Estimation of Potential and Value of Demand Response for Industrial and Commercial Consumers in Delhi

Demand response (DR), especially from larger commercial and industrial consumers, can significantly contribute towards improving India’s grid reliability. The industrial and commercial consumer’s share of the total electricity consumption is 40%–50% for most electricity utilities in India. Automated DR (a form of DR that uses advanced metering infrastructure and automated signals between utilities and consumers) can efficiently enable these consumers to shed or shift their loads when electricity prices are high, or during times of scarcity, providing not only financial benefits for themselves, but also benefits to utilities, system operators, and other consumers. Estimating both the technical and economic potential of automated DR can enable regulators and utilities to design appropriate policies and incentives for consumers, and for system planners to consider DR as a dependable capacity resource. Using data and analysis from a DR pilot program conducted by the Tata Power Delhi Distribution Limited (TPDDL), we estimated the potential of DR for industrial and commercial customers in the state of Delhi. Further, we valued DR assuming various potential savings opportunities for utilities that include avoided high-price wholesale day-ahead market purchases, reduced unscheduled interchange exchanges during low frequency-high penalty periods, and avoidance of generation from expensive marginal generators.