Integrated resource planning Key to peak load management

January 20, 2016 1:43 am0 commentsViews: 133

special_focus_1By Umesh Agrawal
In a reducing deficit scenario, Integrated Resource Planning is of paramount importance for the system to effective meet the demand at efficient costs. Peak deficit recently has declined to 3.2% (September 2015) from 10.6% (March 2012), highlighting that capacity additions (from 230 GW in March 2012 to 319 GW in September 2015) have been instrumental in bringing down this deficit; however a closer look will clearly disperse this view and bring to light the continued suppressed demand and load shedding by distribution utilities. The issue is interlinked with a number of problems, the financial health of the utilities which results in lower electricity offtake, hence generating companies are generating less electricity, resulting in reduction in PLF (73% – March 2012 to 63% – September 2015) and culminating to stress on developers and eventually lenders. However, with Ujwal Discom Assurance Yojana (UDAY), the distribution utility’s situation is expected to improve, load shedding reduce and power purchase would increase to meet its existing, suppressed (due to load shedding) and latent demand. However a key discussion area is the peak load management (PLM) especially in the rising tariff and poor utility health scenario. Inadequate capacity addition in hydel capacity is leading to use of coal fired capacity for meeting peak demand. But use of base load capacity is inefficient in terms of managing the power system as well as in terms of the delivered tariffs for the end users.

To overcome this, distribution utilities would need to apply an Integrated Resource Planning approach which encompasses both demand as well as supply side planning to handle peaking and intermediate load issues. This integrated resource planning would aid in preparing a detailed demand requirement, understand the pattern of load especially peak and super peak loads and plan in an efficient manner so that distribution utilities can apply a number of tools and techniques to effectively and efficiently manage the power procurement and the power system.

From demand side planning, the distribution utilities need to:
1. Plan demand side management – The method needs co-operative action between utilities and consumers i.e. industrial, residential, commercial and agricultural to modify the load. Most of the states have already  taken the first step of introducing time of day tariff mechanism. There will be a need to deepen the use of this to more categories to help consumers take efficient consumption decisions.
2. Promoting use of energy efficiency equipment – The government’s push on using LED and replacing bulb, the use of the BEE rating equipment would help manage/reduce the peak load for residential and commercial consumers. Continued focus on such initiatives is critical.
3. Planning systematic load staggering initiatives – Discoms would need to continue focusing on supplying power to agriculture during night time, thus benefiting from the time of use (off peak charges etc.), while planning industrial load in a similar manner (giving incentives for off peak usage and help staggering the load).
4. Apart from time of use tariff plan, technological and management programmes such as direct load control, interruptible load control, smart grid etc. would be essential tools in managing PLM.

From supply side planning, the distribution utilities need to:
1. Increase hydro/thermal share – With the increase in renewable capacity, increased capacity of storage based hydro capacity will be critical to create flexibility. The distribution utilities need to efficiently plan the supply basket so that the cost of power procurement is optimised.
2. Efficient planning for super peaks which may occur once/ twice a year e.g. festival time etc.

The way forward
Efforts to promote peak load management would be unsuccessful unless the distribution utilities are made accountable towards meeting the peak demand. Hence, regulators must lay emphasis on long term integrated resource planning where the utilities would meritoriously plan their basket so they can readily provide efficient power to meet peak demand and provide affordable tariff to consumers.

special_focus_1The author is Associate Director
– Energy, Utilities and Mining,
PricewaterhouseCoopers Pvt Ltd.

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