UTILIZATION OF ELECTRICAL ENERGY

CHAPTER 6: Demand Side Management

L-6-1
 Today’s Content

• History of Energy Crisis in the US (1970s)

• DSM & implementation
• Tariff
• Power Factor & corrective methods
 HISTORY
1970s Energy Crisis
• In October of 1973, the Arab members of OPEC placed an embargo on the U.S. in
response to its support of Israel and the Yom Kippur War.
History
In 1948, the Allied powers had carved land out of the British-controlled territory
of Palestine in order to create the state of Israel, which would serve as a homeland for
disenfranchised Jews from around the world.
Much of the Arab population in the region refused to acknowledge the Israeli state,
however, and over the next decades sporadic attacks periodically erupted into full-scale
conflict. One of these Arab-Israeli wars, the Yom Kippur War, began in early October
1973, when Egypt and Syria attacked Israel on the Jewish holy day of Yom Kippur.
After the Soviet Union began sending arms to Egypt and Syria, U.S. President Richard
Nixon began an effort to resupply Israel.
https://www.history.com/topics/1970s/energy-crisis
 Contd....

• In the three frenzied months after the embargo was announced, the price of oil
shot from $3 per barrel to $12.
• The oil embargo was lifted in March 1974, but oil prices remained high, and
the effects of the energy crisis lingered throughout the decade.
• As part of the movement toward energy reform, efforts were made to stimulate
domestic oil production as well as to reduce American dependence on fossil
fuels and find alternative sources of power, including renewable energy sources
such as solar or wind power, as well as nuclear power.
 Contd....

• The term DSM was coined following the time of the 1973 energy
crisis and 1979 energy crisis.
• During the time of the energy crises in the 1970s, the federal government
passed the Public Utility Regulatory Policies Act (PURPA), hoping to reduce
dependence on foreign oil and to promote energy efficiency and alternative
energy sources. This act forced utilities to obtain the cheapest possible power
from independent power producers, which in turn promoted renewables and
encouraged the utility to reduce the amount of power they need, hence pushing
forward agendas for energy efficiency and demand management.
 Demand Side Management

• DSM also known as Energy Side Management has ultimate aim to reduce the
peak demand of a power plant.
• It is planning, implementation & monitoring of those utility activities which are
designed to influence the customer’s use of electricity in ways that will produce
desired changes in the utility load shape.
It has different meaning for different categories of people:
 For utility, DSM means avoiding or delaying the need to construct new
generating capacity by reduction or shift of consumer’s energy use period.
 For domestic consumer, DSM means an opportunity to save money by reducing
their electricity bill taking the advantage of financial incentive provided by the
utility.
 Contd....

Why do we need DSM?

1. Cost Reduction
 To meet the peak load requirement, the system of generation, transmission &
distribution must at least be capable of meeting peak load which may not be
utilized for most of the period.
 It means for same amount of energy supply over a period, the installed capacity
of the plant will be higher for a load curve with high peak to average ratio than
one with lower peak to average ratio.
 With the help of DSM activities, that peak can be reduced which will ultimately
reduce investment in generation, transmission & distribution.
 Contd....

Why do we need DSM?

2. Reducing Transmission Line losses
 DSM approaches like pf correction helps to reduce the power loss that occurs
in the transmission line as poor power factor requires reactive power, the
current to supply that will also be required to be supplied by the generator.
 This increases the capacity of generator required & also increased line losses.
3. Environmental Benefits
With DSM activities like promotion for use of efficient electrical equipment,
distributed generation using renewable energy sources reduces the dependency on
fuels and avoids environmental impact caused by them.
 Objective of DSM

• To reduce the peak electricity demand & promote the use of energy efficient
devices
The main types of DSM activities may be classified into three categories:
1. Energy Reduction Programs: Reducing Peak Demand through efficient
process
2. Load Management Programs: Changing the load pattern & encouraging less
demand at peak times.
3. Load Growth & Conservation Programs.
 Advantages of DSM

• Postpone the construction of new power plant.

• Deferring high investment to setup transmission & distribution networks.
• Reduce the number of blackouts.
• Less stress on power plant.
• Low cost of generation per unit.
• Network reliability
• Reduction in consumer’s electricity bill
• Enhances the national energy security by reducing the dependency on
expensive import of fuel.
• Creation of long term jobs due to new innovation & technology.
 Steps to Implement DSM

Step 1: Load Research

In this stage, customer’s base load, tariff & load profile on an hourly basis will be
assessed and then the sectors contributing to the load shape will be identified.
Step 2: Define Load Shape objective
Based on the results of the load research, DSM team define the load shape
objective for the current situation.
Various load shape objectives are:
a. Peak Clipping
The reduction of utility load primarily during the periods of peak demand.
b. Valley Filling: The improvement of system load factor by building load is off
load periods.
 Contd......

c. Load shifting: The reduction of utility loads during periods of peak demand
while at the same time shifting load in off peak periods.
d. Conservation: The reduction of utility loads more or less equally during all or
most hours of the day.
e. Load Building: The increase of utility loads more or less equally during all or
most hours of the day.
f. Provision of a more flexible utility
load shape: It refers to programs that set
up utility options to alter customer energy
consumption on an “as needed” basis.
 Contd....

Step 3: Asses Program Implementation Strategies

This step will identify the end use application that can be potentially targeted to
reduce peak demand, specifically in sectors contributing to system peak. This step
will also carry out detailed benefit-cost analysis for the end users & the utilities
including societal & environmental benefits.
Step 4: Implementation
Step 5: Monitoring & Evaluation
 Consumer Classification & their Demand characteristics

• Covered in Chapter 1.
• Refer the slides & handout.
 Tariff

The rate or charge for electricity consumption is known as tariff.

Objectives
1. To recover the cost of capital investment in generating, transmitting &
distributing equipment.
2. To recover the cost of operation, supplies & maintenance of the equipment.
3. To achieve a suitable profit or return on the total capital investment.
4. To recover the cost of metering equipment, billing, collection costs &
miscellaneous services.
 Factors affecting Tariff Framing

• A proper return should be secured for the invested capital.

• Tariff should be simple to understand & transparent.
• The tariff should be attractive so that a large number of customers are
encouraged to use electrical energy.
• Consumers should be encouraged to use efficient devices & penalized for poor
power factor.
• The tariff framing should also consider the paying ability of the consumers or it
should be flexible for different types of consumers.
 Types of Tariff
1. Simple Tariff
 Fix rate per unit of energy consumed.
 Price charged per unit is constant i.e. it does not vary with increase or decrease in
number of units consumed.
Disadvantages: No consideration for different types of consumers, the cost per unit
delivered is high.
2. Flat Rate Tariff
 Different consumers load are charged at different rates i.e. the flat rate for light &
fan load is slightly higher than for power load.
 The rate is arrived at by taking into account its load factor & diversity factor.
Disadvantages: Separate meters are required for different types of supply, difficulty in
calculating accurate LF & DF of the consumers, consumer charged at the same rate
irrespective of magnitude of energy consumed.
 Contd....
3. Step Rate Tariff
 It is a group of flat rate tariffs of decreasing unit charges for higher range of
consumption.
 This type of tariff takes into account the fact of lower generating cost owing to
higher consumption consequent to improvement of load factor & therefore
promotes the use of electricity.
4. Block Rate Tariff
 A given block of energy is charged at higher rate & succeeding block of energy are
charged at progressively reduced rate.
Example: First 25 units for Rs 4/unit, next 40 units for Rs3.5/unit & so on.
 The advantage is that the consumer gets an incentive for consuming more electrical
energy. This increased the LF of the system & hence the generation cost is reduced.
Its main drawback is that it lacks a measure of the consumer’s demand.
 Contd....
5. Hopkinson Demand rate or Two part tariff
 Total charge is split into two parts namely fixed charge & running charge.
 Fixed charge is independent of energy consumed & proportional to maximum
demand so it is made at a certain amount per kW of maximum demand which can
be assessed on the basis of total connected loads or total combined capacity.
 Running charge is made at a certain amount per kWh for total energy consumed.
Total charge = Rs a*kW + b*kWh
a = charge per kW of maximum demand assessed
b = charge per kWh or unit
In this tariff, charge made on maximum demand recovers fixed charges like interest &
depreciation on capital cost, taxes, insurance & energy charge covers the operating
cost.
 Contd....
6. Maximum Demand Tariff
 Similar to Two part tariff except that in this case maximum demand is actually measured by a
maximum demand indicator instead of merely assessing it on the basis of ratable value.
7. Power Factor Tariff
Sometimes consumers are penalized for poor power factor by applying the following types of
power factor tariffs.
a. kVA maximum demand tariff
 Modified version of two part tariff where consumers are charged for maximum demand in
terms of kVA rather than kW. It encourages the consumer to improve the pf.
b. kWh & kVARh tariff
 kWh & kVARh are measured and charged separately.
 Since kVARh decreases with increasing pf, the consumer tries to improve the pf of his
installation in order to decrease charges on kVARh.
 Power Factor
It is the cosine of the phase angle difference between voltage & current.
Some useful relations:
kVA = 𝑘𝑊 2 + 𝑘𝑉𝐴𝑅 2
Pf = cosφ = kW/kVA & sinφ = kVAR/kVA
kVAR = kW*tanφ ; Q = P*tanφ
We know,
P = V*I*cosΦ
𝑃
Or, 𝐼 = 𝑉∗cosΦ.....................(1)
If the supply voltage is kept constant and for a given power, P, equation (1) tells us that
current is inversely proportional to the power factor.
1
i.e. I ∝ 𝑐𝑜𝑠Φ
 Disadvantages of Poor Power Factor

• Higher amount of current means higher copper loss (heat loss) in the system,
hence efficiency is reduced.
• Large amount of current is responsible for larger voltage drop in the conductor
thus leading to poor voltage regulation.
• Since, large amount of current is to carried, larger size of conductor cables
should be used thus increasing the capital cost.
 Power Factor Improvement
The power factor of the circuit can be improved by placing a capacitor in parallel
to the load.
Consider a circuit where an inductive load, R & L are in series and hence it will
draw lagging current I1 say at pf cosΦ1 from the source as shown in the figure.

I1
V
AC Φ1
Inductive
SOURCE,
Load
V I1
 Contd...

Now the capacitor C is connected in parallel across load which draws a leading
current Ic i.e. leading the supply voltage by 90 degrees.

IC I1
AC C Inductive load
Source,
V
 Contd...

The resulting current I is the phasor sum of I1 & IC . The resultant angle of lag i.e.
of I is shown in the phasor diagram.

IC

V
Φ2 V
Φ1
Φ1 I

I1
I1
Without Capacitor With Capacitor
 Contd...

• It is clear from the phasor diagram that Φ2 is less than Φ1 so that cosΦ2 is
greater than cosΦ1. Hence power factor of the system is increased.
A GIF illustration
 Contd...

The following points are worth noting,

i) The circuit current I(supply), after pf correction is less than
Original circuit current
I1. IC

Φ2 V
Φ1 I

I1
With Capacitor
 Contd...

The following points are worth noting,

ii)The active or wattful component remains the same before and after
Pf correction.
i.e. IC
I1cosΦ1= IcosΦ2
Therefore, active power
I1cosΦ1= IcosΦ2
Remains same during Φ2 V
Pf correction. Φ1 I

I1
With Capacitor
 Contd...
The following points are worth noting,
iii) The original reactive component is I1sinΦ1. However after pf correction, it is
reduced by Ic to IsinΦ2.

IC

Φ2 V
IsinΦ2 Φ1 I
I1sinΦ1

I1
With Capacitor
 Contd...

i.e. IsinΦ2= I1sinΦ1-IC

Or, V*IsinΦ2= V*I1sinΦ1-V*IC
Or, Net VAR after correction= (Lagging VAR before correction-Leading VAR supplied by
Capacitor)
 Rating of the Capacitor
The rating of the capacitor can be found as following:

Tanφ1=Q1/P

IC

P
Φ2 V
V*IsinΦ2=Q2 Φ1 I
V*I1sinΦ1=Q1
QC

I1
With Capacitor
 Contd...
From the phasor diagram,
Qc = Q1-Q2 = PtanΦ1-PtanΦ2
Or, Qc = P(tanΦ1-tanΦ2)
Or, V*Ic*sin90 = P(tanΦ1-tanΦ2)
𝑉
Or, V*𝑋𝑐 = P(tanΦ1-tanΦ2)
𝑉2
Or, 𝑋𝑐
= P(tanΦ1-tanΦ2)
Or, V2(wC) = P(tanΦ1-tanΦ2)
P(tanΦ1−tanΦ2)
Or, C = 𝑤𝑉2
F; w = 2πf, f is frequency in hertz and V is the supply
voltage.
 A Clause from Electricity Regulation,2050

Source:https://www.nea.org.np/admin/assets/uploads/supportive_docs/Electricity_Regulation_2050-english.pdf
End of L-6-1