Demand Control: DSM initiatives to keep consumption in check

DSM initiatives to keep consumption in check

Demand-side management (DSM) is an effective means to create a low-carbon electricity scenario and improve energy efficiency. Various DSM programmes are being implemented to shape the energy consumption pattern of industrial and household consumers, lower energy consumption and enhance energy efficiency. For industrial consumers, one of the key DSM programmes is the Perform, Achieve and Trade (PAT) scheme, which has created a market for trading of energy saving certificates (ESCerts). These certificates are issued to industries that reduce their specific energy consumption beyond the target. Apart from this, Energy Efficiency Services Limited’s (EESL) Unnat Jyoti by Affordable LEDs and Appliances for All (UJALA) scheme has significantly contributed to energy efficiency improvement by promoting the use of LEDs, and energy efficient fans and tubelights.


The PAT scheme was launched in 2012 by the Bureau of Energy Efficiency (BEE) under the National Mission on Enhanced Energy Efficiency. PAT is a regulatory instrument aimed at reducing the specific energy consumption of energy-intensive industries through the certification of excess energy savings in the form of ESCerts.

PAT is a multi-cycle scheme and is now in its third cycle of implementation, starting from 2017-18 to 2019-20. This cycle, with an energy reduction target of 1.06 million tonnes of oil equivalent (mtoe), covers 116 designated consumers (DCs) across six sectors – thermal power plants, cement, aluminium, pulp and paper, iron and steel, and textiles.

Under PAT Cycle I (implementation period 2012-13 to 2014-15), the DCs achieved 8.67 mtoe energy reduction, or around 1.25 per cent of the total primary energy supply in India, overachieving the target by 30 per cent. PAT Cycle II (2016-17 to 2018-19) covered 11 sectors with expected energy savings of 8.87 mtoe.


In 2015, EESL launched the world’s largest domestic lighting programme, UJALA. It is one of the most effective DSM initiatives in the country for promoting energy efficiency in the lighting industry. Under the scheme, EESL distributes LED bulbs to households at 40 per cent of the market price, while the total upfront investment and risk coverage is borne by EESL. The key success factor behind the scheme has been the decline in LED prices owing to demand aggregation and bulk procurement. As of July 18, 2019, 356.37 million LEDs have been distributed across the country. This has resulted in annual energy savings of 46,281 million kWh, cost savings of Rs 185.12 billion, avoided peak demand of 9,266 MW, and carbon dioxide reduction of 37.49 million tonnes (mt). Apart from this, EESL is distributing energy efficient tube lights under UJALA. So far, 7.1 million tubelights have been distributed under the scheme. EESL is also implementing a national scheme, PAVAN, under UJALA for the distribution of BEE 5-star-rated energy efficient fans. As of July 18, 2019, about 2.27 million fans have been distributed under the scheme, which is equivalent to energy savings of nearly 211.56 MUs per year and an avoided peak demand of 57 MW.

EESL’s super-efficient air-conditioning programme

EESL is implementing a super-efficient air-conditioning programme, under which it will sell super-efficient air conditioners (ACs) at prices that are comparable to the most energy efficient ACs available in the market. These ACs will provide 1.5 TR cooling capacity at a high ambient temperature while reducing the cost of cooling by 50 per cent.

Under the first phase, EESL is distributing 50,000 super-efficient and environment-friendly ACs to consumers of BSES Rajdhani Power Limited, BSES Yamuna Power Limited (BYPL) and Tata Power Delhi Distribution Limited (Tata Power-DDL) on a first come, first served basis.


The BEE is implementing agriculture demand-side management (AgDSM) by reducing the overall power consumption of the agricultural sector, improving the efficiency of groundwater extraction, and lowering the subsidy burden on state utilities. The BEE, in association with various discoms, has implemented four pilot AgDSM projects across Maharashtra, Karnataka and Andhra Pradesh. Under the AgDSM, inefficient agricultural pump sets are being replaced with BEE-5-star-rated energy efficient pump sets by EESL. EESL has successfully completed the first AgDSM project for 590 pump sets under Hubli Electricity Supply Company Limited, Karnataka. It has also replaced 1,337 pump sets under Chamundeshwari Electricity Supply Corporation Limited, Karnataka. Apart from this, it is implementing the Municipal Demand Side Management (MuDSM) programme with the aim of improving the overall energy efficiency of urban local bodies.

Standards and labelling

The BEE’s standards and labelling programme aims to provide consumers with information about the energy and cost saving potential of household goods and other equipment. Under the programme, mandatory ratings are extended to room ACs, frost-free refrigerators, tubular fluorescent lamps, distribution transformers, room ACs, direct cool refrigerators, colour TV sets, electric geysers, variable capacity inverter air conditioners and LED lamps. Besides, various voluntary appliances are covered under the star labelling programme. These include general-purpose motors, ceiling fans and agricultural pump sets.

Capacity building of discoms

The BEE is implementing a capacity building programme to support various DSM initiatives. The programme includes load management, development of a DSM action plan and implementation of DSM activities. Currently, 34 discoms have been selected for participating in the programme as beneficiaries. Some of the other ongoing activities under the programme are providing manpower support and conducting training programmes.

Utility initiatives

Apart from various central government schemes for promoting DSM, a number of utlity-level initiatives are under execution. Recently, in June 2019, BYPL partnered with The Energy and Resources Institute (TERI), Panasonic India, and the Council on Energy, Environment and Water for its DSM programme. Under the partnership, three initiatives have been proposed – a behavioural energy saving app, green division concept and solar microgrids with battery storage. These initiatives hold the potential to save around 380 MUs of electricity and mitigate 260,000 mt of carbon emissions annually. In February 2019, TERI signed an MoU with the Department of Power and Non-conventional Energy Sources (NES), West Bengal, for the implementation of DSM initiatives in the state, among other things.

Apart from this, BESCOM has proposed to implement the Distribution Energy Efficiency Project (DEEP) by providing dynamic reactive compensation for a power factor improvement scheme on select 11 kV feeders on a pilot basis. The DEEP system consists of a multifunction measurement and control unit, a GSM/ GPRS modem, capacitors, capacitor-duty contractors and isolation transformers. In another development, TPDDL replaced 9,089 non-star rated ACs under the AC replacement scheme. This yielded deemed load reduction of 5.94 MW and deemed savings of 7 MUs annually.

At the utility level, one of the widely adopted DSM strategies is demand response, wherein the companies aim to reduce or shift their energy consumption from the peak hours of the day, when the demand for electricity is the greatest, to leaner demand periods. Tata Power (Mumbai) rolled out India’s first demand response programme as a part of its DSM initiative in 2014 and implemented aggregator-based and auto demand response projects. Under this model, the cumulative demand response curtailment of about 14.45 MW was achieved. Another demand response pilot was implemented by BSES Delhi, wherein the 500 largest consumers of BYPL in East and Central Delhi with a load of over 500 kW each were enrolled. They were requested to voluntarily reduce their electricity load as and when required, especially during peak hours. For the same, they were given a financial incentive of Re 1 per unit. Another example of a demand response programme is by Jaipur Vidyut Vitran Nigam Limited in 2013-14. It helped achieve power savings of over 21 MW. A total of 17 participants from three industrial areas were selected under the programme.

Some of the other initiatives undertaken by utilities for DSM are implementation of time-of-day tariff, replacement of existing appliances with BEE-rated appliances, and launch of public information campaigns and workshops. Besides, over 20 states have issued DSM regulations, which serve as the overarching framework for the implementation of DSM initiatives in the state.

There are several challenges in the implementation of DSM programmes such as the lack of of seriousness on the part of state discoms and governments, weak financial position of discoms, and uncertainty regarding the large-scale impact of DSM pilot projects. Addressing these issues would go a long way in promoting energy efficient consumption in industries as well as households. That said, the national-level initiatives for promoting energy efficiency are progressing well and have delivered results on the ground.

Priyanka Kwatra