Karnataka Electricity Regulatory Commission 6th & 7th Floors, Mahalaxmi Chambers,

No.9/2, M.G. Road, Bangalore-560 001

Integrated Resource Planning for meeting the

Demand in Karnataka during 11th Plan

Staff Paper

December 2008

Index

Sl.no. Details Page Number

1. Introduction 01

2. Demand Forecast for 11th plan period 02-03

3. Demand side measures & revised electricity

requirements

03-14

4. Availability from existing & new stations 14-16

5. Estimation of surplus/deficit 16-17

6. Conclusions 17

7. References 18

LIST OF TABLES

TABLE NO. CONTENTS PAGE NO

TABLE – 1 17th EPS Forecast for Karnataka 2

TABLE – 2 KERC Forecast as per MYT Order 2

TABLE – 3 Estimates for the 11th Plan period 3

TABLE – 4 Potential for savings through CFL & SPV street lighting

8

TABLE – 5 Potential for savings in Domestic sector by using

SWHs

9

TABLE – 6 Potential for savings in Commercial sector by using

SWHs

9

TABLE – 7 Potential for savings in Domestic sector &

Commercial sector by using SWHs

10

TABLE – 8 Summary of peak & Energy saving potential in

Karnataka

13

TABLE – 9 Existing Installed Capacity

14

TABLE– 10

Proposed Capacity Additions 15

TABLE-11 Energy Availability from existing Stations 16

TABLE-12 Energy Availability from New Stations 16

TABLE-13 Peak Requirement & Availability 17

TABLE-14 Energy Requirement & Availability 17

Integrated Resource Planning for meeting the Demand in

Karnataka during 11th Plan

Introduction:

Conventionally, the electricity utilities in the country opt for supply side

management to meet the peak & energy requirements. However, for

sustainable growth it is necessary for the utilities to integrate all the resources

available (such as Demand side management, reduction of losses etc.,) while

implementing any plan to meet the electricity requirements. Keeping this in view,

the staff of the Commission has analyzed the various options available for the

utilities in Karnataka and has prepared a report on such analysis. In this Report an

effort has been made to identify the various resources/ options available for the

utilities to meet the electricity requirements in Karnataka during the 11th plan

period.

The first step to assess the electricity requirement is the preparation of a demand

forecast for the State. In this report the Commission‘s staff has considered the

demand forecast as per 17th EPS and the estimates made by the Commission in

its MYT order, with certain modifications to arrive at the demand for the State.

Breaking the conventional approach of supply side management, the report

attempts to first consider the potential/possible savings from DSM & Energy

conservation measures. After accounting for such savings the supply options are

looked at to arrive at shortage or surplus for the State. Besides this, the reduction

of T & D loss has also been factored in for the purpose of a arriving the likely

demand.

The report has the following sections:

1. Demand forecast for the 11th Plan period

2. Demand side measures and revised electricity requirement

3. Availability from existing & new stations

4. Estimation of surplus/shortage

5. Conclusions.

The above sections are discussed in detail in the following paragraphs:

1. Demand Forecast for the 11th Plan period

The CEA has published the 17th EPS estimating the demand for all the

States including Karnataka. This document has been issued under the

provisions of Electricity Act and National Electricity policy, which is a

reference document. The forecast as per 17th EPS for Karnataka is as

indicated below:

Table-1

17th EPS Forecast for Karnataka

Year Sales-

MU

%Loss Energy

requirement

MU

Load

factor

Peak

requirement-

MW

FY08 31192 22.00 39989 70.45 6480

FY09 34059 20.00 42574 70.15 6928

FY10 37347 18.50 45824 69.85 7489

FY11 41050 17.00 49458 69.55 8118

FY12 45241 15.50 53540 69.25 8826

It may be noted from the Load Generation Balance Report [LGBR]

prepared by CEA during June 2008, that the actual requirement for FY08

was 40320 MU, indicating an energy shortage of 2.7%. Similarly, the actual

peak requirement was 6583 MW and the actual peak met was 5567 MW,

indicating peak shortage of 15.4%. Similarly for FY09, as per the LGBR, the

energy requirement would be 44462 MU and considering the availability

of 39537 MU, there would be shortage of 11.08% for FY09. Similarly, the

peak requirement for FY09 would be 7900 MW and considering the

availability of 6108 MW, there would be shortage of 22.69% for FY09.

It is noted that as per LGBR report, the requirement for Karnataka has

increased compared to 17th EPS. In this context it is worthwhile to compare

the approved sales and power requirement as per the MYT order issued

by the Commission. The estimates of the Commission are as indicated

below:

Table-2

KERC forecast as per MYT Order

Year Sales-MU %Loss Energy

requirement-

MU

FY08 30506 24.77 40552

FY09 33524 23.84 44018

FY10 37046 22.39 47731

It can be noted that the revised figures as per LGBR nearly match with the

estimates of MYT order. Thus the energy requirements for FY08 to FY10 can

be considered as per Commission‘s MYT order and considering sales

growth as per MYT order and loss reduction by 1.5% in each year for the

remaining period, the estimates for energy requirement of the State could

be considered as under:

Table-3

Estimates for the 11th plan period

Year Sales-MU %Loss Energy

requirement-

MU

%Load

factor

Peak

requirement-

MW

FY08 30506 24.77 40550 * 69 6709

FY09 33524 23.84 44018 69 7282

FY10 37046 22.39 47734 69 7897

FY11 40751 20.89 51512 69 8522

FY12 44826 19.39 55608 69 9200

Note: 1. 10% growth in sales assumed based on FY08 to FY10 CAGR. This also matches with

the sales growth rate estimated by CEA.

2. For all the years 69% LF is considered to estimate peak requirement, which is

less than that estimated by CEA.

* Actual for FY08 is 40320 MU as per LGBR

Thus the peak requirement by the end of 11th plan period would be 9200 MW. NEP

at para 5.2.3 envisages 5% reserve margin to ensure grid security and quality &

reliability of power supply. Thus, assuming a spinning reserve of 5% and also a

forecast error of 5%, the total peak requirement is estimated at 10120 MW, which

is used for arriving at shortage/surplus. Similarly assuming 5% error in energy

forecast [no spinning reserve for energy calculations] , the requirement would be

58388 MU.

2. Demand Side Measures & Revised Electricity Requirement

I. Demand side Measures

There are various demand side options available to meet both the energy &

peak requirements. Demand side measures include DSM programs initiated by

the utility and energy conservation measures initiated by the end users. In the

current analysis the potential savings from use of CFLs, Installation of PV Street-

lighting systems, Solar Water Heaters in urban areas and efficiency improvements

in water Pumping system are considered, as they have a large potential for

savings. However, potential savings is also possible in industries by adopting

energy efficiency measures. It is worthwhile here to note some of the savings

achieved by industries in India as reported in Power Line Magazine of June 2008:

a. Jindal stainless ltd., Haryana had brought down the specific energy

consumption from 566 units/ton to 480 units/ton, a savings of about 15%

by adopting various energy efficiency measures like installing variable

frequency drives [VFD], excess air controller, Replacement of fluorescent

lamps with T-5 lamps, Installation of solar lighting system at plants main

gate etc.

b. Hindalco, west Bengal had reduced the specific consumption by 6%

from 666 units/ton to 626 units/ton by replacing pre-heater modulator

motors by digitally controlled valves, installation of waste heat recovery

recuperator, changing of coolant supply line, increasing the speed of air

circulating fans, VFDs etc.

c. SESA industries, Goa adopting energy efficiency measures such as

VFDs, replacement of metal blast pre-heater by hot blast stoves, insulation

of cold blast line of blast furnace, online monitoring system for gas &

humidity monitoring etc., had achieved 17.5% reduction from 179

units/ton to 148 units/ton.

All the above examples indicate that by adopting energy efficiency measures

there is a substantial potential for energy savings of 5% to 20% in industries. As a

first step, Designated Consumers as notified by GoI, should be brought under

mandatory energy audit and subsequently other industries could be brought

under energy audit. Based on the energy audit report, the industries can take up

various efficiency measures to save energy. Those industries that reduce specific

consumption could be incentivised by way of tariff or tax concessions. However,

in this analysis, savings in the industrial sector due to adoption of energy

efficiency measures has not been considered, for want of relevant data. Further,

it is to be noted that as per the information available from BEE, 384 industries that

participated in Energy Conservation scheme in 2007, had saved Rs.1843 crores

and avoided capacity was equivalent to 308 MW. The energy savings were 1620

MU at an investment of 2923 Crs.

It is also worthwhile to note that implementation of energy labeling program

introduced by the Bureau of Energy Efficiency (BEE) recently would result in

energy savings. It is estimated by the BEE that the most efficient refrigerator

would save 700 units per year and most efficient air conditioner would save 750

units per year. Since, energy labeling program has been introduced recently, it is

assumed that during 11th plan period the above program may not contribute

substantially for saving energy and therefore the same has not been factored in

for the purpose of this report. Similarly, BEE has estimated that at the national

level 1.7 billion units could be saved by adopting Energy Conservation Building

Code and Energy Efficiency in Existing buildings. Since such estimates for the

State is not readily available, the same has not been considered in this report.

The analysis in this report is based on the number of installations as existing on

31.3.2008 and therefore new additions of installations during the coming years is

not considered. If the new installations were also considered the potential for

energy savings would be still higher. The potential savings from various options as

indicated above are discussed below:

A. DSM through CFL:

The use of CFL in domestic and commercial establishments has huge potential

for savings electricity. The details of the pilot scheme carried out in Nasik,

Maharashtra, are furnished below:

The Maharashtra State has taken up a pilot project of replacing existing 3.8 lakh

nos. of incandescent & Tube lights by CFLs in Nashik area. Recently, Prayas had

carried out the monitoring of the implementation of the above scheme in

Maharashtra. The participation in the scheme by consumers was voluntary and

at an average 4 CFLs was sold per participant. The failure rate of CFLs was 41% in

urban areas and 74% in rural areas. It was also noticed that failure rate of a

particular company ie the company that sold maximum CFLs] was 54% and that

of other company was 12%. Further, the power factor was around 0.5. However,

the report indicates that BEE would specify the power factor to be at 0.85. As per

the report furnished by Prayas, it is noted that replacement of lights in both urban

& rural areas by 3.8 lakhs CFLs has resulted in annual energy savings of 12 to 16

MU and peak savings of 7-9 MW. The savings per CFL was 2.5 to 3.4 units/month

and peak savings was 18.2 Watts to 23.3 watts per CFL. Even though, BESCOM

had carried out a similar exercise under BELP, it is yet to come out with results of

this exercise.

It is worthwhile here to note that GoK vide its notification No. EN 396 NCE 2006

dated 13.11.2007 has made mandatory use of CFL in Government

buildings/Government aided institutions/Boards/Corporations. However, strict

monitoring of the implementation of the above order is required to achieve the

potential savings.

In view of the above study, it is noted that there is potential to save peak/energy

by adopting CFLs in domestic as well as commercial sectors in Karnataka State

also.

The possible potential for savings in Karnataka is discussed below:

a. Bhagya Jyothi (BJ)/ Kutir jyothi (KJ) installations:

These installations are one-outlet installations, which are provided to Below

Poverty line (BPL) families. The entire BJ/KJ installations are subsidized by the GoK

for consumption upto 18 units/month. Considering a 60 W incandescent bulb,

the hours of burning works out to 10 hrs/day. At a tariff of Rs.3.55/unit [as per

TO2005], the GoK is spending Rs. 63.90/ installation/month.

Considering the burning hours as 10 per day and replacing the incandescent

lamp by CFL of 20 W, the daily energy requirement would be 0.2 units and the

monthly requirement would be 6 units/installation indicating a saving of 12

units/month/installation. As a result of above savings the Government subsidy

would come down by Rs.42.60 /installation/month. Further the peak

savings/installation would be 40 W.

As per the DCB furnished by ESCOMs, the number of BJ/KJ installations as on

31.03.2008 is 20,77,727 (20.78 lakhs). This means the potential for overall annual

energy savings would be 299 MU and the GoK would save subsidy amount to an

extent of Rs. 106.15 Crs. annually. Further, the overall peak savings would be 83

MW.

However, the GoK has to bear the cost of replacement of CFL. At average cost

of Rs.100/CFL, the cost of replacement for 2077727 installations would be Rs.

20.78 Crs. Assuming a failure rate of 25%, the cost to be incurred by GoK would

be 1.25x 20.78= Rs. 25.98 Crs.[Say Rs.26 Crs.]. The net savings to GoK would be

[106-26= Rs.80 Crs annually]. This means the investment would pay back in 4

months.

As far as the ESCOMs are concerned, the savings of 299 MU would be available

to sell to other paying Consumers under the shortage situation. This would result in

increased revenue to the ESCOMs.

b. Domestic Installations:

The number of Domestic installations as on 31.3.2008 was 95,80,546. Even though

some of the households are using CFL the exact no. is not known. Hence, it is

assumed that at least 50% of the above installations have a potential for using

CFLs. With 4 CFLs/installation, the total CFLs required would be 19,16,1092.

Considering the savings per CFL as per Prayas report, the potential for overall

annual energy savings at 3units per month would be 689.80 MU and at 20 watts

per CFL, the peak saving potential would be 383.22 MW. The investment required

would be Rs. 191.61 Crs at Rs.100/CFL. Considering the average realization rate

in FY08 of Rs.3.43 per unit, the cost of saved energy would be 236.60 Crs. and the

pay back would be 10-months.

As far as ESCOMs are concerned, the savings of 689.80 MU would be available

to sell to other paying Consumers under the shortage situation.

c. LT Commercial Installations:

The number of LT commercial installations as on 31.3.2008 was 12,25,975. Even

though most of the commercial installations in urban area are using CFL the

exact penetration is not known. Hence, it is assumed that at least 25% of the

above installations have potential for using CFLs. With 4 CFLs/installation, the total

CFLs required would be 1225975. Considering the savings/CFL as per Prayas

report, the potential for overall annual energy savings at 3units/month would be

44.14 MU and at 20 W/CFL, the peak saving potential would be 24.52 MW. The

investment required would be Rs. 12.26 Crs. Considering the average realization

rate in FY08 of Rs.3.43 per unit, the cost of saved energy would be 15.14 Crs. and

the pay back would be 10 months.

As far as ESCOMs are concerned, the savings of 44.14 MU would be available to

sell to other paying Consumers under the shortage situation.

Note:

1. In the above cases the cost of CFL is considered at Rs.100/CFL. However, Bureau of Energy

Efficiency [BEE] under Bhachat Lamp Yojana Scheme is planning to provide CFLs to

domestic consumers for about Rs.15/lamp. Price reduction is contemplated by using CDM

through which CFL suppliers would earn Certified Emmission Reductions (CERs) on the CO2

emmission reductionsthat would occur due to reduced CFL consumption. If Rs.15 is

assumed, the pay back period would be still less.

2. There is potential for some of the small & medium commercial installations to switch over to

SPV systems, which is not considered in this report.

3. BEE has estimated that replacement of 400 million incandecscent bulb by CFL would

reduce CO2 emission by 24 million tons annually. Thus the replacement of about 22 Million

lamps by CFL as envisaged above would reduce CO2 emissions by 13.2 Lakh tons every

Year.

B. DSM through Installation of PV Street lighting systems:

The number of street lighting installations in the state as on 31.03.2008 is 78724

and the energy consumed was 593 MU. All these installations are fed from the

grid. Even though grid connectivity may be required for streetlights in certain

specific areas, there is a potential to switch over to solar SPV systems, especially

for providing streetlights in rural & TMC areas. Assuming that 25% of the existing

installations could be replaced by SPV systems, the potential for energy savings

would be about 148.25 MU annually. Considering 2.87 kW/installation [BESCOM

tariff Order 2007], the peak savings would be 57 MW.

The cost of each street light system would be around Rs.26, 000/-[Source KREDL

website]. Thus the cost for replacing 25% of the installations would be 51.17 Crs.

Considering the average realization rate in FY08 of Rs.3.43 per unit, the cost of

saved energy would be 50.85 Crs. and the pay back would be 12 months.

The summary of savings from replacement of CFL in the above 3-cases and SPV

for street lighting is indicated below:

Table-4

Potential for savings through CFL & SPV street lighting

Category Energy

Savings-

MU

Peak

Savings-

MW

BJ/KJ 299 83

Domestic 690 383

LT-Commercial 44 25

Street Lighting 148 57

Total 1181 548

The above savings are at the Consumer end. Therefore considering the loss of

26% in FY08, the savings at generation bus would be 1596 MU and 741 MW

respectively.

Note: The above peak savings due to lighting systems would reduce the evening peak.

C. DSM through use of Solar Water Heaters [SWHs]

Electricity is being used for heating water both in households as well as

commercial establishments like hotels/restaurants. Electricity being a secondary

source of energy, the usage of electricity for heating purposes is not economical

& efficient. Therefore, it is essential to use alternative sources for heating water.

One such source is the Solar Water Heaters (SWHs).

It is worthwhile here to note that GoK vide its notification No. EN 396 NCE 2006

dated 13.11.2007 has made the use of SWHs mandatory in industries requiring hot

water for process, Hospitals & nursing homes including Government hospitals,

Hotels, Motels, Banquet halls and guest houses, jail barracks & canteens, housing

complex set by group housing societies/housing boards, all houses built on 600

sq.ft floor area or site area of 1200 sq.ft falling in the limits of Municipal

committees/corporations and BDA sectors, all government buildings, residential

schools, educational colleges, hostels, Technical/vocational education institutes,

district institutes of education and training, tourism complexes and universities,

community centers, kalyan mantaps etc. Further, in the said Notification it was

directed that all departments should amend the byelaws/rules within two months

to make use of SWHs mandatory. However, strict monitoring of the

implementation of the above order is required to achieve the desired objective.

a. Potential savings in Domestic Sector:

KREDL has estimated that a 100-litre capacity SWH would save 1500 Units of

electrical energy and can contribute 1 kW of peak shaving. Depending upon

the family size & usage, 100-300 litres capacity SWHs are suited for domestic use.

Thus considering an average capacity of SWHs of 150 litres, the savings per

household would be 2250 units/year and peak savings would be 1.5 kW.

Mostly electric water heaters are used in urban areas and therefore the number

of urban households needs to be established. For the current study it is

estimated based on the census 2001. As per the census 2001, the urban

population in Karnataka during 2001 was 179.19 lakhs out of the total population

of 527.34 lakhs. Thus the percentage of urban population is approximately 34%.

Thus it can be assumed that out of the total domestic installations 34% are urban

installations. That means, as on 31.3.2008, the Domestic installations in urban area

would be 32,57,385. As per KREDL, so far 5 lakh SWHs have been installed in the

State. Thus the remaining 27 lakhs urban households could be brought under

SWHs . The estimated potential savings in energy is as indicated below:

Table –5

Potential for savings in Domestic sector by using SWHs

Particulars Savings/household Total savings

Energy savings 2250 units 6075 MU

Peak Savings 1.5 kW 4050 MW

Note: KREDEL has estimated that in Ban galore alone 2000 MW is consumed for water heating during morning hours.

The cost of each SWH would be around Rs.30, 000/-. Thus the cost for replacing

the installations with 27 lakh SWHs would be 8100 Crs. Considering the average

realization rate in FY08 of Rs.3.43 per unit, the cost of saved energy would be

2084 Crs. and the pay back would be 47 months.

b. Potential Savings in Commercial Sector

KREDL has estimated that 4 lakh litres of SWHs may be installed in hotels, hostels,

industries and hospitals in the State. Assuming that the savings of energy and

peak is similar to household installations, the potential savings would be as

indicated below:

Table –6

Potential for savings in Commercial sector by using SWHs

Particulars Savings/household (For 150 liters capacity)

Total savings

Energy savings 2250 units 6 MU

Peak Savings 1.5 Kw 4 MW

Thus the use of SWHs in Domestic and Commercial sector would reduce the

overall requirement as indicated below:

Table –7

Potential for savings in Domestic sector & Commercial sector by using SWHs

Particulars Savings

Energy 6081 MU

Peak 4054 MW

Note: Use of SWHs would reduce the morning peak and do not contribute to reduce

evening peak.

The above savings are at the Consumer end. Therefore considering the loss of

26% in FY08, the savings at generation bus would be 8218 MU and 5478 MW

respectively.

D. DSM through use of efficient Water Pumping systems:

There is huge potential for saving energy in both agricultural pumping systems &

Municipal Water supply systems, which is discussed below:

a. Pumping in Agricultural sector

The irrigation pump sets consume approximately 30-35% of the input

energy in the State. These installations are not metered and the

consumption is estimated. Further, with free power, these installations use

the electricity most inefficiently. The owners of the IP sets does not bother

for energy conservation as long as the supply is free and therefore the

onus of energy conservation in this sector mainly depends on the

initiatives of ESCOMs & the GoK. By adopting efficient pumping system

utility benefits in terms energy saved. GoK would benefit from reduced

subsidy burden.

One of the apprehensions for taking up Agricultural—DSM is that, even

with efficient system the farmers may pump extra water and supply it to

others. In order to overcome this difficulty, the subsidy should be targeted

ie for each IP set the GoK should provide subsidy for ‗x‘ units and beyond

‗x‘ units, the framers have to pay. The other approach would be to have

limiters, which would limit the supply to a predetermined level of

consumption. However such limiters should not be accessible and should

be in built in the meter or the transformer supplying the IP set.

Studies indicate that IP set consumption can be reduced by 30-40% by

using good quality, properly matched pump & pumping system. It is also

estimated that further savings of 15-25% is possible with judicious use of

water. [Ref: ―Towards an efficient and low cost power sector‖, Draft chapter on

energy prepared for Narmada valley Task Force, Appointed by Governmsnt of

M.P. By Girish Sant & Shantanu Dixit published in September 1998]. Thus there is

an overall potential to save about 55% to 65% of energy in this sector.

The estimated consumption of IP sets in Karnataka in FY08 was 11480 MU.

Assuming that at least 25% of the savings is possible using low cost

retrofitting options like metering, use of capacitors, properly rewound

motors, use of efficient footwalls etc., the savings that would occur is 2870

MU annually. One study has estimated that 5% reduction of IP set

consumption is possible due to metering alone (Nadel et.al 1991). The

Cost of retrofitting is estimated at Rs. 30,000/- per IP set. The average

consumption per IP set in the State is about 6539 units/year and the

savings per IP set at 25% would be 1635 units. At the average realization

rate of Rs.3.43/unit, the cost of saved energy would be Rs. 5608/-per year

/IP set. Considering retrofitting cost of Rs. 30, 000/- per IP set, the payback

would be 5.3 Years.

It is to be pointed out here that GoK vide its notification No. EN 396 NCE

2006 dated 13.11.2007 has made mandatory use of ISI marked pump sets,

power capacitor, and foot/reflex valves for all new tube wells. Further,

ESCOMs have been directed to make amendments in load demand

notices for tube wells within 2-months to ensure use of ISI marked pumps in

the State. However, strict implementation of the order is required to realize

the potential savings.

Since, the pump sets are supplied with energy usually during off peak

hours, it is assumed that there would be no peak savings. Considering

average realization rate of Rs. 3.43/unit, the energy savings of 2870 MU

achieved in the State would result in reduction of subsidy support of Rs.

984 Crores on account of free power to IP Sets.

b. Water Pumping by Water supply Boards

Municipalities supplying water to end users in India have potential to

improve their efficiency in pumping by 25% [CII estimates Ref: Alliance to

save energy- Water Case Study –Vizinagaram, India]. Further, 40-60% of

the budget for these municipalities is attributed to energy costs and 30-

40% is lost through water leakages and unaccounted use. Thus there is a

potential to save energy in water pumping systems.

Studies indicate that low cost/no cost options like surrendering excess

demand, maintaining good PF, improving water flow distribution,

rescheduling pumping operations and improving pumping efficiencies

can save 15% t0 20% of energy with a payback less than an year. Further

capital intensive measures like replacing pipelines and impellers, installing

Energy efficient motors and replacing energy inefficient old pumps by EE

pumps would further improve savings, however with a longer payback

periods. Energy efficiency improvements with carbon financing is an

important catalyst for sustainable development.

The State of Karnataka has 208 municipalities that are facing energy and

water shortages [Source: Energy Efficiency improvements in Muncipal

Water Utlities in Karnataka, India, Project Design Document prepared by

Quality Tonnes, Jan 2004]. Envisaging the huge potential, GoK has

initiated action in this regard. In this regard GoK has issued two policies in

2006[Source: Alliance to save energy- Watergy Case study, Karnataka,

India, funded by USAID]. One policy mandates 6-ULBs [namely Hubli-

Dharwad, Mysore, Bellary, Belguam, Gulburga & Mangalore towns] to

undertake energy efficiency projects that will generate carbon financing

from World Bank under the Carbon Fund. KUIDFC has been made the

nodal agency to consolidate carbon revenues and to transfer them to

ULBS. Alliance Watergy taken up five of the above towns as

demonstration towns. It is noted from the UNFCC website that Project

Design Document is already submitted for 5- municipalities of Mysore,

Mangalore, Hubli-Dharwad, Bellary and Tiptur –Arsikere. It is estimated that

annually around 21,100 Tonnes of CO2 gets reduced from the above

project implementation.

The energy audit carried out in 4-towns by Alliance in partnership with TERI

has estimated annual savings of 8.2 MU with limited financial investments.

The second, GO No.UDD 14 SFC 2006 was issued by the GoK to implement

energy efficiency programs in 14-ULBS, by segregating energy bills from

others in the State to allow these ULBs to collect the revenues from energy

savings.

Also, Energy management cells have been established in KUIDFC &

Karnataka Urban Water Supply & Drainage Board.

Though the above initiatives have been taken by GO, it is not known

whether the actual implementation has started. Further, the ESCOMs have

not factored the impacts of such savings in their forecasts. Thus assuming

at least 10% of the savings is realized in the 11th plan period, the amount of

energy saved annually would be 69 MU considering the FY08

consumption of 689 MU in this sector.

It is worthwhile here to note that M/s Alliance have carried out studies for

AP Municipal Bodies for efficient water pumping system. For

Vizianagaram Municipal Council [VMC] it is estimated that $1 million is the

annual savings with an initial investment of $43,500, indicating a payback

of about 1-month. Based on the recommendations VMC has

implemented 8 out of 10 recommendations and has saved 101 MWh of

energy and US $ 63,700 annually. This has enabled VMC to reduce its

annual electricity bill by18% and reduction of 600 M. tons of CO2 annually.

[Source :Alliance to save energy, Watergy (water & Energy) case study,

Vizianagaram, India]. One can expect similar benefits in Karnataka also

once the recommendations of the consultants are implemented.

Thus the total energy savings that could be achieved by improving water-

pumping system is estimated at 2939 MU from the above two sources.

The above savings are at the Consumer end. Therefore considering the loss of

26% in FY08, the savings at generation bus would be 3972 MU. It is assumed

that pumping would be done during off-peak hours and therefore does not

contribute to peak shaving.

The summary of savings possible in Karnataka from the above measures is

indicated below:

Table-8

Summary of peak & energy saving potential in Karnataka

Particulars Peak Saving-MW Energy Saving

CFL program 741 1596

SWH program 5478 8218

Pumping

system

Improvement

program

0 3972

Total 13786

II. Revised requirement for Electricity

If the above measures are put into practice through an effective policy

intervention duly supported by appropriate regulatory interventions by the

Commission, at least 25% of the above potential could be achieved during the

11th Plan. Thus the morning peak could be reduced by 1370 MW. Further, it is

assumed that 5% more saving is possible in the evening peak due to load

shifting of evening loads to fill the reduction in morning peak due to

introduction of the SWHs. Thus, the peak requirement would get reduced by

195 MW[ 1.05x741x25%] and energy requirement by 3447 MU.

Considering the savings as discussed above, the revised requirement in terms

of demand (installed capacity) would be 9925 MW[10120-195] and in terms of

energy it would be 54941 MU[58388-3447] by the 2012.

Further, it is to be pointed out that there is potential to harness captive

generation of about 1000 MW [above 1-MW capacity] during peak times. This

can be done by either connecting the captive generators to the Grid during

peak time or the captive generation could be used by the industry during

peak time to meet their requirement and reduce the burden on the grid.

However, in both the cases the captive generators should be incentivised to

run their generators during peak time. It is worthwhile to mention here that in

Pune, the CPPs are provided with incentive to run there Captive units.

Probably, the model adopted in Pune may be considered [duly considering

the pros & cons], wherein the industries are paid for the energy generated

during peak time. The extra cost would be passed on to the consumers in Pune

area only. The model is as follows:

Cost of diesel generation (say)- Rs.12/unit

HT Tariff to be paid (Say)- Rs-4.50/unit

Additional cost incurred by Industries by running diesel set: Rs.12- Rs-4.50=

Rs. 7.50/unit

Thus the additional cost of Rs.7.50/unit would be reimbursed to the HT

industries by the utility duly collecting the same from the Consumers of the

Pune area only.

Assuming that with policy & regulatory interventions, 50% of the above

capacity would be available during peak time by 2012, the peak

requirement would come down by 500 MW and the energy requirement

by 730 MU [assuming 4 hours/day of operation] at the consumer end.

Therefore, assuming a loss of 26%, the peak reduction would be 676 MW

and energy reduction would be 986 MU.

Considering the contribution from CPPs, the peak requirement would be

9249 MW & energy requirement would be 53955 MU.

3. Availability from Existing and New Stations

1. Peak Availability:

a. Existing Stations:

The existing installed capacity in the State including the CGS share &

Renewable sources is as indicated below:

Table-9

Existing installed capacity

Company Capacity -MW

KPCL* 5509

IPPS 109

NCE sources 1784

CGS share after

accounting for

loss @4%

1480

Total 8882 * Includes BTPS-unit1

For peak availability NCE sources are not considered, as they are infirm in

nature. Excluding the NCE sources and considering the combined availability

of Generator as well as transmission capacity at 85% [after accounting for

auxiliary consumption also] during peak time, the peak availability from existing

stations excluding NCE sources would be 6033 MW [85% of (8882-1784)].

New Stations:

The following new stations excluding NCE sources are envisaged by the end of

11th Plan:

Table-10

Proposed Capacity Additions

Station Capacity- MW

NPH R & M 45

Bellary TPP –U2 500

Raichur U-8 250

Varahi U3 & 4 230

Jindal TPP, Toranagal 600

IPPs outside State ** 125

Nagarjuna TPP* 914

Kaiga U-4 share 59.50

Kundam kulam 442

NLC-ii Expansion** 85

JV TPP of NTPC & TNEB 125

Tuticorn** 244

Simhadri** 175

Total 3794.5

Source: CEA website and SRPC

* Considering the progress made so far, it is assumed that Nagarjuna TPP

would be fully operational in FY-12.

** As furnished by PCKL in reply to Medium term power purchase

requirements

Thus by the 11th plan period additional 3795 MW of installed capacity would be

available. Considering the combined availability of Generator as well as

transmission at 85%, the peak availability from the new stations would be 3226

MW.

Thus the peak capacity available for Karnataka from the existing and new

stations would be 9259 MW.

2. Energy Availability

a. Existing Stations

The energy availability from existing sources is estimated as under:

Table-11

Energy Availability from existing Stations

Company Energy - MU

KPCL – Thermal* 13348

KPCL – Hydro** 11479

KPCL Diesel & wind** 254

IPPS*** 730

NCE sources$$ 3636

CGS $ 10925

Total 40372 * Considering the performance in the past years a PLF of 85% & aux at 9% is assumed

** Based on estimates made by KPCL for FY09

*** Assuming 2 units/day based on daily generation sheets.

$ Based on April 07 to December 07 energy received from CGS

$$ based on April 07 to December 07 energy received

The energy availability from new sources is estimated as under:

Table-12

Energy Availability from New Stations

Company Energy - MU

KPCL – Thermal* @ 85% PLF & 9% auxiliary

consp.

5082

IPPS including Nagarjuna TPP @ 85% PLF &

9% auxiliary consp.

11106

NCE sources$$ 3636

CGS @ 85% PLF & 4% loss 8081

Total 27905 Note:

1. Even though the capacity of varahi plant goes up by 230 MW, there would not be any additional

energy generated as it is used as peaking plant. Therefore the PLF would come down by 50%. Hence

no additional energy is anticipated from Hydel sources within the State.

2. It is estimated that by 2012 the NCE Capacity addition would be around 1734 MW ie the existing

capacity gets doubled. Therefore the energy available from NCE sources would also double and

therefore the additional energy available from New NCE sources is estimated ast 3636 MU.

Thus the new sources would add 27905 MU by the end of FY12. Considering the

existing sources, the total energy available would be 68277 MU.

4. Estimation of surplus/deficit:

With the estimated peak requirement of 9249 MW and availability of 9259

MW, there would be no peak shortage by the end of 11th Plan.

The peak requirement and availability is summarized below:

Table-13

Peak Requirement & Availability

Particulars MW

Estimated Peak 10120

Reduction due to DSM & Energy

Conservation

195

Reduction due to Captive Contribution 676

Revised peak requirement 9249

Availability from existing & new sources 9259

Surplus/(-) deficit 10

Similarly, considering the estimated requirement of 53955 MU and availability of

68277 MU, there would be surplus of 14322 MU. Assuming that the hydro

availability due to bad monsoon is half of what is estimated above, the

availability in FY12 would come down by approximately 6000 MU. In spite of that

there would be surplus of about 8322 MU.

The energy requirement and availability is summarized below:

Table-1

Energy Requirement & Availability

Particulars MU

Estimated Energy requirement 58388

Reduction due to DSM & Energy

Conservation

3447

Reduction due to Captive Contribution 986

Revised peak requirement 53955

Availability from existing & new sources 68277

Surplus/(-) deficit 14322

5. Conclusions

It could thus be concluded that by adopting and implementing DSM & Energy

Efficiency measures as discussed above in addition to capacity addition,

Karnataka would be energy surplus State by 2012 (after considering the

anticipated new projects) and there would be no peak shortage. Various

financial options like subsidy by GoK, Financing through CDM, sharing of profits

due to energy savings, funding through capex etc may have to be explored for

implementing DSM & Energy efficiency measures, so as to ensure optimal

benefits to all stakeholders. Further, 3447 MU of savings through DSM & Energy

conservation during the 11th plan, would reduce the CO2 emission by about 3.0

Million Tons/year, based on 0.85 tons/MWh as per Carbon baseline data for

southern region published by CEA in 2007.

-0-

References:

1. Energy Efficiency Improvements in Muncipal Water Utilities in Karnataka,

India, Project Design Document- Quality Tonnes, January,2004

2. Implementing End Use Efficiency in India: Drawing from experiences in the

US and other Countries, Jayant A Sathye etl,Lawrence Berkely Laboratory

& S.Padmanabhan, USAID,20 April 2006.

3. DSM Best Practice Guide- ECO II-USAID/IIEC, September, 2005

4. Towards an efficient & Low cost power sector- Prepared for Narmada

valley task force, Appointed by Government of M.P.- Girish Sant &

Santanu Dixit,

5. The Action Plan for Energy Efficiency- BEE, MoP, GoI

6. Watergy Case Study-Vizianagaram, India- Alliance to save energy, April

2005

7. Watergy Case Study-Karnataka, India- Alliance to save energy, October

2006

8. 17th EPS, CEA, March 2007

9. Load Generation Balance report for 2008-09, CEA, June 2008

10. MYT Order, KERC, January 2008

11. GoK Notification No. EN 396 NCE 2006 dated 13.11.2007

12. Southern Regional Power Committee letter dated 21.08.2008

13. KPTCL letter dated----

14. KPTCL daily generation sheets

15. KREDL website www.kredl.kar.nic.in

16. CEA website www.cea.nic.in

17. KPCL website www.karnatakapower.com

18. KPTCL website www.kptcl.com