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					</table>The Central Electricity Authority (<a href="https://cea.nic.in/?lang=en" target="_blank" rel="noopener">CEA</a>) has released guidelines for state utilities to create medium and long-term projections to evaluate the country&#8217;s electricity demand.
According to the guidelines, the objective of the forecast must be to encompass electricity demand projections for the utility system. It should also encompass the entire power consumption, including the demand met by distributed power sources such as captive power projects and rooftop solar installations. This approach is expected to enable the emergence of a comprehensive picture of the power sector.
The preparation of the forecast must involve collaboration with all stakeholders, including but not limited to the industrial department, agricultural department, municipal corporation, drinking water department, weather department, transport department, Bureau of Energy Efficiency, state planning department, captive power project owners, state nodal agencies for renewable energies, and any other department responsible for planning and implementing electrical energy-intensive programs.
The forecasts will cover both medium-term (spanning more than one year and up to five years) and long-term periods (at least ten years).
The CEA has directed that the power demand forecasting to be conducted every five years with yearly reviews to ensure accuracy.
The preparation of forecasts should take place at the DISCOM level. Moreover, whenever sufficient granular level data is available, forecasts should also be conducted at more detailed levels, such as zonal, circle, district, substation, feeder, or transformer levels.
The guidelines recommend that the forecasting process encompass at least three scenarios: an optimistic scenario, a business-as-usual scenario, and a pessimistic one.
The identification of consumption categories should align with the tariff structure currently in effect within each DISCOM. The main categories include domestic, commercial, public lighting, public water works, irrigation, low tension (LT) industries, high tension (HT) industries, railways, bulk supply, and open access.
As per the guidelines, the medium-term forecast should not only rely on past growth trends but also consider evaluating the potential impact of specific government policies, developmental plans, and other emerging factors on overall electricity consumption.
Similarly, the long-term forecast should take into account the effects of specific government policies, developmental plans, and emerging factors on the definite quantum of electrical energy, in addition to considering past growth trends.
CEA had <a href="https://www.mercomindia.com/cea-proposes-guidelines-for-demand-forecasts" target="_blank" rel="noopener">issued</a> the draft guidelines in April this year.
Forecast Methodology
Two simple and suitable statistical methods are recommended to analyze the annual growth rate of each energy consumption category in the past: the Least Square Method and the Weighted Average Method or any other advanced statistical tools to analyze growth rates.
Additionally, past growth trends for transmission and distribution (T&amp;D) losses should be examined separately to estimate future trends accurately. The three components of T&amp;D losses (distribution losses, intrastate transmission losses, and interstate transmission losses) should be analyzed individually.
The guidelines suggest that it is crucial to consider certain factors when DISCOMs anticipate a significant reduction in T&amp;D losses over a short period due to planned measures like extensive meter installations. In such cases, the reduction in losses should not be viewed in isolation, as some of the unmetered load is expected to shift to metered load under different consumer categories, and this shift must be considered to ensure a comprehensive evaluation of the impact of these measures.
If energy efficiency is projected to follow similar patterns in the future as observed in the past, its impact should not be separately considered since it is already inherent in the historical time series data.
However, if significant changes in energy efficiency are anticipated in the future due to factors like major technological breakthroughs or the implementation of significant government policies, then these impacts should be taken into account as additional factors in the forecasting process.
To determine the energy requirement of a DISCOM, T&amp;D losses should be added to their total energy consumption.
The peak demand forecast for a DISCOM should be derived from the energy requirement figure, applying an appropriate load factor.
Impact of Emerging Aspects
The impact of emerging factors must be quantified in alignment with the government&#8217;s established targets. In situations where specific targets are unavailable, appropriate assumptions should be made, and these assumptions should be clearly stated.
When government targets are provided yearly, a thorough assessment of the demand impact must be conducted on a monthly, daily, hourly, or time-block basis.
Whenever possible, the effects of emerging factors should be allocated to the corresponding pre-defined consumption categories.
Energy Requirement of a DISCOM
To calculate the total electrical energy requirement of a DISCOM, one should combine its distribution losses and intra-state transmission losses with its overall category-wise electrical energy consumption.
The distribution losses for a DISCOM are determined as the disparity between the net input energy to its system and the total energy consumed by its own consumers, along with any energy consumed by open access consumers if transmitted through its network.
When it comes to intrastate transmission losses for the entire state, these losses should be distributed among the various DISCOMs in proportion to their respective energy requirements (i.e., energy consumption + distribution losses) if more than one DISCOM is operating in that state.
Energy Requirement of a State
To determine the electrical energy requirement of a state at its periphery, the T&amp;D losses of each DISCOM within the state should be summed up and combined with the overall electrical energy consumption of the state.
The electrical energy consumption of a state should be calculated by summing up the electrical energy consumption of all its DISCOMs.
For calculating interstate transmission losses, such losses should be multiplied by the expected electrical energy the states are projected to import from the national grid. This estimation should be based on the historical ratio of the energy the states imported in relation to their previous energy requirement.
Peak Demand
The peak demand forecast for a DISCOM should be determined based on its energy requirement, applying an appropriate load factor.
The load factor can be calculated by dividing the total electrical energy requirement for a specific period by the product of the maximum demand and that period.
The CEA suggests that past trends should be considered to estimate suitable load factors for the upcoming years. However, if there are anticipated changes in the specific consumer mix, those changes should also be considered.
If the expected pattern of the consumer mix is different from the past, the projected load factor should be derived by analyzing load factors from other DISCOMs with a similar consumer mix.
Estimate the peak electricity demand of the state by applying an appropriate diversity factor, based on historical trends, to the sum of the peak electricity demand of all its DISCOMs.
Other Factors
The load factor of a DISCOM should always be kept below one.
If the system supplies electricity to block industrial loads, such as aluminum and other process industries, which have high electric load factors, the overall system load factor should ideally be high.
The T&amp;D losses of a state (excluding the interstate transmission loss component) should be the sum of the T&amp;D losses of all its DISCOMs.
To ensure the accuracy and consistency, the input data for energy requirements should be cross-checked from both the demand and supply sides. For a state, the energy requirement met at its periphery should equal the total net generation within the state from all sources feeding the grid plus its net import of electricity from outside the state.
In April this year, the Central Electricity Regulatory Commission <a href="https://www.mercomindia.com/regulator-ancillary-services-peak-power-demand" target="_blank" rel="noopener">expanded</a> the scope of operation of the Reserve Regulation Ancillary Services Regulations, 2015, to facilitate the availability of adequate power reserves with the system operator to manage the peak demand.
Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.
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CEA Issues Guidelines to Evaluate Energy Demand Forecast in the Country

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