Power sector operations in most of the countries all over the world have changed; this change has brought several challenges before these utilities. This is largely due to the uncertainties existing in the load growth, higher capital investments required in capacity addition, declining fuel sources and it’s associated environmental, effects and costs. Tariff changes due to the changing regulatory stands also affect the ability of utilities to service its customer base. The concept of demand-side management was developed in response to the potential problems of global warming and the need for sustainable development, and the recognition that improved energy efficiency represents the most cost-effective option to reduce the impacts of these problems. Demand-side management (DSM) refers to cooperative activities between the utility and its customers (sometimes with the assistance of third parties such as energy services companies and various trade allies) to implement options for increasing the efficiency of energy utilization, with resulting benefits to the customer, utility, and society as a whole.
The growth of power sector in India is manifold. The installed capacity has increased from 30,000 MW in 1981 to over 156783.98 MW on 31-01-2010. Despite this growth in supply, its power systems are struggling to overcome chronic power shortages and poor power quality. With demand exceeding supply, severe peak (around 15%) and energy (around 11%) shortages continue to annoy the sector. Shortages are primarily aggravated by inefficiencies in power generation, distribution and end-use systems. The end-use systems are inefficient because of the irrational tariffs, technological obsolescence of industrial processes and equipment, lack of awareness and yet to be developed energy services (ESCO) industry in India.
There are many problems being faced by the power sector in India; and the basic one is the poor financial conditions of the state utilities. Over the years, these utilities have been causing an increasingly larger drain on the State Government budgets. This is to the tune of 10-15% of the state fiscal deficits adversely impacting much needed investments in the other social sectors. The power sector is operating with very low or no returns on the equity and no contribution to future investments from internal resource. This results in inadequate investment in additional generation capacity which is likely to further exacerbate the existing gap between power supply and demand.
With captive market growth of 9.5% in terms of capacity addition would not add much; hence it would be difficult to meet the demand in the coming years. The direct and indirect economic impact of outages resulting from the capacity shortages is enormous. Some of the visible impacts range from crores of Rupees of losses in the industrial sector to over sizing of pumping systems resulting in falling groundwater levels at an alarming rate in the agricultural sector. The Indian power sector is facing two basic and interdependent issues. They are inferior operational performance leading to poor revenue cash flow, and as a consequence, inadequate capital mobilization for sector expansion. Present approaches that are employed do not completely tackle these issues. Power sector plans focus exclusively on new supply and lately, to an extent, on improving supply efficiency and reducing T&D losses (for instance, the latter through the Accelerated Power Development Program). There is a major omission of neglect of demand-side management (DSM) opportunities in India.
There is a clear role and potential for utility driven DSM programs in India. It is estimated that the end-use efficiency improvement potential in industry and building sector alone is of the order of Rs. 14,000 Crores and 54 billion units of electricity saving. In view of this, to capture some of this potential, the Government of India has targeted 15% improvement in energy efficiency by 2007-08. Also, the new Energy Conservation legislation seeks to implement energy efficiency policies that lead to widespread market development though better standards for appliances and equipment, energy efficiency labeling, rational cost-of-service based tariffs, mandatory energy audits, awareness and training, financial and fiscal incentives. The regular energy consumption patterns can be viewed as exogenous and known, but as alterable through interventions. The identification of the nature of the interventions to influence these patterns needs to be addressed. Obviously, the interventions must depend upon the determinants of energy consumption. In the case of residential electrical consumption, the main determinant would be the income if one goes by the conventional thinking.
If this is considered, it is politically incorrect to think of income-reduction policies to reduce electricity consumption. A study shows that income is a weak predictor of residential electricity consumption explaining only 38% of electricity consumption. It also reveals that, the appliance stock could explain as much as 93% of the dependent variable. Appliance stock, therefore, is a much better predictor of electricity consumption than income.
The demand side management requires an understanding of the appliances that spell out electricity consumption. With this objective, a study of household electricity consumption in the state of Karnataka was carried out in 2010-11 by the author and Electrical Engineering students of PDA College of Engineering, Gulbarga by conducting surveys in the Gulbarga district of Karnataka. The number of consumers and their consumption details for the month of March 2011, in the surveyed categories of Gulbarga and GESCOM is given in table I. The LT-2 category refers to AEH or 15 ampere category corresponding to a 3.5 to 5 kVA connected load, and the LT-1 refers to non-AEH or 5 ampere limit category corresponding to a 1.15 kVA load. In India, LT-1 category consumers mainly include the Bhagya Jyothi/ Kutira Jyothi (BJ/KJ) scheme beneficiaries. BJ/KJ scheme refers to the low income group consumers to whom the government provides electricity at subsidised or zero rates.
Three different approaches have been used to study the residential electricity demand in the Metropolis of Bangalore, Karnataka. They are the engineering approach, the appliance stock approach and the appliance census approach. They have established that the appliance stock and appliance census approaches have explained the end-use consumption of electricity much better than the engineering approach. The present study is based on a survey of the appliance stock in selected (sample) households.
Another study analyses the end-uses of various categories of appliances in the different electricity consuming sectors and has shown that in the domestic sector the electricity consumption varies between the urban and rural households as the appliance stocks are significantly different. Also across different slabs of electricity usage (9 slabs were considered based on the quantum of annual usage of electricity) there exists a growth trend in the appliance stock possessed by these households. The present study has benefited from these studies in getting better results from the pilot study and survey.
The paper is arranged as follows. Section II deals with the implementation stages of DSM. In section III, the electricity scenario of the Karnataka state is given. Section IV, gives the methodology and sample selection details and in section V, the end use analysis of electricity in the residential sector of Gulbarga, Karnataka is discussed. Paper is concluded in section VI.