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Demand side management

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Demand side management

  1. 1. DEMAND SIDE MANAGEMENT (DSM) & ENERGY EFFICIENCY (EE) ROHIT GARG BRPL
  2. 2. Defining Demand • Amount of a particular good or service(Here electric power, for consumption by electrical loads to do work) which consumers are willing and able to buy at different possible prices. Demand of consumers is on electric grid. • Law of Demand :Consumers buy more quantity of a good ( power ) when its price decreases(off peak hrs) and less when its price (peak hrs) increases. TOD tariff for example. • Many things determine the quantity demanded: price, preference, income
  3. 3. Defining Supply • Amount of a product(electric power) that is offered for sale (by power supply utility) at all possible prices in the market. • Law of supply: Tendency to offer more quantity of good at higher price and less at lower prices (peak hours, deficit) • Many things determine the supply – production cost(generation cost), technology, number of suppliers(competitive market), expectation of consumers
  4. 4. Equilibrium state & price change due to Demand • An equilibrium is the condition that exists when quantity (power-MW) supplied and quantity (power-MW) demanded are equal • Excess demand or shortage is the condition that exists when quantity demanded exceeds quantity supplied at the current price • Excess supply or surplus is the condition that exists when quantity supplied exceeds quantity demanded at the current price • Lower demand leads to lower price and lower quantity exchanged 500 MW 500MW200MW 800MW
  5. 5. Demand of Electric Vehicles Charging Station
  6. 6. Demand Management Demand and supply on the electricity grid need to be in balanced at all times. Therefore, system operators meticulously monitor and forecast energy demand in order to provide the matching amount of supply throughout the day and year. When the matching amount of supply is either unavailable or expensive to acquire, demand needs to be controlled. Power Distribution Business meet the demand with Efficiency and Reliability so that Demand and Supply on the electricity grid will be in balance at all times Efficiency: Low power cost, low loss, low operational cost, best Reliability: Means : Power Quality and Availability Supply Demand
  7. 7. Electricity Supply Chain
  8. 8. DISCOMs-important link in electricity supply chain Load Centers End Use Concentered Loads LT Distribution System DISCOM BOUNDARY
  9. 9. Total Installed Capacity?? The installed capacity, or ICAP, of a power system represents the maximum capacity that the system is designed to run at. ... As with other forms of electricity generation, the installed capacity is typically measured in megawatts (=1 million watts). refers to capacity as the maximum output of electricity that a generator can produce under ideal conditions. Capacity levels are normally determined as a result of performance tests and allow utilities to project the maximum electricity load that a generator can support. Capacity is generally measured in megawatts or kilowatts.  India is the world's third largest producer and third largest consumer of electricity. The national electric grid in India has an installed capacity of 370.106 GW as of 31 March 2020. Renewable power plants, which also include large hydroelectric plants, constitute 35.86% of India's total installed capacity.
  10. 10. Total Installed Capacity-India Source: CEA & powermin.nic.in Sector MW % of Total Capacity State Sector 81,652 24.8% Central Sector 102,933 31.3% Private Sector 144,641 43.9% Total 3,29,226 Sector MW % of Total Central Sector 93,477 25.2% State Sector 103,322 27.9% Private Sector 173,549 46.9% Total 3,70,348 31.08.2017 30.04.2020
  11. 11. Demand Side Management • Also know as Energy demand management, or demand- side response (DSR). • mechanism to influence customer’s CAPABILITY and WILLINGNESS to reduce electricity consumption. • utility program aiming to fine-tune consumer’s energy consumption pattern, according to the utility’s energy production and distribution capacity. • modification of consumer demand for energy through various methods such as financial incentives and behavioral change through education.
  12. 12. Demand Side Management • Demand Side Management relies on a combination of using high efficiency equipment and efficient use of electricity through good operating practice. • Demand-Side Management is the implementation of policies and measures which serve to control, influence and generally reduce electricity demand. • DSM aims to improve final electricity-using systems, reduce consumption, while preserving the same level of service and comfort.
  13. 13. Definitions of DSM • Forum of Regulators (India)-FOR “Demand Side Management” means the actions of a Distribution Licensee, beyond the customer's meter, with the objective of altering the end-use of electricity - whether it is to increase demand, decrease it, shift it between high and low peak periods, or manage it when there are intermittent load demands - in the overall interests of reducing Distribution Licensee costs. • World Bank Systematic utility and government activities designed to change the amount and/or timing of the customer’s use of electricity for the collective benefit of the society, the utility and its consumers. • Wikipedia Actions that influence the quantity or pattern of use of energy consumed by end users. Source: MoP website, Wiki.
  14. 14. Demand Side Management- 2 MAIN FLAVOURS
  15. 15. DSM - Energy Efficiency • Emphasis is on reducing overall energy consumption and also peak demand over several years. • Permanent reduction in consumption across the load curve. • Provides same or better energy service with fewer kWh. – Example: replacing incandescent lighting with fluorescent lighting. – Example: replacing low-efficiency motor with high-efficiency motor. • Reduces electric system energy usage and fuel needs. Change: Technology, Price, Behavior, Standards
  16. 16. Defining Energy Efficiency • Energy efficiency is a way of expressing the energy performance of an energy-consuming device or system. • Energy efficiency generally relates energy consumption to some other measure: – kWh per m2 per year (typical for buildings) – kWh per 100 kg of ice (ice makers) – lumens per watt (for lighting) – kilometers per liter (automobiles) • In some cases, energy efficiency is expressed without reference to anything else. – Example: for electric motors energy efficiency is expressed as % conversion of electricity to useful work.
  17. 17. EE or not! You can’t tell just by looking One need to understand the performance parameters to evaluate and compare energy efficiency levels of equipment's.
  18. 18. Examples • Replacing inefficient end-use technologies with more-efficient models (non star with star labeled appliances). • Retrofitting whole buildings with insulation, better windows, better equipment to improve efficiency. • Operating buildings and industrial plants more efficiently via advanced use of information and control systems. • Installation of efficient equipments and appliances at the very first stage.
  19. 19. Scope for improving system’s EE Supply Side Focus of DSM as per definitionSupply Management
  20. 20. DSM - Demand Response Demand Response refers to changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of energy over time or to incentive payments designed to induce lower electricity use when prices are high or system reliability is in jeopardy. • Emphasis is on reducing peak demand for short periods of time for a few days during the year. • Temporary reduction in consumption. • Reductions targeted at a few specific hours, typically coincident with system peak. • May be associated with curtailment of service. • But may not necessarily be experienced as curtailment – Fluorescent lighting dimmers can reduce demand ~30% without occupant noticing change in luminance. – Pumping systems with lagoon storage can shut off for hours without loss of key function. Change: Technology, Price, Behavior, Standards
  21. 21. Examples Demand response programs are designed to enable customers to contribute to energy load reduction during times of peak demand. • Time of Use (TOU) • Real-time Pricing (RTP) • Critical Peak Pricing (CPP) • Peak Time Rebate Price or Tariff Based Options • Direct Load Control • Interruptible/Curtailable (I/C) Service • Demand Bidding/Buyback Programs • Emergency Demand Response Programs • Capacity Market Programs • Ancillary Services Market Programs Incentive-Based Programs
  22. 22. Time of Use (TOU) Time-of-use is a rate plan in which rates vary according to the time of day, season, and day type (weekday or weekend/holiday).  TOU pricing has three periods: i. on-peak, when energy demand and cost is high. ii. mid-peak, when energy demand and cost is moderate. iii. off-peak, when energy demand and cost is low. TOU pricing ultimately gives you more control over your electricity bill. • Real-time Pricing (RTP) RTP gives consumers information about the actual cost of electricity at any given time. Real-time pricing lets consumers adjust their electricity usage accordingly; for example, scheduling usage during periods of low demand to pay cheaper rates.  Real-time electricity pricing requires the installation of an electricity smart meter that can send and receive information about electricity costs and give consumers more information about their own usage. • Critical Peak Pricing (CPP) Critical Peak Pricing is a tariff option that is designed to reduce the load on specific days to balance the Demand and Supply.  done by increasing the electricity tariff on these constrained days (Critical Peak days) and lowering the tariff on non-constrained/normal days.  CPP offers a discount on summer electricity rates in exchange for higher prices during 12 CPP event days per year called between 4 p.m. and 9 p.m., usually occurring on the hottest summer days. • Peak Time Rebate – Peak Time Rebates rewards you for shifting and reducing your energy use when energy demand and prices are at their highest and renewable resources are less available. – By reducing your energy use during these peak times, you can earn rebates on your bill – Shifting energy use allows us to rely on more renewable sources of energy at peak times – This helps keep prices more affordable for the community and allows us to continue to provide reliable energy
  23. 23. Need for Demand Response 100 MW It can be seen that 100 MW demand occurs for 3 to 4 hours. The possibility of shifting or reducing it needs to be evaluated.
  24. 24. Impact of DR Program Example: DR can trim about 10% of peak load.
  25. 25. Need for Demand Response Is there a possibility of shifting or reducing load from 7 pm onwards (when the system faces peak demand) to some other time.
  26. 26. Impact of DR program
  27. 27. DSM-mix of long term demand reduction & short term demand management Energy Efficiency Consumption Optimized Optimized schedule Temporarily reduced Time of use/day tariff DR Permanent Hours/Day Second/Hours Timing System impact
  28. 28. Higher Priority– DR or EE? • With EE there is no compromise on usage pattern, same output with lesser energy. • Savings are certain and long-lasting, helping to reduce fuel demand and thus fuel prices. • EE provides base load demand reduction – savings at all times an equipment is in operation or use. • EE provides other co benefits – reduced maintenance expense, reduced environmental impact.
  29. 29. Strategies of DSM Aim Impact on peak demand Impact on energy demand Reduce the overall energy demand (energy conservation) ‘Clip’ demand at peak load periods (load levelling) Shifting to off peak hours (load levelling) No change Induce change in load as per supply (load controlling) also known as flexible load shape may reduce Promotion of applications requiring electricity – electric vehicles, Increasing load during off peak hours (load levelling) No change Increases
  30. 30. Some Examples Use of gas heaters Energy efficient motors Storage water/space heating Use of star labelled appliance Time of day tariff Power factor penalty Promotion of electric vehicle Scheduled power cuts or Interruptible load Promotion of induction cooker Concessional rates during off peak
  31. 31. Concerns address by DSM • Un-served Demand • Constraints in Capacity Addition(Regulatory, Resources, Infrastructure,Technical) • Rise in Power Prices • Environmental Impact • Discom’s Financial(poor) Health-With and without subsidy • Security of Energy Supply
  32. 32. Importance of DSM across various consumer segments Agriculture Residential Commercial Industry Existing tariff Low Medium High Very High Subsidy by Government High Applicable for low end consumer None None Savings potential High High Medium Medium Incentive for consumer to invest in EE (proportional to tariff) Low Medium High Very High
  33. 33. Type of DSM models 1. Consumer rebate based programs: incentives in the form of discount/rebate to participants for adoption of energy efficient products 2. Standard offer model: offer to purchase energy savings from a list of pre-approved measures at a fixed price for each avoided kWh or thermal energy. 3. Tariff programs: power factor incentives and penalty/reactive power charges, rebate incentives for EE buildings/appliances 4. Price responsive programs: programs that give customers an incentive to lower peak loads or during critical times 5. DSM bidding programs: a process whereby a utility issues a procurement proposal for energy savings, typically to customers, energy service companies, and other third parties. Competitive nature of bidding provides market driven costs for implementing DSM measures Voluntar y Voluntar y Mandat ory Voluntar y Voluntar y
  34. 34. IEA 2011(a); “Energy Provider-Delivered Energy Efficiency”, © OECD/IEA 2013 Drivers of DSM
  35. 35. Legislations and policies supporting DSM in India • Energy Conservation Act ✓ Standards & Code (Appliances, Buildings) ✓ Mandatory activities (Energy return filing, Energy Audit) • Electricity Act ✓ National Electricity Policy ✓ National Tariff Policy ✓ Draft DSM regulation prepared by FOR ✓ State level DSM regulation • National Mission on Enhanced Energy Efficiency ✓ Energy reduction target (PAT) ✓ Achieving energy performance benchmark (SEEP) Deepening commitment; moving from legislation to regulations, programs, and schemes 2008 2001 2003
  36. 36. Energy Conservation Act, 2001 ■ EC Act 2001 provides for Legal Framework, Institutional Mechanism & Regulatory mechanism for Energy Efficiency, Conservation & related matters ✓ Establishment of BEE: Under Sec 3(1) of the act, a statutory body Bureau of Energy Efficiency (BEE) was created on March 2002. ✓ BEE’s mission is to develop Policy & Strategies to reduce Energy Intensity of India. ✓ Major intervention areas: Regulatory, Market Transformation, Fiscal measures, Financial Incentives. Specify energy conservation norms for appliances, equipments, buildings and industries Promote innovative financing of energy efficiency projects
  37. 37. Evolution of Electricity Act in India 1910 - present The Indian Electricity Act, 1910 The Electricity Supply Act, 1948 ➢ Basic framework for electric supply industry ➢ Provision for license (state govt.) for electric supply for specified area ➢ Mandated creation of SEBs ➢ Private sector participation in generation and transmission ➢ Setting up Central / State Electricity Regulatory Commission After 37 yrs After 49 yrs ➢ Reforms and competition ➢ Protection of consumer interest ➢ Efficient and environment benign policies Electricity Act, 2003 After 5 yrs The Electricity Regulatory Commission Act, 1998
  38. 38. EA 2003 to promote efficiency in supply & demand side EA Act, 2003 SECTION 23: ….... for maintaining the efficient supply, securing the equitable distribution of electricity…. SECTION 62: …..terms and conditions for determination of tariff to depend on “the factors which would encourage competition, efficiency, economical use of resources, good performance and optimum investment” SECTION 42(1): …the duty of a distribution licensee to develop and maintain an efficient, coordinated and economical distribution system in his area of supply…. SECTION 86(2): ….State Commission shall advise the State Govt. on 'promotion, competition, efficiency and economy in activities of the electricity Industry’
  39. 39. Formulation of DSM Regulations Pre 2010 Discussion on DSM regulations by States; FOR draft paper in 2008 Maharashtra notifies DSM Regulations Model DSM Regulations by FOR* DSM regulation in 10 states Apr 2010 May 2010 2010 - current Draft DSM regulation in 6 states Became a guiding regulation for ERCs to follow *FOR—Forum Of Regulators
  40. 40. Maharashtra : 1st state to notify DSM Regulation MERC DSM Regulation, 2010 Implementation Framework Regulation, 2010 Cost Effective Assessment Regulation, 2010 Draft Evaluation, Measurement & Verification Regulation (in development)
  41. 41. Key features of Model DSM Regulation, 2010 • Constitution of DSM cell • DSM process framework • Roles and responsibility of distribution licensee and ERC • DSM objective and target setting • Timeline of activities • Indicators for cost effectiveness • Mechanism for cost recovery • Incentives to distribution licensee
  42. 42. Constitution of DSM Cell • Every Distribution Licensee has to constitute a DSM cell within 1 month from adoption of DSM regulations • Other activities to be done by DSM cell in a time bound manner are also specified DSM Cell Load Research & Baseline data Formulation of DSM Plan Seeking approval to DSM Plan & Program 1 month 6 month 1 year At least 6 months before start of next MYT control period AfterDSMnotification
  43. 43. Role of DISCOM and ERC Role of SERC Role of Distribution Licensee Directs licensee: DSM Cell constitution, conduct DSM related activities, setting DSM objectives and goal/target setting Issues guidelines: Cost effectiveness, EM&V Develops mechanisms: to recover DSM costs, incentives to DISCOMs Provides approval: DSM plan, DSM project implementation Follow ERCs order: Constitute DSM cell, conduct load research and load survey, design and develop DSM plan and projects Seek ERCs approval: Action Plan, DSM program Implement DSM programs: as per ERC’s approved plan Monitor and Report: Implementation progress, savings
  44. 44. Constitution of DSM Cell (as per FOR) ▪ Every Distribution Licensee need to constitute a DSM Cell within 1 month from adoption of DSM regulations ▪ Desired team structure (Strength, Expertise, Experience) is not defined in the regulation ▪ Indicative structure of DSM cell as per FOR 2008 report: DSM Cell Head Program Designer • Mobilizing resources & Selection of DSM programs • Financing and implementation arrangements • Customers engagement • Load Research, Load Shape Analysis & Market Research • Design and Implement DSM pilot program & evaluations • Participate in choosing Program options • Prepare utility, technology & customer data for DSM analysis. • Evaluate options & choose programs for further design. • Monitor pilot & demonstration program, program implementation. • Manage any bid development & contract. Research Analyst
  45. 45. Why to constitute a DSM Cell in a utility ? Smooth & Efficient DSM Cell MoU* Requirement with BEE Expand DISCOM’s business (Consulting, Audit) Meet Regulatory Mandate (DSM Regulations) Spread Awareness on DSM *MoU—Memorandum Of Understanding
  46. 46. Suggested structure of DSM Cell Size of DSM cell would depend upon: ▪ Consumer mix ▪ Geographical spread ▪ Metering / automation in place DSM cell head Technical Energy Audit Survey Support staff Finance Contract Regulatory Project Management Communication IT Support staff
  47. 47. Ideal structure based on the nature of activities to be handled by DSM Cell Activities of DSM cell Dealing with entities Type of Skills or Expertise required Load research Internal departments, Consultants Technical Load survey or market research Consumers, Survey Agencies, Consultants Technical, Survey, Energy Auditing Technical and economic potential estimation Internal DISCOM, Consultants Technical, Financial Action plan preparation ERC, Consultants Technical, Financial Regulatory filing of DSM projects ERC, Consultants Technical, Regulatory DSM implementation (selection of implementation partners, project implementation, awareness) Consumers, Vendors, ESCO, Implementers, Event Management, PR Program management, IT, Contract, Communication Monitoring and Reporting Consumers, ERC, Consultants Audit, Regulatory
  48. 48. Activities to be performed by DSM cell Within six months of notification of regulation 6 months before next MYT cycle 1. Load research 2. Market survey 3. Potential estimation 4. Action plan preparation 5. DSM program preparation 6. Regulatory filing of DSM projects 7. DSM implementation 8. Monitoring & Reporting 9. Project completion report DSM Plan Within 1 year from date of regulations Quarterly or every six months Timeline varies by state as defined in their respective DSM regulation
  49. 49. DSM process framework
  50. 50. DSM objective and target setting DSM objective • Power shortage mitigation • Seasonal peak reduction • Cost effective energy savings • Lowering the cost of electricity • Reduction in emissions of GHG DSM target setting • Percentage reductions in load growth • Savings in kW, kWh • Savings as a percent of total resources / investment to meet load Key Consideration - Load profile - Consumer mix - Technical potential Key Consideration - National EE objectives - Consistent with BEE’s plan
  51. 51. Mechanism for cost recovery • Distribution Licensee shall identify the net incremental costs, if any, associated with planning, design and implementation of programmes • Distribution Licensee may propose methodology for recovery of net incremental costs through tariff or any other mechanism • In order to qualify for cost recovery, each program must be i. Approved prior to implementation ii. Implemented in accordance with the approved program plan and iii. Implemented cost effectively Source: 2008 FOR report on DSM indicated consideration of higher return on investment for DSM – 2% for subsidized and 1% for subsidizing category
  52. 52. Performance Incentives to DISCOM (1/2) • The Commission may provide incentives to Distribution Utilities for achieving or exceeding DSM target. • Not mentioned in the regulation, but the incentive supposedly could be in the form of following: – Higher Return on Investment. – Success fee defined as percentage of total program cost. Annual Efficiency and DSM Achievement Level Amount Exceeding 80% Performance Performance Incentive 80% 0% 0% 90% 10% 2% of Net Economic Benefit (Capped at 20% of DSM Budget) 100% 20% 3% of Net Economic Benefit (Capped at 20% of DSM Budget)
  53. 53. Performance Incentives to DISCOM (2/2) Example - a hypothetical DSM program successfully delivers 200 million INR savings through 100 million investment in DSM. Utility was allowed to keep 15% of net savings.
  54. 54. Standards & Labeling program ■ Aim: To provide customers an informed choice about the energy savings & thereby cost saving potential. ■ Features: Enables consumers to distinguish energy efficient product through a comparative or an endorsement label. ■ Coverage / Status: 17 Nos. Equipments / Appliances (to increase to 27 Nos. by 12th Five year Plan) ■ Implementation: Mandatory notification, voluntary participation. ■ Load strategy: Strategic conservation ■ Cost recovery of investment: Product price Room Air Conditioner Ceiling Fan Distribution Transformer Domestic Gas Stove Frost Free Fridge DG Set Water Heater BallastColor TV Computer Industrial Motor Solid state Inverter TFLDirect Cool Fridge Submersible Pump Monoset Pump Office Automation Product Diesel Engine-pump set
  55. 55. • Aim: A market-based mechanism to make improvements in EE in energy-intensive large industries & facilities. • Features: Mandatory Specific Energy Consumption reduction target. • Coverage: 478 large industries from 8 sectors. • Implementation: Mandatory notification by MoP which is implemented by covered participants. Load strategy: Strategic conservation. • Cost recovery of investment: Energy savings, certificate trading, product price. Perform Achieve Trade (PAT)
  56. 56. Energy Conservation Building Code Current status: 10 states notified. Over 300 ECBC Complint buildings built till date Aim: To inculcate practice of energy efficient design, construction & operation in new buildings Features: Minimum energy performance standards in terms of Energy Performance IndexkWh/sq.m/yr) Coverage: 1) Connected load of 100kW or contract demand of 120kVA. Implementation mode: Notification by state govt. for amendment in building bye-laws which is to be adopted by building developers
  57. 57. Benefit of DSM Generation Transmission Distribution - Reduced fuel usage - Reduced emissions - Long term energy security - Delayed network augmentation - Reduced transmission congestion - Improved system reliability - Reduced AT&C Loss - Customer satisfaction
  58. 58. Ongoing DSM Scheme in BRPL • In BRPL, Afternoon Peak is addressed by Solar Rooftop (Net Metering) system where as Evening Peak is addressed by distribution of LED Bulbs, LED Tube lights, Energy Efficient Fans and LED Street Lights. BRPL in collaboration with EESL (Energy Efficiency Services Limited) is facilitating the distribution of LED Bulbs, LED Tube lights, LED Street Lights. 1 Energy Efficient LED lighting Scheme Under this scheme 9 W LED Bulbs are distributed through counters set up at BRPL customer care centre at all 19 divisions. discounted price of Rs. 70 each 2 LED Tube light Distribution Scheme Under this scheme, a consumer can buy LED Tube lights of 20 watts at heavily subsidized price of Rs. 220 each. 3 BEE 5 star rated Energy Efficient Fan Scheme This scheme offers 5 Star Energy Efficient Fans, 50 W, to consumers of BRPL at discounted price the fan will have a replacement warranty of two years for any defect. The price of Fan is fixed at Rs 1110/-per Fan. 4 Roof-Top Solar Net Metering: BSES became the first discom in Delhi to energise roof- top solar ‘net – metering’ arrangements in South and South West Delhi. Domestic and Commercial consumers can recover return on investment in around 7 to 9 years. 5 LED based Street Lighting National Programme (SLNP) in SDMC in BRPL Distribution Area: EESL has signed a tripartite agreement with BSES and SDMC to install LED based street lights. In phase 1, Under the SLNP, SDMC area alone accounts for over 2 lakhs street lights replacements.
  59. 59. 6 Rebate based AC Replacement Scheme The 51% AC used are non-rated ACs. To incentivize replacement of old AC by buying of 5 star AC or Inverter AC at discounted rate. DERC has approved the BEE 5 star rated Energy efficient Rebate based AC replacement Scheme. Under this Scheme, BRPL intends to offer BEE 5 Star rated Energy Efficient Air Conditioners to BRPL’s Consumers as a replacement for old Air Conditioner in working condition. Scheme offers 10000 BEE 5 star rated Energy Efficient Air Conditioner to the consumers on first come first serve basis. 7 Demand Response Program: The DR Program will include the participation of a number of medium-to-large energy consumers with measured demands of 350 kW or more which can rapidly create “negawatts” (i.e., negative watts) at peak hours/ times by curtailing energy usage in a pre- planned way. 8 Behavioral Energy Efficiency Program BRPL has signed a MOU for a project on behavioural energy efficiency with OPOWER, ORACLE, USA.The program will provide selected residential consumers with personalized Home Energy Reports (HERs) and an integrated web portal. It’s a 2 year project which will demonstrate the efficacy of OPOWER’s software to reduce energy waste, curtail peak-hour consumption, and improve customer engagement 9 Energy Efficient Solar Agricultural Pump Scheme Installation of Energy Efficient solar Agricultural pump will reduce the network cost as well as T&D Loss.

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