Demand Side Management: Augmenting Tool in Energy Security and Climate Change

Demand-side management (DSM) proved to be a conventional concept emanates from the need seen as a means of reducing peak electricity demand and in which a power utility, such as an vertically integrated utility or State Electricity Boards (SEB) manages the demand for power among its customers to meet its current and future needs, so that the utilities can adjourn building further capacity. The two pronged approach of DSM one by reducing the overall load, secondly due to various beneficial outputs makes DSM significant scope for contributing towards the increase of efficiency of the system investment. The benefits of DSM program includes alleviating electrical system emergencies, decrementing blackouts, increasing system reliability and most importantly independency on expensive imports of fuel in the view of limited reserves and high energy prices. DSM encompasses a variety of utility activities designed to change the level or timing of customer’s electricity demand. DSM has a major role to play in procrastinating bundles investment in generation, transmission and distribution networks with a common initiative of reducing GHG emission on a large scale. DSM is either implemented directly through utility sponsored programs or through market intermediaries like Energy Service Companies (ESCOs). In India, DSM can be achieved through energy efficiency, which is the reduction of kilowatt hours (kWh) of energy consumption or demand load management, which is the reduction of kilowatts (kW) of power demand or the displacement of demand to off-peak times. In the former category are programs such as awareness generation programs, customer or vendor rebates for efficient equipment, etc, while the latter includes time-of-use tariffs, interruptible tariffs, direct load control, etc. Specific type of programs depends on the utility objective: peak clipping, load shifting, strategic conservation or strategic load growth. This paper, will concisely discuss the major benefits and challenges that are faced while implementing electricity (DSM) and why Indian context is different from rest of the world and the conclusions derived for elsewhere cannot be extrapolated for India. Simultaneously examine the DSM measures which can be undertaken to reduce energy demand and restructure more efficient and sustainable energy use in the context of the Indian electricity system.