PRESENTATION ON

ENERGY SUPPLY SIDE AND DEMAND SIDE MANAGEMENT

SUBMITTED BY
AJAY SHAH (076MSESP001)
BHUWESH PANT (076MSESP002)
GAURAV SAPKOTA (076MSESP003)
NARESH MANANDHAR (076MSESP004)

DEPARTMENT OF MECHANICAL ENGINEERING

PULCHOWK CAMPUS

SUBMISSION DATE : 2077/10/26

 Energy Potential in Nepal

➢The present energy supply resources in Nepal are :

Traditional biomass : Fuel wood, agricultural residue, animal dung cake
Commercial : Petroleum products, coal & grid electricity
New renewables : Bio-gas, solar, off-grid mini & micro hydro

➢ Very little of Nepal’s high hydropower potential has been utilized for
electricity production.

➢Nepal has become dangerously dependent on oil imports to meet its energy
requirements.

➢Nepal Electricity Authority (NEA), Nepal Oil Corporation (NOC) and

Alternative Energy Promotion Center (AEPC) are the major government
agencies in the development of power sector, import & distribution of
petroleum products, and promotion & development of renewable energy
technology respectively.
 Available energy generation in Nepal
➢ In the Fiscal year 2076/077, the total installed capacity of NEA including IPP is about 1333 MW.

• Total Major Hydro(NEA)-Grid Connected 577,394 KW

• Total Small Hydro(NEA)-Isolated 4,536 KW
• Total Hydro(NEA) 581,930 KW
• Total Hydro(IPP) 696,168.40 KW
• Total Hydro(Nepal) 1,278,098 KW
• Total Thermal(NEA) 53,410 KW
• Total Solar(NEA) 1350 KW
• Total Installed Capacity(NEA & IPP)-Grid 1,328,322.40 KW
• Total Installed Capacity 1,332,858 KW

➢ AEPC, with support from development partners and other stakeholders, has been able to generate
electricity, mostly in off-grid rural areas, through renewable energy resources.
• Mini/Micro hydro : 32159 KW
• Solar/Wind Mini grid system : 563 KW
 Access Energy Scenario

➢Presently, electricity access through RE (Solar and Micro hydro) is

6.25+3.5=9.75%, taking NEA grid access to 77.8% and total electricity
access is 87.55%. Hence, 12.45 % population lacks electricity access.
Nepal Sustainable Development Goal
 Situation of Energy Supply system in Nepal

➢The power supply situation was plagued with a lack of generation

capacity, but several generation projects carried out recently have
resulted in considerably improved power availability.

➢The electricity supply has been growing significantly, with large

investments in new generation capacities and increasing electricity
imports from India.

➢AEPC will predominantly work in the areas of Energy Efficiency, Utility

Scale Grid Connected Solar PV System, Large Biogas, and Waste to
Energy Projects ensuring proportionate and reliable energy mix.
 Energy trade & Possible benefit in Nepal

➢At present, the power market is multi seller (IPPs) and single buyer. As the
government – owned utility, Nepal Electricity Authority has been signing
long term agreements with the IPPs and short term power contracts with
India.

➢Through cross boarder electricity trading, seasonal generation shortage in

hydro power dependent countries like Nepal, which can be offset from
other South Asian countries.

➢There is no value of producing high amount of power if there is no

sufficient consumption. Due to this reason, NEA now has brought the idea
of electric vehicle and induction cooking and also encouraging the
consumer to use electricity as much as they require
 Demand Side Management

➢Demand Side Management (DSM) is one of the fundamental up-to-date solutions

to manage electricity consumption in the developing world of insufficient
electricity capacity, increasing fuel costs and problems of environmental pollution.

➢ DSM provides measures to reduce consumption and expenses.

➢ Energy demand side management includes activities made by end-users to modify

their consumption in a best possible way for both utility and the customers.

➢Demand Side Management is made through implementation of activities in order

to produce the desired daily, monthly or seasonal load curves.

➢DSM does not necessarily lead to decrease in the total energy consumption.
➢For utilities, DSM means avoiding or delaying the need to invest in new capacities,
improving the power quality, ensuring efficient generation, transmission and distribution
of energy.

➢For the residential customer, it means reduced bills and taking advantage of the financial
incentive provided by utility company.

➢For commercial and industrial customers, it means lower costs included in their products
price, making them more competitive on the market.

➢DSM gives the customer a new role and freedom in shifting the demands to off-peak
periods to reduce the electricity bill, whereas providing lower costs per kWh to the utility.

➢DSM can be achieved through energy efficiency by reducing energy consumption on one
hand and on the other hand by managing the load demand itself.
 Implementation of DSM

1) Valley Filling
➢ This method is applied in order to change load curves so as to obtain greater load
factors in predefined time margins.
➢ With this method, utility can increase its profit even after decreasing the costs per
kWh of energy for customers.
➢ Greater demand in off-peak hours is achieved by encouraging end-customers to
spend energy with paying lower tariffs.

2) Load Shifting
➢ With this DSM technique, the part of demand is shifted from peak to off- peak
hours.
➢ Customers are encouraged for this by cheaper tariff in off-peak hours.
3) Peak Clipping
➢ This DSM Technique is also aimed at decreasing the demand during peak hours.
➢ This is mostly implemented when the installed capacity is not enough to cover the
peak demand.

4) Energy Conservation
➢ This is also implemented when the installed capacity is not enough to cover the
demand.
➢ The overall energy consumption is decreased by using more efficient devices and
appliances.

5) Load Building Technique

➢ This technique is useful if some utility has surplus capacity or available energy to
sell with lower costs per kWh.
➢ It is achieved by encouraging customers to spend electrical energy by providing
several incentives.
➢ There are instances when power utilities provided customer with electrical
appliances at the places where it was desirable to maintain power system
capacities.
6) Direct Load Control
➢Direct Load Control programs apply to appliances that can be turned
off or cycled for relatively short periods of time.
➢The most common applications are domestic air-conditioners, water
heaters and swimming pool pumps.

7) Smart Metering and Appliances

➢Real time pricing can be implement by the use of smart metering and
appliances.
➢Greater price differentials between high and low cost periods could
result in greater shifts of energy usage.
Steps to implement DSM
 BENEFITS OF DSM
1. Benefits for supply industry / utility

• Reduction in customer bill

• Reduction in new power plant, transmission and distribution network

• Stimulate economic development

• Creating new long job opportunities on innovation and technologies

• Reduction in air pollution

• Improving operating efficiency and flexibility

• Improving load factor

 BENEFITS OF DSM
2. Customer benefit
• Satisfy electricity demands
• Reduce / stabilize the cost
• Improve the value of service
• Maintain / improve life style and productivity

3. Social Benefits
• Reduce environmental degradation
• Conserve resources
• Protect he environment
• Maximize customers welfare
Scope of DSM
 History of Demand Side Management in Nepal

➢ The first work on DSM in Nepal was conducted by eletricite de France (EdF)
which was “A study on load curve analysis”, to identify the potential for load
management in the country.

➢ Due to poor historical studies and programs, up to early 2004, NEA had not
considered DSM as a cheaper and faster way to meet its rapidly increasing
peak demand.

➢ Rather, it focused on supply side investment. Consequently, there is an urgent

need to identify the most cost-effective areas for DSM programs which will be
able to mitigate Nepal’s power shortages.
 Why DSM is required in Nepal ?

➢ In order to limit the import of fossil fuels and lessen the tradition fuels
and to meet the growing future demand of electricity, installation of new
hydropower plants or thermal plants or solar plants seems inevitable in
the near future or increase the import from India.

➢ With proper modality of DSM, the reliability of supply will also be

increased with a flat load curve through peak clipping and valley filling
which is again what NEA is striving hard to achieve.
 Potential of DSM

➢ The demand growth is inevitable. Hence, the demand growth should be

controlled in such a way that the demand does not surpass the supply.

➢ Looking towards current trend, we are only focused on generation issues but not
on distribution system, although certain initiatives have been taken recently in
perspective of Demand Side Management.

➢ DSM and end use Energy Efficiency (EE) can have a significant impact on energy
savings and bringing down the peak demand.

➢ Demand-side resources can avoid, reduce or postpone investment in generation,

transmission and distribution capacity, and decrease fuel consumption, improve
environmental quality, and reduce emissions of damaging greenhouse gases that
cause the global warming.
 Ways of Implementing DSM technologies in Nepal

➢Reactive power pricing for industry : most of the industries uses inductive loads in their
plants which eventually consumes large amount of reactive power contributing the huge
amount of power loss

➢Installation of Capacitor banks for intelligent motor controllers : reactive power needed
by industry would be supplied by capacitor plants located at their own side and thus
improves power factor

➢Promoting Energy Efficient Lamp & appliances in residential & commercial sectors : high
efficiency Light Emitting Diodes (LED) Lamps in place of Incandescent Lamps

➢Seasonal Tariff : major portion of generating station in Nepal is renewable energy

resources having seasonal variation of output from their plant, such as there is high
generation during rainy season and less during dry season. Thus, seasonal tariff would
motivate people for efficient consumption of electricity.

➢Tariff Management : utilization of TOD tariffs

 Nation Policy towards DSM Implementation

➢The government needs to push the DSM as a “supply resource” as similar to the
supply side management and hence collectively focusing on the Integrated
Resource Planning.

➢For this, the utility and the nation must invest in DSM.

➢Nepal today is in a desperate need for an energy efficiency policy under whose
wider scope DSM can be implemented.

➢The government, utility and the end user must work in close co-ordination in
developing and implementing the necessary policies, regulations and institutional
framework in order to narrow the gap between the supply and demand of
electricity in the nearing future through appropriate DSM model.
 DSM achievement in Nepal

➢NEA with cooperation from consumers brought down the load

shedding crippling the nation for a decade to an end. Now, NEA has
shifted its dedication to supply safe, reliable and quality electricity to
its consumers.

➢The end to load shedding through integrated resource planning

including domestic generation, imports and efficient demand side
management has culminated in achieving the long-standing goal of
becoming self-sufficient in electricity generation and supply system.
 Challenges of DSM
➢Lack of ICT Infrastructures such as smart meters, communications,
control methods and information technologies.

➢Lack of understanding of the benefits of DSM solutions regarding

quantification of costs and benefits hinders the approach of DSM.

➢DSM based solution tend to increase the complexity of the system

operation when compared with traditional solutions.

➢Skewed tariff ranging from low tariff to domestic consumer to very

high tariff to the industrial consumers.
 Conclusion
➢Nepal is necessary to focus on the supply side by integrating
alternative means of power generation, such as renewable energy
generators, having a relatively low levelized cost of energy.

➢Demand Side Management programme can lead to sustainable

development of the country with appropriate and effective use of the
available source and reduce the Green House Gas emission.

➢Hence, there must be balance between supply and demand, so that

the energy system of the country can run smoothly.
References:

1. NEA : A Year in Review-Fiscal Year 2019/2020

2. AEPC : A Year in Review F/Y 2075/76(2018/19)

3. Demand Side Management for Electricity in Nepal: Need analysis using LEAP Modeling
Framework Suman Shrestha1, Amrit Man Nakarmi2, Proceedings of IOE Graduate Conference,
2015

4. Demand Side Management in Industrial Sector of Nepal, Khem Gyanwali, Tri Ratna
Bajracharya/ Department of Mechanical Engineering, IOE, Central Campus, Pulchowk, Tribhuvan
University, Nepal

5. Strategizing Demand Side Management on Residential Sector of Nepal and its Impact on
Electricity Planning, Gaurab Singh Hamal, Jagannath Shrestha, Ajay Kumar Jha

6. Demand side management in Nepal, Ming Yang, Energy Economics and Technology, 12 Kiah
Street, Glen Waverley 3150, Victoria, Australia