80. Demand Side Management – Essential

Efficient use of energy can reduce energy intensity (i.e. energy consumed per unit of goods and services produced) of our economy – making it globally competitive by reducing cost of goods and services produced on account of reduced input energy cost. This can lead to savings of vital energy resources without foregoing any end use, and will enhance the energy security (i.e. sustained availability of energy at affordable price). It will also reduce the emission of green house gasses (GHG) that also contribute to global warming and in turn, climate change. Even after substantial increase in capacity of power generation from 1350 MW at the time of Independence to about 132,330 MW as of March 2007, the country is currently still facing peak power capacity shortages of 12% and about 8% of total electricity demand is left un-served. Chronic power shortages have resulted in low supply voltages, involuntarily load shedding, and installation of captive power generation by consumers. To meet the increasing demand for power requires huge investment in creating additional capacity of generation, transmission and distribution as well as in fuel supply. Alternatively, power saving – through efficient use of energy and its conservation – can be achieved at less than one fourth the cost of fresh generation capacity created. In this context, efficient use of energy and its conservation at supply as well as demand side is of paramount importance. For economic and efficient use of power systems, it is imperative that all the components i.e. generation, transmission and distribution should work at the maximum permissible capacity. However, as per varied needs and consumption behaviour of consumers, there is diversity in demand for electricity at various points of time in a day, which restrict the full capacity utilization of power system components. This is turn, puts a barrier to economic and efficient utilization of the power system. Demand side management (DSM) provides the mechanism to influence the behaviour of consumers so as to reduce the consumption of energy, and/or diversity of demand as far as possible through utility administered programmes. Therefore, keeping in view the importance of utility administered reduction in diversity of demand and energy consumption, DSM was identified as one of the thrust areas of the first action plan of the Bureau of Energy Efficiency (BEE) after enactment of the EC Act, 2001. In para 5.9.1 of National Electricity Policy also, high priority has been accorded to DSM. This paper discuss the requirement of huge investment in creating additional capacity of generation, transmission and distribution as well as in fuel supply to meet the increasing demand of power.