-sharing necessary. The values pro-
studies. For the VSD programme we have reasons. Therefore, we define an unwilling
posed in this paper are illustrative and could
considered an annual recurring programme percentage, i e, the proportion of the market
be modified, if necessary. The values used
cost of Rs 9 lakh. For the implementation which will not adopt the programme (even
here have been selected in a manner to make
of time of day tariffs an advisory cell will in the long run, viz, 20-year period). For the
the DSM option attractive to the customer.
have to be established to provide techlnical DSM options considered we-have taken an
In addition to cost sharing, programme
costs for publicity, generating awareness,
TABLE 1: PROGRAMME COSTS FOR DIFFERENT DSM PROGRAMMES
conducting feasibility studies and monitor-
ing the programme have been considered.
The total programme cost (PC) can be ex- DSM Option Initial Annual Extent of Capital Cost Sharing
Programme Recurring
pressed as
Set up Programme
PC-I+AT+aCN (1)
Cost Cost
where I is the initial programme set-up (Rs Lakh) (Rs Lakh)
Ccst, A is the annual recurring programme I A
cost (an escalation of 8 per cent per annum
is considered to account for iniflation) and T Energy efficient motors 20 3 5& per cent of incremental cost
is the duration of the programme in number Variable speed drives 20 9 25 per cent of capital and installation cost
of years. a is the proportion of the capital Good housekeeping 20 6 50 per cent of ihitial cost up to Rs I lakh
cost C to be shared by the implementing Waste heat VARS 20 6 30 per cent of initial capital cost
agency and N is the total number of adop-
Electric arc furnaces 20 3 25 per cent of initial capital cost
Time of day tariffs 30 9 Rs 90,000 industry cost of meter + 50 per
tions. Table 1 shows a break-up of the
cent of cost of demand controller
programme costs for the different DSM
Efficient lighting 20 3 HPSV-25 per cent of initial cost (balst)
programmes considered. Admittedly pres- Electronic ballast-S0 per cent of capital
ently one cannot estimate precisely costs cost
for running DSM programmes which re- CFL-50 per cent of initial cost of ballast
quire diverse activities such as publicity, Industrial cogeneration 20 15 25 per cent of initial capital cost.
training, equipment and monitoring. There-
fore, we have created several cost catego-
Notes: a Pr9gramme costs = I + AT + a CN ... (I)
ries. We have assigned different DSM
b As it is difficult to appreciate a full range of cost elements, we have assigned different
options to different cost categories based on
DSM measures to different cost categories in incremental values of Rs 300,000 per year.
our discussion with industries. The initial
This is a flat charge for servicing the programme over and above the initial set up cost
programme set-up cost. will involve thle for each programme and the capital cost of each measures in terms of equipment. (I - a)
costs of setting up a cell foreach programme CN will be borne by the consumers.

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 FIGURE 1: REPLACEMENT AND TOTAL MARKETh ure 3 shows an ovCerView of COMPASS.
Trhe pay back pcriod for the customer par-
ticipating the programme has been worked
out. Yearly targets of the number of physi-
cal units (bulbs, motors, etc), the demand
and energy savings have been obtained.
The break-up of new and existing equip-
ment has also been shown in each case.
New
Inl

RM DSM Programmes for the

Eighth Plan

Equipment Existing to be The following DSM programmes have

Stocken Replacd boen considered in the plan:
(a) Energy efficient motors: Electric
motors are used to drive pumps, fans, com-
TM
pressors, machine tools and a wide variety
of other process equipments. Elpctric mo-
tors account for 60-70 per cent of the
industrial electricity consumption. Im-
proved design and materials result in im-
proved motors known as energy efficient
motors (EEMs). Their efficiency is 3-5 per
Existing cent higher than the standard motor effi-
Surviving ciency. The data on motors has been ob-
tained from manufacturers. Annexure 1
shows the technology characteristics of stan-
dard and efficient motors. In our analysis,
we consider efficiencies of standard motors
of reputed manufacturers. The actual effi-
ciencies are likely to be lower as many
industries use motors supplied by small-
scale units. The annual energy requirement
of motors has been computed assuming
t=O Tine t=N fulJ-kWad operation for 4,000 hours. A peAk
Base Terminal coincidence factor of 80 per cent has been
Yejr RM - Replacement Market TM - Total Market ear asstned. The life of motors has been taken
as 15 years. The connected load for motors/
unwilling percentage ranging from 10-40 ycar of the plan (1997) are computed based fans/pumps in the. HT industries of
per cent depending on the nature of the on the number of net adoptions. The effect Maharashtra is 1,474 MW, for air compres-
DSMprogramme. The rate at which a DSM of transmission and distribution losses is sors is 271 MW and for refrigeration is 132
option attains its long-run market share is a considered to arrive at the actual savings inMW (IGIDR-HT Survey[61). The total
function of the pace at which information the system demand. The programme cost isconnected load for motors in HT industries
and subsequent actions about it diffuse in divided by the system demand reduction to in Maharashtra in 1989-90 was 1,877 MW
the market place. A modified version of the obtain the cost of saved demand (utility). (66 per cent of the total). The break-up of
Lawrence-Lawton diffusion curve[71 has (c) Cost ofsaveddenand(total resource): motors into different size ranges in
been used in the present analysis. Figure 2 In this case the gross participants costs areMaharashtra is assumed to be in the same
shows the diffusion curve for DSM options. considered. To this is added the programme proportion as obtained by Anand and
It is assumed that the long range market fixed cost. Yearly costs are discounted at aKothari[8] for all-India. The number of
share is attained at the end-of the 20 year discount rate of 14 per cent. The total cost motors in each category has been obtained
period. For the Eighth Five-Year plan at the of the DSM option is divided by the demand by taking 7 per cent annual growth rate
end of the plan period the percentage adopt- savings to obtain the cost of saved demand from the 1989-90 figures (see Annexure 2).
ing ranges between 20 and 30 per cent of the (total resource). There are approximately 2,70,000 motors
long-run market share depending on the (d) Cost of saved energy (CSE): The cost in the H T industries of Maharashtra. It is
DSM programme. The DSM options have of saved energy is the levelised average cost assumed that 20 per cent of the market
been analysed with respect to the of the DSM option per kWh saved. This is would be unwilling even in the long-term,
computed as follows: (say 20 years). 50 per cent of the incremen-
followin& criteria:
(a) Pay back period: The pay back period tal cost (difference in cost between EEM
DSM option cost x Capital
for the iridustrial customer has been com- and standard motor) is to be provided by the
puted for each DSM option. The pay back CSE (Rs/kWh)= recovery factor implementing agency. In the absence of a
period is calculated in the absence of a Annual Energy programme, the pay back period ranges
programme and with the DSM programme. from 1.1 year (I -5 hp) to 4.8 years (>50 hp).
savings (kWh) (2)
In all the DSM programmes the cost sharing With the programme the pay back period is
has been done with the objective of keeping halved and ranges from 0.5 years (1 -Shp) to
If an annual maintenance cost is involved
the pay back period less than two years. 2.4 years (>50 hp).
it is added in the numerator to the annualised
(b) Cost of sav(ed deimaznd (utility). The DSM option cost. T'able 2 shows the annual targets for the
programme cost in eachi year is discounted The comprehensive market planning and DSM programme on energy efficient mo-
at the utility discount rate (14 per cent) and analysis system (COMPASS) model devel- tors. (Target in year 1993 indicates target to
summcd up to obtain the total programme oped by Synergic Resources Corporation be achieved in the first year of the pl,an i e,
cost. The demand savings in the terminal (SRC) has been used for the analysis. Fig- 1993-94). It is seen that 9.3 MW of peak

Lconomic and Political Weekly August 7-14, 1993 1661

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 FIGUR E 2: TECHNOLOGY DIFFUSION CURVE and Rs 11,000 per installed kW in the
size raigc of 10-15 hp. For existing units an
100 additionial inistallationi cost of 10 per cent of
thie capital cost has been taken. The annual
maintenance cost hias been taken as 1 per
cent of thc capital cost. Twenty-five per
Per Cent Unwilling cent of thie initial cost of the variable speed
drive is to be borne by the implementing
agency. The pay-back period for new in-
80
stallations, in the absence of a programme,
ranges from 2.6-2.8 years. Tnhis decreases
to 2.0-2.1 year with the programmc. If the
installation cost is also considered forexist-
ing units, with the programme, the pay
back period ranges betweeni 2.2-2.3 years.
n 60 Tablc 3 shiows the annual DSM targets for
VSDs. It is seen that the peak demana
savings by adoptions of VSDs in the plan
period is 37.4 MW at a programme c6st of
40
Rs 38 crore. A total of about 6,700 variable
speed drives is adopted during the plan
0- period. The cost of demand saved for the
.utility is Rs 10,2001kW. The total cost of
demand savings is Rs 41,100/kW. The
energy savings due to VSDs in 1997 is 330
GWh and the cost of saved energy is 105 p1
kWh.
(c) Good housekeeping practices: Good
housekeeping requires training, monitoring
and management. On industrial premises,
20 good housekeeping on a sustained basis
would require monitoring and management..
Meters would be required to monitor major
0t I I I I / I I I loads. Good housekeeping would include
1993 1996 1998 2001 2003 2006 2008 2011 measures like reducing leakage of com-
Year pressed air, proper sizing of motors, im-
proved daylighting, reducing chilled water
demand can be saved by 1997 at a total savings of 30 per cent. We consider de usage, improved monitoring and control.
programme cost of Rs 8.3 crore. The cost mand savings of 25 per cent. A peak Above all, in case of industries it requires
is equivalent to a cost of Rs 9,000/kW coincidcnce factor of 80 per cent is assum- continuous supervisory, skilled manpower
ed. The capital cost (from manufacturers on a continuous basis which is expensive.
saved. The total cost of saved demand is Rs
17,600/kW. The cost of saved energy is 63 data) has been taken as Rs 9,500 per in- The maximum demand registered by the
,plkWh. A total of 28,700 energy efficient stalled kW in the higlier size range (>50 bp) H T industries (high tension industries) in
motors have to be installed during the plan
period. This is equivalent to about five
TABLE 2: ANNUAL DSM PROGRAMME TARGET FOR ENERGY EFFICIENT MoroRs
EEMs per industry. Of this 55 per cent
(15,800) will be new installations and 45
percent will be replacements of old existing Year Demand Energy Adoptions Existing Total Programme
Savings $avings by New Adoptions Adoptions Cost
motors.
(MW) (GWh) (No) (No) (No) (Rs Lakh)
(b) Variable speed drives: Flows driven
by pumps, fans and blowers are usually 1993 0.46 2.32 740 700 1440 69.6
regulated by throttling. This is an ineffi- 1994 1.47 7.34 1630 1480 3110 112.2
cient method of control and results in sig- 1995 3.13 15.65 2770 2370 5140 198.1
nificant energy losses. A more efficient 1996 5.64 28.21 4280 3490 7770 322.0
control method is to control the speed of the 1997 9.27 46.36 6330 4900 11230 500.4
motor using a variable speed drive (VSD). Total 9.27 99.88 15750 12940 28690 834.0*
Variable speed drives permit continuous
Note: * Discounted total programme cost.
regulation of motor speeds which can lead
to substantial electricity savings, particu-
larly, when there is partial load operation TABLE 3: ANNUAL DSM PROGRAMME TARGETS F
during a large proportion of the duty cycle.
Variable speed drives have significant scope Year Demand Energy Adoptions Existing Total Programme
in paper, chemicals, fertilisers, pharmaceu- Savings Savings by New Aioptions Adoptions Cost
ticals and cement industries. The life of (MW) (GWh) (No) (No) (No) (Rs Lakh)
variable speed drives has been taken as 10
years. In the present analysis we consider 1993 4.12 36.65 50 680 730 509.8
only motors in the size range above 10 hp 1994 9.26 82.41 160 760 920 651.7
which operate for 6,000 hours in a year. It 1995 15.91 141.65 310 880 1 190 901.2
1996 24.95 222.08 520 1090 1610 1309.8
is assumed that 25 per cent of all drives
1997 37.42 333.10 830 1380 2210 1938.8
above 10 hp will be eligible for variable
Total 37.42 815.89 1870 4790 6660 3806.90
speed drive applications. We conisider an
average loading of 90 pei cent and energy Note: * Discounted total programme eost.

1662 Economic and Political Weekly August 7-14, 1993

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 FIGURE 3: OVERVIEW OF COMPASS

Compass Compass Compass

Data Bases Programme Analysis Plan Analysis

Load RatesTechnology Load Load Plan

Shapes * Impactsp Shapes Impacts |Budget

Programme Plan
7~~~~~1~~~~ ~Design 7~ ~Design [ 1
Market Utility P-rogramme Market Rate Bill
Profits Data . _Costs Penetration Impact Impact

Technology Market B/C B/CF

Options [Ac I Analysis Ratios

Linkages to End-Use:foreoa
Analysis, and Resot5rce Planning Models

1989-90 was 2,266 MVA. Taking an aver- Table 4 shows the annual targets for this(d) Waste heat driven vapour absorption
age power factor of 0.9 and an annual DSM,pption. During the Eighth Plan period refrigeration systems (VARS): Conventional
growth rate of 7 per cent the maximum a demand saving of about 55.2 MW and vapour compression refrigeration systems
demand of the H T industries in 1992-93 is energy savings of 229 GWh can be made at account for almost the entire air-condition-
about 2,500 MW. It is difficult to quantify a programme cost of Rs 20.8 crore. The cost ing and cooling (refrigeration) load. Instead
is equivalent to a cost of saved demand (for of vapour compression refrigeration sys-
the contribution of the H T industries to the
peak demand of about 6,200 MW. Accord- the utility) of Rs 3,800/kW. If we include tems it is possible to use vapour absorption
ing to MSEB around 40-50 per pent of thisthe participant costs the total cost of saved refriger-ation systems (VARS) driven by
demand is fromh the H T industrial sector. demand is Rs 1 1,900/kW. The cost of saved waste heat or surplus steam. We consider
MSEB feels that 2,500 MW is a conserva- energy is 86 p/kWh. Twenty-seven per cent VARS based on Lithium. Bromide water
tivc estimate. There were 5,808 11 T indus- of the industries in 1997-98 adopt this DSM (absorbent-refrigerant) systems. From the
trial customers in 1991-92 and the energy programme. IGIDR-HT industry survey, the total con-
consumption by the H T industries was
TABLE 4: ANNUAL DSM PROGRAMME TARGETS FOR GOOD HOUSEKEEPING
9,684 GWh. In 1992-93 the number of H T
industries is taken as 6,200 with an annual
energy consumption of 10,360 GWh and Year Demand Energy No of Programme
Savings Savings Adoptions Cost
demand (during the peak period) of 2,500
MW. This is equivalent to an average
(MW) (GWh) (Rs Lakh)
energy consumption of 1,670,000 kWlh/ 1993 6.07 25.16 256 282.0
year and a peak demand of 400 kW. A DSM 1994 13.63 56.52 319 351.0
programme for improved housekeeping is 1995 23.49 97.41 416 492.2
assumed to save 5 per cent of the energy and 1996 36.82 152.65 562 715.5
power demand in the adopting industry. 1997 55.19 228.83 775 1062.5
For each adopting inidustry an initial amount Total 55.19 560.57 2328 2080.6*
of Rs 2 lakh is to be spent on additional Note: * Discounted total programme cost.
monitoring/testing equipment and energy
audits. Fifty per cent of the initial cost (Rs TABLE 5: ANNUAL DSM PROGRAMME TARGETS FOR WASTE HEAT DRIVEN VAPOUR
1 lakh) is to be given by the implementing ABSORPTION REFRIGERATION SYSTEMS
agency. It is assumed that the adopting
industry will incur an annual expenditure of
Year Demand Energy Adoptions Existing Total Programme
Rs 50,000 to maintain good housekeeping Savings Savings by New** Adoptions" Adoptions* Cost
practices. (It must be mentioned that these (MW) (GWh) (Rs Lakh)
figures are for the average HT industry with
a peak demand of 400 kW. For industries 1993 1.19 8.47 1 15 16 157.2
with different loads the amounts can be 1994 2.67 19.06 3 17 20 182.3
proportionately adjusted). 1995 4.67 33.35 7 20 27 260.7
The pay back period for the adopting 1996 7.41 52.94 12 25 37 380.7
1997 11.19 79.94 19 32 51 561.2
industry, in the absence of a programme, is
Total 11.19 193.76. 42 109 151 1187.0*
1.4 years. The pay back period reduces to
0.7 years with the goodl lhousekeeping Note: * Discounted total programme cost.
programme. ** Adoptions given in number of 100 TR units.

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 FIGURE 4: LoAI CURVE FOR A TYPICAL DAY FOR MSEB (30/4/92) and automation. A base unit of a furnace
with a throughput of 10 tonnes is consid-
6500 . ered. A retrofit cost of Rs 50 lakh/furnace
is taken and savings of 30 per cent are
assumed [5]. The maximum demand of the
mini-steel plants in the MSEB region added
up to 446 MVA in 1989-90. For ministeel
we take 70 per cent of this load for melting.
6000 - The results in a demand of 312 MVA for
melting in 1989-90 which is equivalent to a
demand of 382 MVA in 1992-93. The peak
Peak demand in electric arc furnaces is about 400
kVA/ton. This implies that there are about
96 ar, furnaces of throughput 10 Tin 1992-
5500- 93. We consider an average electricity
consumption of 800 kWh/t and a tap to tap
time of 200 minutes. For a 10 Tfurnace the
peak demand is 4 MVA. Considering a
Partial Peak
power factor of 0.9 we get a peak demand of
3.6 MW. A peak coincidence factor of 50
5000 - t per cent is assumed. For existing units an
additional retrofit cost of Rs 5 lakh/unit (10
per cent of the capital cost) is considered.
Eighty per cent of the electric arc furnaces
_ ,Off Peak
are eligible. Twenty per cent of the eligible
market is assumed to be unwilling. Twenty-
five per cent of the capital cost is to be borne
4500
by the implementing agency.
For new units the pay back period without
the programme is 0.7 years and with the
programme is 0.5 years. For existing units
the pay back period without the programme
is 0.8 years and with the programme 0.6
4n r- I p i v years.
0 4 8 12. 16 20 24
Table 6 shows the annual targets for the
Hour improved EAF programme. It is seen that
29 furnaces are retrofitted in the plan period
(of which eight are new units). The demand
nected cooling load in 1989-90 was 132 Table 4 shows the annual targets for this reduction by this DSM option in the plan
MW. TIhis amounts to a connected load DSM of option. During the Eighth Five-Year period is about 17.8 MW at a cost of Rs 3.6
162 MW in 1992-93 which is equivalent to Plan period a demand saving of about 11.2 crore. The cost of demand saved tQ the
1,62,000 TR (tonnes of refrigeration). Ab- MW can be made at a total cost of Rs 11.9 utility is Rs 2,000/kW. This is equivalent to
sorption chillers have potential applica- crore. The number of VARS systems in- a total cost of demand saving of Rs 7,500/
tions in chemicals, synthetics, pharmaceuti- stalled is about 150 (of 100 TR each). Ihe kW. Imnproved electric arc furnaces result
cals and food industries. It is assumed that cost of demand saved for the utility is Rs in energy savings of 95 GWh in the terminal
25 per cent of the cooling load is suitable for
10,600/kW. The totalcost of demand saved year of the plan and the cost of saved energy
VARS application. The chillers are as- is Rs 28,000/kW. The energy savings in the is 2Op/kWh.
sumed to operate for 5,000 hours/year and terminal year of the plan is 80 GWh and the (f) Time of day tariffs: There is a wide
have a peak coincidence factor of 70 per cost of saved energy is 64 p/kWh. variation in the MSEB system demand for
cent. The costs of the conventional system (e) Improved electric arc furnaces: In 24 hours. On a typical day (30/4/1992) the
and the VARS have been obtained as Rs Maharashtra the iron and steel sector is the load varied from 4,590-6,200 MW (Figure
12,000 and Rs 25,000 per tonne of refrigera- largest industrial consumer of electricity. 4). Tre peak occurs during 18 to 21 hours.
tion from manufacturers. The average This is mainly accounted for by steel found- The partial peak (or shoulder) region ex-
electricity consumption for a proccss chillerries and ministeel plants. Electric arc tends from seven- 18 hours and from 21-23
is about 1 kWh/TR while for a VARS it is furnaces (EAF) can be retrofitted with tech- hours. Off-peak duration is from 23 hiours
about 0.1 kWh/IR. The life of both systems nologies like scrap preheating, oxyfuel burn- to seven hours. If peaking plants are built,
is taken as 20 years and the maintenancce ers, bottom tapping, computerised control they remain idle for the remaining periods
costs of both systems are assumed to be the
same. For existing industries an additional
installation cost of 10 per cent has been TABLE 6: ANNUAL DSM PROGRAMME TARGETS FOR IMPROVED ELEcrRIC ARC FURNACES
considered. Thirty per cent of the initial
capital cost is to be provided by the imple- Year Demand Energy Adoptions Existing Total Programme
menting agency. For new installations the Savings Savings by New* Adoptions** Adoptions** Cost
pay back period without the programme is (MW) (GWh) (Rs Lakh)
1.3 years and with the programme is 0.6
1993 1.91 10.16 0 3 3 64.3
years. For existing installations when the
1994 3.81 20.33 0 3 3 47.8
entire cost of the system is an additional 1995 7.62 40.66 2 4 6 96W8
investment the pay back period without a 1996 11.44 60.99 2 4 6 104.6
programme is 2.7 years. This reduces to 1.9 1997 17.78 94.87. 4 6 10 184.3
years with the programme. Twenty percent Total 17.78 227.01 8 21 29 360.4*
of the eligible market is assumed to be
Note: * Discounted total programme cost.
unwilling.
Adoptions given in number of furnaces of throughput

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and do not earn return during these hours. Table 7 shows the annual targets for the It is assumed that 80 per cent of the
hIence, reducing the peak load is important time of day tariff programme. It is seen that
market is eligible for HPSV (in some cases
from MSEB's point of view. This could bc this can result in 110.4 MW of demand the poor colour rendering ability may rule
done by shifting some of the peak load to savings in the plan period at a total out HPSV). In the absence of a programme
other periods. Load levelling would result programme cost of Rs 19.0 crore. This is there is a significant adoption of HPSV
in improved capacity utilisation. Load lev- equivalent to a cost of saved demand for lamps by the market. We assume that lOper
elling or peak shifting could be promoted the utility of Rs 1,700/kW. The total cost cent of the market is unwilling in both the
by the use of tariff-related options like timeof saved demand is Rs 2,1001kW. In our programme and no programme cases. In
of use tariffs. analysis only 27 per cent of the ffe indus-the programme 25 per cent of the cost of the
This DSM option is different from the tries adopt the measure in the Eighth Plan ballast will be borne by the implementing
other options at it involves a differential period. We consider a 10 per cent saving inagency. In the no programme case we
tariff structure. Instead of a flat energy peak demand only for these industries. It assume that the long run market share will
charge of Rs 2/kWh (MSEB tariff for HT must be emphasised here that this is an be 80 per cent of the eligible market. In this
industries) the proposed energy charges illustrative exercise. A detailed study willDSM programme we have to consider the
are Rs 3/kWh during peak time, Rs 2/kWh be required to assess the appropriate tariff freeriders' effect, i e, industries who would
during partial peak and Rs 1.50/kWh dur- structure and to predict the likely peak have opted for HPSV any way will also put
ing off peak time. The demand charge shifting impact. claims on funds from the programme. The
remains constant at Rs 1 00/kW. While Rs (g) Replacement of 250 W high pressure number of net adoptions (excluding the free
3/kWh at peak t-imes may be approxi- mercury vapour (HPMV) lamps by high riders) is used to calculate the savings. The
mately the long range marginal cost. Rs pressure sodium vapour (HPSV) lamps: A programme cost includes the subsidy given
1.50/kWh at off-peak times covers much 250 W HPMV lamp has the same lumen to the free riders. This increases the cost of
more than the operating costs (could be output as a 150 W HPSV lamp (13,500 this DSM option.
further lowered). In case of no action, lumens). Mercury vapour and sodium Table 8 shows the annual targets for this
proposed structure is revenue neutral to vapour lamps can be used for lighting in-DSM programme. It is seen that there is a
customers in case of continuous loads. It is dustrial shop floors or for street lighting. net demand saving of 1.4 MW at a
revenue enhancing for the utility for thoseThe HPMV lamp has a power consumption programme cost of Rs 0.9 crore. The num-
who have two shifts. Many other price of 272 W, a life of 5,000 hours and a cost of ber of net adoptions in the programme is
structures are possible. To illustrate the Rs 500. The HPSV lamp has a power 36,000 ballasts out of gross adoptions of
benefits of time of day tariffs, we consider consumption of 172 W, a life of 15,000 54,000 ballasts. The cost of saved demand
the above tariff structure. hours and a cost of Rs 930. The life of for the utility is Rs 6,500/kW. The total cost
It is assumed that an initial subsidy ballast (control gear) is taken as 10 years of saved demand is Rs 9,700/kW. Due to
of Rs 90,000 will be paid by the imple- and the cost of the ballast for HPMV is the difference in the lives of the bulbs (a
menting agency to the adopting industrial taken as Rs 675 and for HPSV as Rs 600. A single bulb HPSV has a life equivalent to
unit to cover the costs of a time of use meter peak coincidence factor of 80 per cent and three HPMV bulbs) over the life of a ballast
(Rs 70,000) and 50 per cent of the cost of 4,000a hours of operation is assumed. The the difference is the annual cost (bulb re--
demand controller (Rs 20,000). Miller total lighting connected load from the placement) pays for the initial cost of switch-
et al[9] in their study of Pakistan estimate IGIDR-HT survey was 111 MW in 1989- ing to HPSV. Hlence, there is no net initial
that a demand controller can reduce peak 90. The connected load in 1992-93 is cost of energy when taken over the life time
load between 10 and 20 per cept with dis- obtained as 136 MW. Of this 13.6 per cent of the HPSV ballast. The cost of saved
ruption of production. Miller et al consider accounts for HPMV and 9.1 per cent HPSV energy is 10 pfkWh.
a 15 per cent peak reduction in their analysis (Nadel and Kothari). [5].The total market (h) is Replacement of magnetic ballasts by
of load management in Pakistan. We con- 157,000 lamps of which the current market electronic ballasts: Fluorescent tubes are
sider a 10 per cent peak demand reduction share of HPSV lamps is 53 per cent. widely used in industrial offices and often
for the adopting industrial units which may
be only 20-30 per cent of the total users. TABLE 7: ANNUAL DSM PROGRAMME TARGETS FOR TIME OF DAY TARIFFS
Shifting 10 per cent of the peak demand to
off-peak results in an average annual bill
Year Demand Energy Total Programme
saving of Rs 86,000 for the adopting indus-
Savings Savings Adoptions Cost
try. Even if the industry were to bear the (MW) (GWh) No (Rs Lakh)
total cost of the time of day meter and the
demand controller the pay back period would 1993 12.14 - 256 269.4
be 1.3 years. The pay back period with the 1994 27.26 - 319 319.8
programme is 0.2 years. 1995 46.99 - 416 447.2
A cell in MSEB will have to be set up to 1996 73.63 - 562 648.5
co-ordinate the time of day tariff imple- 1997 110.37 - 775 961.2
Total 110.37 - 2328 1900.8*
mentation. Brochures and pamphlets will
have to be distributed to the target group in Note: * Discounted total programme cost.
order to create awareness of the new tariff
structure and the benefits of load shifting. TABLE 8: ANNUAL DSM PROGRAMME TARGETS FOR REPLACING HPMV BY HPSV
This cell will also conduct workshops on
load management and provide on-site guid- Year Demand Energy Adoptions Existing Total Net Programme
ance and advice to participating industries. Savings Savings by New Adoptions Adoptions Adoptions Cost
The cost of setting up this cell is taken as Rs (MW) (GWh) (No) (No) (No) (No) (Rs Lakh)
30 lakh. This cost will include the cost of
preparing manuals for use of demand con- 1993 0.32 1.62 610 8720 9330 3450 23.4
trollers and planning load shifting. Ap- 1994 0.62 3.12 1590 6570 8160 3180 15.9
1995 0.93 4.67 2940 7890 10830 3290 22.5
proximate load shifting measures for dif-
1996 1.22 6.09 4440 8400 12840 3010 28.6
fercnt industrial sectors will be identified
1997 1.44 7.20 5660 7600 13260 2350 31.7
by this cell. The annual cost for operating
Total 1.44 22.70 15240 39180 54420 36430 92.7
and monitoring this programme has been
taken as Rs 9 lakh. Note: Discounted total programme cost.

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 FIGURE 5: LEAST Cosr (UTILITY) CURVE FOR DSM IN MAHARASHTRA fluorescenits are now availahle in the cou
try. An incan'cdescent lamp with a rating
15000 2 60W has an output of 700 lumens, a life of
1,000 hours and is priced at Rs 9.60. A 11W
compact fluorescent has an output of 900
lumens, a life of 8,000 hours and is priced at
Rs 200. The auxiliary consumption of the
ballast is 3 W. The cost of the ballast is Rs
150 and the life of the ballpst is 10 years.
The pay back period without the programme
is one year. With the programme this
reduces to 0.8 years. A DSM programme,
0
for replacement of 60W incandescents by
u
11W compact fluorescents is considered.
According to Nadel and Kothari 3.5 percent
5000
of the industrial lighting is incandescents.
From the HT survey figures we arrive at a
connected load of 4.6 MW. Hence the total
3
market is 77,000 lamps (of 60W each). A
peak coincidence factor of 60 per cent is
J_~~~~~~2 assumed and the number of operating hours
is 3,000/year. Fifty per cent of the 'capital
cost of the compact fluorescent ballast is to
0 25 50 73 100 125 150 175 200- 225 250
be given as subsidy by the inmplementing
Demand Savings (MW)
agency. It is assumed that 20 per cent of
the eligible market is unwilling.
I Time of Day Thriffs-; 2 Improved Electric Arc Furnaces; 3 Compact Fluorescents; 4 Good
Table 10 shows the annual targets for the
Housekeeping; S HPMV by HPSV; 6 Enery Efficient Motors; 7 Variable Speed Drives; 8 Waste
compact fluorescent programme. It is seen
Heat VARS; 9 Magnetic by Electronic Ballasts.
that the demand savings in tlhe plan period
* This option is considered at tariffs of Rs 3/kWh for peak, Rs 1.50/kWh off-peak andisRs about 1.1 MW at a programme cost of Rs
2/kWh
for partial peak. Other options are at current MSEB tariffs. 0.3 crore. This is equivalent to a cost of Rs
2,900/kW saved for the utility. The total
cost of saved demand, including the partici-
in shopfloors. In textiles a large number of crore. A total of 2.6 lakh electronic bal- pant costs, is Rs 6,300/kW. The energy
fluorescent tubes are used on the shopfloor.lasts will be required during the Eiglhth saving in 1997 is 5 GWh and the cost of
Each tubelight fixture has a ballast whichPlan period. This is cquivalent to about 40 saved energy is 61 p/kWh. The total num-
provides a high voltage to initiate the dis- ballasts/industry. The cost of saved de- ber of adoptions of compact fluorescents is
charge and then limits the current. For ourmand for the utility is Rs 12,000/kW. The 29,000. The total number of CFL bulbs
analysis, we consider a fixture for a single total cost of saved demand, -when the par- bought during the plan period is 41,000.
tube (each of 40W rating). A conventional ticipants cost is included, is Rs 24,300/kW. (j) Industrial Cogeneration: It is possible
magnetic ballast for this fixture consumes The energy savings in the terminal year of to effectively utilise the steam base in in-
about 12W. Instead of a magnetic ballast, the Plan is about 10 GWh and the cost of dustry to generate power in cogeneration
it is possible to opt for an clectronic ballast saved energy is 100 p/kWh. schemes. Cqgeneration implies the sithul-
which draws only 1-3W. For our analysis (i) Replacement of incandescents by coin- taneous generation of power and steam.
we take an electronic ballast power con- pactfluorescent lamps: Incandescent lamps Cogeneration is thought to be a supply
sumption of 3W, a life of 15 ypars, 3,500 are commonly used in domestic and com- option by some and a demand option by
hours per year operation and a 80 per cent mercial sectors. Though incandescents ac- others. Cogeneration schemes have poten-
peak coincidence. The cost of magnetic count for only about 4 per cent of the tial in textiles, paper, cement, fertilisers,
ballast is Rs 140 and of electronic ballast is industrial lighting, it may be worthwhile sugar,to chemicals and plarmaceutical in-
Rs 375. According toNadel and Kothari[5] opt for replacing them by compact dustries. A Haigler Bailey study[8] esti-
73.9 per cent of the industrial lighting loadfluorescents in view of energy savings to mated an economic potential of 880 MW
is accounted for by fluorescents. the extent of 75 per cent. New compact for topping cycles in Maharashtra till 1996.
Fluorescents in the HT industry would ac- fluorescent lamps last about eight to ten Annexure X shows the break-up of the co-
count for 100.4 MW of connected load times longer than incandescents and are generation potential by different industry
(from the [IT industry figures). This im-- four times as efficacious. Compact sectors. MSEB estimates that 330 MW of
plies a total market size of 2,15,000 fluores-
cent tubes (of 40W each). We consider only TABLE 9: ANNUAL DSM PROGRAMME TARGETS FOR REPLACING MAGNETIC BALLASTS
the replacement market as industries are By ELECTRONIc BALLASTS
likely to opt for an electronic ballast only
when ballast replacement is due. Fifty per Year Demand Energy Adoptions Existing Total Programme
cent of the incremental cost of the elec- Savings Savings by New Adoptions Adoptions Cost
tronic ballast is to be provided by the imple- (MW) (GWh) (No) (No) (No) (Rs Lakh)
menting agency. It is assumed that 20 per
cent of the market is unwilling. 1993 0.11 0.49 6800 6500 13300 23.2
The pay back period without the 1994 0.35 1.55 15100 13500 28500 37.4
1995 0.76 3.30 25500 22000 47500 66.2
programme is 3.2 years and with the
1996 1.36 5.94 39500 32200 71700 107.3
programme is 1.6 years. Table 9 shows the
1997 2.24 9.77 58300 45200 103500 166.9
annual targets for the electronic ballast
Total 2.24 21.05 145100 119400 264500 278.1
programme. It is seen that 2.2 MW of
demand saving is possible with this DSM
option at a programme cost of Rs. 2.8 Note: Discounted total programme cost.

1666 Economic and Political Weekly August 7-14, 1993

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 FIGURE 6: LEAST CosT (TorAL) CURVE FOR DSM IN MAHARASHTRA day tariffs) to Rs 12,400/kW (electronic
ballasts). For. all the measures considered
the capital outlay required by the utility is
40000 - 9 less than that for augmenting supply (by
building central power plants), which typi-
cally cost between Rs 30,000-40,000 /kW.
When the participant costs are included
the total cost of saved demand ranges be-
twcen Rs 2,100 /kW (time of day tariff) to
Rs4l,10()kW (variable speed drives). The
total cost of saved demand for Plan I is Rs
12,700/kW. The energy savings by Plan I in
1997-is 805 GWh. The average cost of
; 20000
0 saved energy is 82 p/kWh. The short run
6 marginal cost of electricity generated by the
state electricity boards in India is about 90-
130 p/kWh while the long run marginal cost
5 ranges between 177-202 p/kWh. (Tfiese
values have been quoted by Nadel and
_ 1 ~~~~~~~~~~~~~3 Kothari. Actual values are likely to be
_ ~~~~~~~~~~~2
0~~~~~~~~~~~~~ higher -as these costs are prior to rupee
devaluation). The cost of saved energy
rangesl%etween -lOp/kWh (HPSV) to 105p/
0 25 50 75 100 125 150 175 200 225 250
WIWh (variable speed-drives). It is evident
Demand Savings (MW) that the cost of saved energy is less than the
sort run marginal cost of electricity gen-
eration. Though variable speed drives are
I Time of Day briffs*; 2 Compact Fluorescents; 3 Improved Elctric Arc Furnaces; 4 HPMV
by HPSV; 5 Good Housekeeping; 6 Energy Efricient Motors; 7 Magnetic by Electronic Ballasts; sliglhtly costlier from the total resourcc
8 Waste Heat VARS; 9 Variable Speed Drives. point of view its cost of saved energy is
much less than the long run cost of energy
* This option,is considered at tariffs of Rs 3/kWh for peak, Rs 1.50/kWh off-peak and Rs generation.
2/kWh In our analysis, we have not
for partial peak. Other options are at current MSEB tariffs. considered the capacity utilisation factor
for conventional power plpnts. If an aver-
net surplus power generation is possible the cost of saved demand is Rs 19,100/kW. age capacity utilisation of 60 per cent is
from the existing sugar factories alone inThe total installed MW is 281 MW while considered the total cost of saved demnand
Maharashtra in addition to meeting their the net adoptions is 206 MW installed. The for the costliest DSM option, viz, variable
own consumption of 24MW. If we add this installed MW added each year increases speed drives is Rs 24,700/kW which is less
to the 1laigler Bailley estimate we obtain from 31 MW in the first year to 94 MW in than the capital cost for conventional power
1,235 MW or49 per cent of the H T industrythe terminal year of the plan. The cost of plants.
peak demand. We take a conservative saved energy is 76 p/kWh. Figure 5 shows Plan I schematically witl
estimate of 30 per cent of the peak demand the cost (Rs /kW) plotted against the de-
of the 1- T industries which results in anl IV mand savings (MW). Figure 6 shows the
existing potential of 750 MW. The initial DSM Plan least cost curve from the total resource
capital cost for a, topping cycle cogenera- perspective (i e, the total -cost of saved
tion system is taken as Rs 17,500/kW in- The cumulative.sum of the DSM demand against the demand savings (MW)).
stalled and the variable cost of electricity programmes discussed earlier constitutes Figurea7 shows the cost of saved energy (p/
generation is taken as 40p/kWh. For cogen- DSM plan. Table 12 shows the DSM pro- kWh) plotted againist the energy savings
eration in existing uniits an additional in- grammes arranged according to the cost (GWh)of in 1997. Figure 8 shows the contri-
stallation cost of 10 per cent of the capital saved demand for the utility. We have ag- to demand savings, energy savings
bution
costis taken. In the absence of a programme gregated the programmes without cogen- and programme costs for the DSM options
we assume that only about 40 per cent of the eration (Plan I) and with cogeneration in (Plan
Plan I.
cogeneration potential will be realised in H). Plan I tesults in a demand saving of When246 cogeneration is also considered,
the long run. In the programme 25 per cent MW at a cost of Rs 106 crore. The average the demand saving in Plan II is 488 MW at
of the capital cost for the cogeneration cost for the utility is equivalent to Rs 4,300/
a cost (to the utility) of Rs 222 crore. The
system is to be borne by the implementingkW. The cost of saved demand for the cost of saved demand to the utility, is Rs
agency. Apeakcoincidence factorof 80 per ,utility ranges from Rs 1,700 /kW (time of 4,500/kW. When the participanit costs are
cent is considered, an average loading of 80
per cent and an availability of 80 per cent is TABLE 10: ANNUAL DSM PROGRAMME TARGETS FOR REPLACEMENT OF INCANDESCENT S
taken. In the absence of a programme the BY COMPACT FLUORESCENTS
pay back period for existing industries is
1.9 years and 1.7 years for new industries. Year Demand Energy Adoptions Existing Total Programme
TIhe pay back period reduces to 1.4 years for Savings Savings by New Adoptions Adoptions Cost
existing industries and 1.3 years for new (MW) (GWh) (No) (No) (No) (Rs Lakh)
installations with the programme.
Table 11 shows the annual targets for 1993 0.12 0.52 210 2980 3190 10.0
industrial cogeneration programme. The 1994 0.26 1.16 690 3280 3970 4.3
net demand savings in the terminal year is 1995 0.45 2.00 1340 3820 5160 5.7
242.3 MW at a programme cost of Rs 116.2 1996 0.70 3.14 2260 4730 6990 7'9
1997 1.05 4.70 3620 6020 9640 11.2
crore. Ihis is equivalent to a cost of saved
Total 1.05 11.52 8120 20830 28950 30.1*
demand for the utility of Rs 4,800/kW.
When the participant costs are considered Note: * Discounted total programme cost.

Economic and Political Weekly August 7-14, 1993 1667

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 FIGURE 7: LEAST COST ENERGY CURVE FOR DSM IN MAHARASHTRA should be also encouraged to consult manu-
als for efficient technologies, so that they
make the right clhoice. Our survey also
120-
indicates a large potenlial for savings from
effi'cient plant lay-out and design, which are
not quantified here.
100 8 (d) DemonstrationProgrammes: Itis nec-
7
essary to have controlled and well moni-
tored demonstration programmes for each
80 6 of the DSM options which clearly illustrate
the benefits of the DSM technology. These
progtammes will result in increased accep-
60 34 5
tance of the DSM technology. Prospective
customers are most likely to adopt the DSM
technology when they have seen a working
40-
model which clearly shows the benefits.
20
TABLE 13: PHYSICAL TARGETS FOR
20
DSM EIGHTH- PLAN

DSM Option Target

Energy Efficient
'Motors 28,700 nos
Variable Speed Drives 6,700 nos
-20 I T I I I I I I 1 I I I I' X I r ' I ' ' ' ' Waste Heat VARS 150 (100 TR
0 100 200 300 400 500 600 700 800
machines)
Energ.Savings (GWh) in 1997
Improved EAF 29 furnaces (of
throughput 10 T
each)
I HPMV by HPSV; 2 Improved Electric Arc
HPSV 54,400 fixtures
Furnaces; 3
Efficient Mowus S nte Heat VARS; 6 Good Housekeeping; gross
8 Variable Speed Drives.
Electronic ballasts 2,64,500 nos
considered the total tion cost
will be theof savedIt demand
new industries. will beCompact Fluorescents
in 29,000 frixtures
Plan Ll is Rs 15,900/kW. The energy sav- worthlwhule to fix norms for new industries. Industrial cogeneration
ings in Plan IH is 2,160 GWh and the cost of Before providing a licence/conniection to a (installed capacity) .280 MW gross
Good housekeeping/ 2,330 industrial
saved energy is 78 p/kWh. Table 13 shows new industry the energy plan of the new unit
time of day tariffs units
the physical targets to be achieved during should be examined and approved. They
the Eighth Five-Year Plan period.
TABLE 11: ANNUAL DSM PROGRAMME TARGETS FOR COGENERATION
V
Policy Recommendations Year Demand Energy Adoptions Existing Total Net Programme
Savings Savings by New Adoptions Adoptions Adoptions Cost
(a) DSM Plan-mandaloid for SEBs: We (MW) (GWh) (MW) (MW) (MW) (MW) (Rs Lakh)
have shown that a number ot DSM mea-
sures are considerably cheaper than build- 1993 33.14 185.80 1.9 28.8 30.7 28.2 1510.2
ing new power plants. Contribution of 1994 71.83 402.70 6.8 32.0 38.8 32.9 1983.0
DSM measures will only be sufficient to
1995 118.06 661.87 12.9 37.1 50.0 39.3 2774.0
1996 174.10 976.05 22.0 46.1 68.1 47.6 -4024.1
offset some of the additional supply re-
1997 242.27 1358.02 35.1 58.5 93.6 57.94 5938.5
quirements but they could significantly re-
Total 242.27 3584.44 78.7 202.5 281.2 205.9 11616.30
duce the additional investment required for
the power sector. Possibilities for DSM Note: I Discounted. total programme .cost.
need to be examined for every state and
TABLE 12: EIGHTH.FIVE-YEAR PLAN-DSM FOR MAHARASHTRA: S
DSM needs to be integrated into the power
planning process. It should be mandatory
DSM option Demand Energy Pro- Utility CSE RS/kiWh
for every SEB to formulate an energy- Savings Savings in gramme Rs/kW p/kWh Total
efficiency and DSM Plan before requesting (MW) 1997 Cost Resource
allocations for new power plants. (GWh) (Rs Crore)
(b) Database: It is necessary to establish
a comprehensive database or manuals re- Time of day tariffs 110.4 - 19.0 1700 - 2100
garding efficient energy utilisation equip- Improved electric arc furnaces 17.8 94.9 3.6 2000 20 7500
ment and practices. New industries and Replace incandescents

industries which opt for expansion can by compact fluorescents 1.1 4.7 0.3 2900 61 6300
screen the available options from a range of Gqod housekeeping 55.2 228.8 20.8 3800 86 11900
options before deciding on new equipment/ Replace HPMV by HPSV 1.4 7.2 0.9 6500 10 9700
Energy efficient motors 9.3 46.4 8.3 9000 63 17600
technology.
Variable speed drives 37.4 333.1 38.1 10200 105 41100
(c) Newv Industries: The current approaclh Waste heat driven vapour
is to contact existing industries for energy absorption refrigeration
audits and try to improve existing plant systems 11.2 79.1 11.9 10600 64 28000
efficiencies. However, our study points to Replace magnetic ballast
the need to concentrate on new industries/ by electronic ballast 2.2 9.8 2.8 12400 100 24300
new equipment. Over a 20-year period, Plan 1 246.0 804.8 105.7 4300 82 12700
with the industrial growth rate considered,Industrial Cogeneration 242.3 1358.0 116.2 4800 76 19100
the major contributor to energy consump- Plan II 488.3 2162.8 221.9 4500 78 15900

1668 Economic and Political ly August 7-14, 1993

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 FIGURE 8: DEMAND, ENERGY SAVINGS AND PROGRAMME COSTS FOR DSM OPrIONS
246 MW 805GWh Rs 106 CrOre
100
... i i.i.. . ... ......\x \\N .

90-

80 - Time of Day Tariffs

70 -jfJ fJjJImproved Electric Arc Furnaces

501 E@//X/~~~~~~~I,X
g]l0 1 < ~~~~~~~~~~~HPMV
L IIa by HPSV
XS dO |7~' E 0 0 0 gCompact Fluorescents
60-

Good Housekeeping
50 'I

/7/4/0]? 1 ,~ Energy Efficient Motors

K"~~~~~~~~~~~~R
3030 -~~~~
'7/~~~~~~~~~~ Variable Speed Drives

20 / ,( ~~~~~~~~~~~~~~~~~Waste Heat VARS

ON/ //////1 9\'gXXMagnetic by Electronic Balla
10 '<, //

0',

Demand Savings Energy Savings Progranme Cost

* Thioption is ued at tarffs of Rs 3/kWh for pikR 1R 0/Wh'WUpk-Ad Rs 2/k
Jo

(e) Implementation/Monitoring: tions. Norms for different products should motors (9 MW). EfficientDemand
lighting tech-
side management be drawn up andprogrammes
testing of energy effi- nologies result inneed
a total saving of to
4.7 MW. hav
an effective ciency agency of electrical equipment
for should be The cost for the utility varies from Rs 1,700/
implementation a
monitoring. It is recommended that the mandatory before granting the ISI certifi- kW for time of day tariffs to Rs 12,400/kW
responsibility for managing DSM should cate. Data on the efficiency of the equip- for electronic ballasts. Conventional cen-
be clearly entrusted to a specific agency, bement should be included in the product tral power plants cost Rs 30,000/kW for a
it the utility or energy service, companies nameplate. gas turbine plan and Rs 40,000/kW for a
(ESCOs) or state government agencies such thermal power plant (land costs have been
as energy development agencies or central included and interest during construction
government agency. For each DSM option, VI has been capitalised). The expenditure for
a small cell/department will be necessary to Conclusions Plan I is Rs 106 crore which is equivalent to
initiate the programme, generate aware- a cost of saved demand for the utility of Rs
ness, focus on the appropriate target group This is perhaps the first comprehensive 4,300/kW. Industrial cogeneration accounts
and monitor the programme. Approximate DSM plan worked out for a State in India. for a saving of 242 MW which is almost
costs for setting up and monitoring the While energy supply planning in fndia is equal to the savings achieved through the
programme have been included in the analy- done with a reasonable degree of articula- Plan I options. When cogeneration is in-
sis. tion, no satisfactory approach to formulat- cluded the demand saving in Plan II is 488
ing a DSM plan exists. While individual MW at a cost of Rs 222 crore. The energy
(f) Tariffstructure: The fluctuation in the
details may undergo further refinements, savings in 1997 in Plan II is 2,160 GWh and
daily load curve emphasises the importance
our endeavour is to generate a debate and to the cost of saved energy is 78 p/kWh which
of load flattening. This can be achieved by
formulate a DSM plan that is implementable is less than the short run marginal cost of
imposing an appropriate tariff structure.
and has specific annual (and later monthly) electricity. This is to be compared with the
Alongwith the reduced energy charges for
targets. This DSM plan is for the HT current MSEB peak demand of about 6,000
off peak periods increased rates for peak
industries in Maharashtra (Eiglhth Five-Ycar MW.
periods are necessary to create sufficient
Plan). The end-use data has been obtained Since customer interest rates are 25 per
margins for load shifting. The tariffs need
from the IGIDR-HT industry survey. Ten cent and above and utility interest rates can
to deal with at least eight hours duration
different DSM options lhave been examined be lower (around. 14 per cent) due to the
offpeak and not more than four hours of and the diffusions of the DSM technology availability of soft loans, it is necessary to
peak period. What is needed is a policy for
into the market has been simulated. offer an appropriate financial package along
energy rather than demand charge. Only a
Programme costs for monitoring and imple- with every DSM option. Even after consid-
'clearly indicated long-term policy will bring
menting the programme have been consid- ering the financial package, the cost of
the desired changes. A detailed study of a
ered. Annual targets have been chalked out saved demand is much lower than that of
sample of industrial units should be carried
for each of the options. It is seen that Plan augmenting supply in centralised power
out to decide on the appropriate tariff struc-
I has a demand saving of 246 MW at a cost plants. It is seen that the pricing option like
ture and assess the likely peak shifting of Rs 106 crore. The major contributors to time-of-use tariffs, is a major DSM option.
impacts.
the demand savings are time of day tariffs It is necessary to have a detailed study of
(g) Testing facilities and standards: It is (110 MW), good housekeeping (55 MW), different time-of-use tariffs and their likely
essential to incorporate data on the maxi- variable speed drives (37 MW), waste heat peak saving impacts. The results presented
mum energy consumption for equipmentVARS (11 MW), retrofitting electric arc in this paper are the preliminary findings of
like motors, fans, blowers, in the specifica-furnaces (18 MW) and energy efficient the IGIDR-EMCAT study. Our forthcom-

Economic and Polidi-al Weekly August 7-14, 1993 1669

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 ANNEXURE 1: TECHNOLOGY CHARACTER ISrICS OF MOTRS conservation can refer to any ncasure which
reduces wastage of energy. This could
Range Typical STD Motor EEM Effi- Cost of Cost of include maniagerial (options and behavioural
Rating Efficiency I ciency' Standard EEM changes in addition to technological op-
hp (Per Cent) (Per Ccnt) Motor (Rs)4 tions.
(R.3 Energy service company: A companly which
performs energy conservation as a turinkey
1-5 3.0 79.7 86.8 7,500 9,750
job on a contract basis.
5-10 7.5 84.4 88.6 13,300 17,290
10-15 12.5 87.3 91.0 24,100 31,330 [The authors would like to thank B Sudhakar
15-20 17.5 88.4 92.0 28,500 37,050 Reddy for hi s help. The authors are grateful to
20-50 35.0 90.6 92.0 56,200 73,060 SRC for their inputs in the compass model and
>50 100.0 93.0 94.5 187,100 243,230 would like to place on record their gratitude to
IDBI/USAID and MSEB for sponsoring this
I Standard motor efficiencies have been project. The authors would
taken as like the
to thankDevki
avera
Devki R and D, NPC and equipment manufacturers for that size range. R and D fortheirinputs and Gautam Dutt for his
2 The efficiency of EEMs is taken as the highest efficienc of the avilable EEM for that sizecomments
rane. on a draft version of the paper.
3 Prices have been obtained from a manutactirer's price list (effective from 24/8/1992) and Thanks are due to Jayshree Borkar and Mahesh
are for totally enclosed fan ventilated motors (C type) for 1500 rpm spe"d. The prices are Mohan for typing the manus-cipt].
inclusive of excise duty.
4 The price of EEMs is taken as 30 per cent higher than standard motors (as per discussions Reference
with manufacturers). [I] Eighth Five Year Plani 1992-97 (1992),
Government of India, Ptanning Commis-
ANNEXURE 2: No OF MOTORS IN EACH CATEGORY FOR HT INDUSTkIES IN MAHARASHTRA
sion, New Delhi.
12] A K N Reddy, ( D Sumithra, P Balacha-
Range 1-S hp 5-10 hp 10-15 hp 15-20 hp 20-50 hp >50 hp Total tndra, A D'sa (1991): 'A Development
Focused EndUse OrientedElectricity Sce-
Per cent of motor nario for Karnataka' (Part I), Ecotnomic
connected load 15.3 10.8 11.1 9.9 13.8 39.1 100.0 and Political Weekly, Vol XXVI, No 14,
Connected MW April 6, pp 891-910.
1989-90 287.2 202.7 208.3 185.8 259.0 733.9 1877.0 [3] A K N Reddy, G D Sumithra, P Balacha-
'OOOs units 1989-90 128.3 36.2 22.3 14.2 9.9 9.8 220.7 ndra, A D'sa,(1991): 'A Development
'000s units 1992-93 157.2 44.3 29.3 17.4 12.1 12.0 272.3 Focused End Use Oriented Electricity Sce-
nario for Karnataka (Part II), Economic
ANNEXURE 3: EcoNoMic 'OTENTIAL FOR and Political Weekly, Vol XXVI, No 15,
INDUSTRIAL TOPPING COGENERATION It is essential thiat a DSM plan be imple- April 13, pp 983-1001.
SYSIEMS IN MAHARASHTRA (1986-1996) mented initially in the state of Maharashtra [4] J Parikh (1991): 'From Defendus to Con-
and its results closely monitored. This will sensus', Economic and Political Weekly,
Industry Potential (MW) form the basis for launching a meaningful June 22, pp 1566-1568.
national DSM plan and for integrating DSM [5] S Nadel, V Kothari, S Gopinath,(1991):
lTxtile 36 planning into the electricity planning frame- Opportt uitiesforInp rovin1g Etnl-ise Elec-
Rayon 31 work. tricity Efficiency in India, prepared for
Pulp and Paper 36 Glossary World Bank and USAID, November.
Refineries 148 [6] J Parikh, S Modak, S G Deshmukh, C B
Frtiliser 279 Kagalkar (1991): 'IGIDR-HT Industries
DSM: Demand side management-involves
Basic Chemicals 157 Survey in Maharashtra', Discussion Pa-
co-operative action by the utility and cus-
Dyes 58 per No 43, January, Indira Gandhi Insti-
tomers to aclhieve customer load modifica-
Food 29 tute of Developmnent Research (IGIDR),
tions in a manner that results in net benefits
Pharmaceutical 53 Bombay also in 'Electricity Consumption
to the customers, utility and society.?n case
Iyft 13 by HT Industries: A case of Maharashtra',
of India, instead of utility a third party Productivity, Vol32, No4,January-March
Soaps 41
involvement such as the Planning Commis- 1992.
'Ibtal 881
sion, state government-or private enterprise [7] K D Lawrence and W H Lawton (1981):
Source: RCG/Haigler (energy service company) may be neces-
Bailley[1O]. Applicationt ofDiffusion Model: Some EDn-
sary. Thiough DSM includes energy effi- pirical Results in New Prodiuct Forecast-
ing report will includc a 20-year plan pe- ciency and energy conservation it is broader ing, Lexington Books, Lexington, MA.
riod, cost benefit analysis from different as it includes load shape objectives like load [8] S Anand and V S Kothari (1990):
perspectives, viz, national resource per- shifting, valley filling and peak clipping. Characterisationz of Electric Motor s in
spective or, societal, utility perspective and DSM options: Option for customer load Industry anid Energy Conservation Po-
customer's perspective. We have also car- modifications. This could be through tech- tential in Itndia, Tata Energy Research
ried out a survey of industrial consumers to nology, e g, energy efficient motors; man- Institute, New Delhi.
see if such a plan will be acceptable to them agement, e g, good housekeeping; pricing, [9] P M Miller, H S Gellerand A T de Almeida
e g, time of day tariffs. (1992): 'An Example of Energy Saving in
and to seek their 'views on its
LDCS: Improving Electrical Equipment
implementability. Tle survey also helps to DSM technology: Improved/efticient teclh-
nology under consideiration. in Pakistan',Enietgy, Vol 17,No 10,pp 969-
assess the potential for and the barriers to
982.
implementation of DSM options. In addi- DSM programime: DSM option +
[10] -(1987): Nonz-Utility Power Generation
tion to the options considered here otlher programme stiucture (incentives, etc) +
in the Itndiaji States of Gujarat and
options like improved power factor conniec- programmes costs for operatitng and moiii-
Maharashtra: Potentlial, Ihnpediments and
tion, replacing V belts by flat belts, high toring programme.
l'olicy Issiues, RCG/HaiglerBailley, June.
efficiency fans and pumps, refrigerant cen- DSM- plan: Sum of individual DSMI [1l] J Parikh, R Banerjee, S Reddy and S
trifugal compressors and process modifica- programmes. Balakiishniatn (I1993): 'Long-term Perspec-
tions are being considered in the IGIDR- Energy efficiency: Efficiency of utilisation tives for DSM Options for the HT Indus-
EMCAT study. Results for a 20-year of energy. This could be achieved through trial Sector in Maharashtra', paper to be
perspective indicate a demand saving of more efficient equipment. presented at the 2nd International Energy
3,380 MW by DSM in the H T industries of Energy conservation: Thouglh oftep syn- Efficiency and DSM Conference, Sep-
Maharastra [II]. onynmous witlh energy efficienicy, eiiergy teinber 21-23, Stockholm, Sweden.

1670 Economic and Political Weekly August 7-14, 1993

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