Summary

• Demand side management on the consumer side needs the establishment of a system of collection, analysis, and reporting on the consumer's energy consumption and costs. Based on this information, in common, various combinations of value and cost modifications can be used for mutually benefiting the utility and its customers.

• Many DSM programmes for all types of consumers involves measures such as energy efficiency retrofits (weatherisation) of homes, energy audits for commercial businesses and industrial units, rebates to install certain kinds of efficient new equipment such as geothermal heat pumps, financing efficiency improvements, awareness campaigns, etc.

• Several specific activities could be taken up by utilities as well as consumers in the industrial, agricultural, domestic and commercial sectors of our economy for DSM. Some measures which are being taken and could be undertaken through the industries to curtail electricity consumption are installation of variable frequency drive, installation of vapour absorption systems, upgrading co-generation facilities, use of high efficiency pumps and blowers, replacing electrical heaters, lighting modifications, installing capacitors, etc.

• Promoting R&D programmes for the development of energy efficient pumping systems and their commercialization, awareness campaigns for the use of energy efficient pump sets and water conservation are a few of the strategies which could be adopted for improving energy efficiency in the agricultural sector.

• Lighting, Cooking, space heating and cooling, electrical appliances, air conditioning and HVAC (Heating, Ventilation, Air Conditioning and Cooling) constitute the bulk of electricity use in the domestic and commercial electricity consumption. The necessary components of the demand side management and energy efficiency domain in these sectors are: Use of energy-efficient appliances, efficient elements for buildings, and methods to manage an assembly of appliances and systems in sequence to improve the use of energy system capacities.

• Some DSM strategies which could be adopted for improving energy efficiency within the commercial and domestic sectors are development and enforcement of energy efficiency standards, mandatory energy labeling and ISI certification of all energy using devices, awareness campaigns, providing incentives to energy efficient equipment manufacturers, use of energy efficient lighting appliances, promotion of energy competent buildings, community energy planning, etc.

• Some of the reasons why the consumers in these sectors do not adopt DSM are low energy costs, scarcity of funds, low economic incentives to adopt these measures, lack of awareness about the advantages of DSM, etc.

• Utilities could take DSM measures, such as free or subsidized distribution of energy efficient systems and appliances, and provision of up-front financing on reasonable terms for energy efficiency investments made through the consumers.

• One of the routes to DSM is by energy service companies (ESCOs) that can implement and finance energy efficiency measures at the user's premises. The use of ESCOs is attractive for utilities and the users as it entails extremely little initial investment by them. Energy saving projects and DSM programmes could be financed either through the ESCO or through banks and financial institutions.

• There are various challenges in the implementation of DSM by the power distribution sector such as lack of funding, lack of awareness about saving potential, lack of widespread education and training, lack of standardization and labeling on equipment/devices, the acquisition of participants and etc.

• An appropriate policy, and regulatory or pricing environment must be put in place to make investments through energy consumers and power utilities cost effective in a market context. The Regulator should provide incentives for utilities to pursue DSM. Utilities should improve data tracking methods, load research and programme evaluation methods.

• Utilities should also improve industrial DSM programme design through addressing customer concerns, improving marketing techniques, focusing on programme flexibility, and offering financial incentives. A core DSM staff or "cell" could be set up inside a power utility and trained to develop a plan for the DSM programme and maintain its implementation.