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Demand aggregation Energy event

‘Demand aggregation’ could promote uptake of clean energy in residential societies, small and medium industries, say newly released studies

NEW DELHI (January 29, 2020) —For India to achieve its 100 GW solar energy target in just two years, by 2022, and to emerge as a leader in climate action, it needs to prioritize solar rooftop photovoltaic (PV) among two key users – residential buildings and the industrial sector. A ‘demand aggregation mechanism’ could help accelerate energy efficiency and scale up the deployment of solar power in residential apartment complexes and in Micro, Small and Medium-scale Enterprises (MSME) in the nation, two newly-released papers studying clean energy pathways highlighted on Wednesday.

The reports, ‘Assessing Clean Energy Opportunities Through Demand Aggregation in Bengaluru’s Apartment Buildings’ – a working paper by World Resources Institute India (WRI India) and Technology Informatics Design Endeavor (TIDE) and, ‘Implementing Demand Aggregation for Rooftop Solar Systems in Micro, Small and Medium-Sized Enterprise Clusters’ – a practice note by WRI India; are based on case studies in Bengaluru’s fast-developing residential hubs, and the industrial clusters of Gujarat and Maharashtra, respectively.

The ‘Assessing Clean Energy…’ paper is based on research conducted in 10 existing residential apartment complexes in Bengaluru between June 2017 and December 2018, which uncovered that significant energy consumption was built into the provision and maintenance of the ‘common area facilities’ of such complexes. Common areas include public areas in residential societies, like building compounds, playgrounds, gyms, society offices, floor landings, etc. Residents in apartment complexes use these common services that run on electricity. In a way, common services represent “aggregated demand’’ for energy in the complex. Since these services are managed by a collective of residents – the Apartment Owners’ Associations (AOAs, as referred to in Bengaluru) or Residents’ Welfare Associations (RWAs, in Delhi) or housing societies (in various other cities) – there are opportunities for these entities to introduce solar energy generation and energy efficiency measures in common areas.

During the study, TIDE and WRI India worked with 10 AOAs. To get a broader perspective on the barriers to implementing clean energy projects in apartment complexes, the study also engaged with EE and solar rooftop vendors and service providers, through semi-structured interviews, meetings and interactions on different platforms. The analysis showed that AOAs or similar residents’ groups could play a major role in ensuring the uptake of rooftop solar in residential complexes in cities like Bengaluru.

Sumathy Krishnan, Executive Director, TIDE, a Bengaluru-based not-for-profit, said, “Today, Bengaluru, an IT hub has experienced rapid inward migration from highly-skilled Indian professionals.  Apartment buildings are quickly emerging as housing choices in this land-constrained city, with developers providing water, power, safety and exclusive access to premium amenities within gated complexes. This study has identified gaps, barriers and opportunities in moving to clean energy for apartments.” Highlighting the national relevance of the paper in a rapidly urbanizing India, Ms Krishnan said, “While exact requirements may differ, this growth in housing demand and broadly the ecosystem is true for cities across India – from megacities like Delhi and Mumbai to the newly emerging two- and three-tier Smart Cities. 

Sumedha Malaviya, Manager, Energy, WRI India, added, “Besides clean energy implementation, a combination of energy efficiency measures and on- or off-site solar PV installation could be a powerful tool for tackling building-related emissions. Working with society associations and residential groups is a clear way forward in ensuring their uptake.” She pointed out that challenges in adopting Solar PV by residential complexes could crop up in form of management, policy and information barriers, and said, “Overcoming these barriers can ensure that demand aggregation for clean energy in apartment complexes becomes possible.”

The paper made a few broad recommendations:
-Compulsory maintenance of complete and comprehensive records by the AOAs
-Training and capacity building
-Enabling policies to encourage clean energy interventions
-Promoting technology through targeted interventions.

The WRI India practice note on solar uptake in MSMEs, ‘Implementing Demand Aggregation …’ studied industrial clusters in Ahmedabad, Gujarat and Aurangabad, Maharashtra to reveal that demand aggregation implementation can be an effective way to scale up on-site solar PV generation in geographical or common-purpose MSMEs clusters. About 140 industries (70 at each location) participated in this project, with the Ahmedabad cluster comprising 700 and Aurangabad 1500 MSMEs, approximately.

Today, limited empirical data exists to inform policy and guide practise on energy usage and demands (including renewables), within MSME clusters. The practice note consolidated learnings from a 2014 report by WRI India and the Confederation of Indian Industries (CII) and provided insights from the recently conducted on-ground implementation.

Based on the learnings, the practice note recommended:
-The need for a facilitator as a technical and sector expert
-The involvement of industrial associations to increase the credibility of the process
-Regular follow-ups from vendors and associations to keep industries motivated

“Industries are among the top energy consumers in India, and hence, also an important target for on-site solar implementation. While large companies can drive clean energy measures, MSMEs lack the leverage in terms of ability to influence renewable energy developers, energy-efficient technology providers and financing institutions. Most MSMEs today meet their energy requirements through fossil fuels. Since they contribute to more than 28 per cent of India’s GDP, it is important to promote and scale-up solar uptake in this sector through different business models like demand aggregation,” said Ms Kajol, Manager, Energy Efficiency, WRI India.

The Gujarat and Maharashtra case studies showed that a large number of individual (MSME) participation in a demand aggregation project, at both local and association level, can lead to large scale RE potential in the sector. The survey also highlighted that 40 per cent participants saw the potential for cost reduction as a driving force to invest in Solar PV, while almost 60 per cent mentioned the criticality of having technical support from a third-party partner like WRI India. Summing up, OP Agarwal, CEO, WRI India, said, “India has made global commitments to reduce GHG emissions and shift to a clean energy pathway by 2022. The industrial sector and residential buildings are the most energy-intensive end-users today. By promoting energy efficiency and scaling up rooftop solar deployment among these two groups that form the demand side of the energy spectrum, we expect to multiply the benefits of the supply-side efforts by the government. Our research backs our belief that sustained efforts based on aggregating their demand can support the ambitious transformation toward a low-carbon economy.”

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