Driven by the need to strengthen the country’s electricity grid, the government is promoting smart grid development. A smart grid is cost effective, responsive and better engineered for managing power transmission. Apart from enabling effective monitoring of the transmission process, it can also
facilitate greater control and flexibility in power consumption. This is made possible through strategies such as demand response (DR).
DR is a strategy used by power utilities to reduce or shift energy consumption from peak hours of the day (when the demand for electricity is the maximum) to leaner demand periods. It allows customers to choose non-essential loads, which can be shed by the customers themselves or by the utility during peak hours. DR is a prearranged agreement between the utility and the consumer with specific conditions regarding load, price, and time intervals. Since power plants and transmission systems are designed to respond to the highest potential demand, lowering high demand during peak hours of the day helps utilities reduce overall installation and operating costs, and mitigate potential grid failures.
To establish the potential of DR and study its possible benefits in the Indian context, scholars from the Lawrence Berkeley National Laboratory and the University of California, along with Tata Power Delhi Distribution Limited (TPDDL), conducted a study to assess the DR potential of industrial and commercial users in Delhi. They used around six months’ data from TPDDL’s pilot DR programme for commercial and industrial customers and estimated demand reduction during DR events for each of the participating customer categories. The study also estimated the DR potential for the entire state by extrapolating results from the actual field performance analysis. It calculated DR through the avoided cost of day-ahead market purchases, unscheduled interchange charges and TPDDL’s marginal generation. The study found that there is significant DR potential among commercial and industrial customers, enough to reduce 8-10 per cent of peak demand. In addition, DR can result in short-run economic benefits to the utility and consumers. Also, by enabling the use of the same capacity to serve more consumers and avoid load shedding, DR can bring about long-term benefits such as capital investment deferral.
Benefits and challenges
While proper implementation of DR alone can considerably improve the efficacy of a system, DR combined with a smart grid can produce additional benefits. A smart grid can improve DR efficiency by streamlining the notification process and providing real-time information to customers about their energy usage and pricing. Such an arrangement can also enable utilities to detect and respond to instances of load increase promptly by calling a DR event. An upcoming opportunity in this regard is the automation of DR processes using smart grids. An automated DR can detect the need to shed load, send signals to participants and control all the devices that use electricity on a consumer’s premises.
However, there are a number of challenges associated with DR implementation, which typically revolve around reliability. It can be very difficult for a consumer to participate in a DR prog-
ramme; therefore, utilities should find appropriate incentives to motivate customers and encourage their participation. For instance, customers paying a single tariff for all units consumed do not have an incentive to monitor their consumption. In order to address this issue, power utilities can offer rebates and bill credits or use variable pricing to change consumption patterns. Since DR events can be uncomfortable, particularly for vulnerable populations, many utilities have provisions that allow DR participants to override an event, risking the programme’s reliability. Lastly, utilities use various types of technologies to signal a DR event to a customer. Coordinating a DR event with IT and communication technologies requires proper selection, and the testing implementation of these technologies.
The way forward
In India, DR is at a nascent stage. For its proper implementation, an appropriate regulatory framework needs to be put in place. Also, consumer awareness and transparency in functioning should be a priority to ensure acceptance of the DR programme. The electrical distribution network must be strengthened to ensure reliability in operations. Finally, to cater to the diverse needs of consumers, a variety of DR modules need to be prepared. n
Based on a presentation by Ranjit Deshmukh, Rongxin Yin and Ghatikar, scholars from the Lawrence Berkeley National Laboratory, at the India Smart Grid Week 2015