A 1,000-customer trial of automated demand management in Mumbai and New Delhi shows promise in reducing electricity consumption and carbon emissions

On 12 September, Imperial hosted a delegation from Tata Power, one of the largest integrated electric power companies in India, for a day of insights centred around the launch of a briefing paper exploring the impact of automation and customer incentives on demand management of the electricity grid.

Electricity production is changing rapidly around the world, with an increasing share of electricity coming from renewable sources. While generating electricity from renewables is already cheaper than fossil fuel electricity, there are difficulties in developing a grid that uses renewables effectively. A significant issue is that renewable electricity production is intermittent, and peak supply may not coincide with demand from customers.

Managing this issue will require a range of technologies, from improved electricity storage to better energy efficiency to smart grids. One approach, highlighted by the International Energy Agency (IEA) as requiring further development, is demand response or demand management.

Shifting demand

Demand management refers to approaches to balancing demand and supply from electricity grids by finding ways to encourage consumers to alter their behaviour and use electricity at times of greener supply. Typically, such schemes involve dynamic pricing or dynamic reward incentives for customers, which are often facilitated by providing smart meters that let customers see their real-time energy consumption.

Researchers from Imperial College Business School have worked closely with Tata Power to explore the impact of automation and incentives on demand management, through a trial involving more than 1,000 residential customers of Tata Power in Mumbai and New Delhi, India.

Dr Shefali Khanna, Research Associate, Imperial College Business School and Researcher at the Hitachi-Imperial Centre for Decarbonisation and Natural Climate Solutions, one of the report's authors, explained the importance of active demand management: "As the number of users connected to an energy system grows, and a greater share of electricity is produced using intermittent renewable energy, we need to find ways to balance the supply and improve the efficiency of the grid. In particular, we want to identify ways to reduce peak demand and limit reliance on backup power generation options."

In the trial, whose findings are summarised in a paper titled Leveraging Automation and Incentives to Enhance Power Demand Flexibility, customers were provided with a Wi-Fi-controlled smart switch connected to a single appliance – with almost 4 out of 5 switches connected to a room air conditioning unit.

30-minute switch-off events were automatically triggered (at different times for different users) with customers earning rewards based on each kWh of electricity they avoided using during the switch-off events.

Dr Khanna said: "Managing demand on the customer side is suitable for exploration because people’s use of energy can often be flexible. But previous research has shown that when customers have to manually turn off devices, they may not be attentive enough to electricity pricing or the potential rewards to do so. We wanted to find out what impact automation might have on this behaviour."

Automated interventions

The trial found that during switch-off events, household energy demand reduced by around 8.5% on average, and that there was no compensating effect of increased electricity consumption following a switch-off. From the time the trial began in March 2023 until July 2024, 5.4 MWh of electricity consumption was avoided. The average carbon emission reduction effect of the POWBAL trial was 2.3%, increasing to 3% in some households, and the average cost saving was 2.5%. Taking the device and installation costs of the smart switches into account, the average net mitigation cost was -$23 per ton of CO2 with a negative net carbon mitigation cost computed for nearly three-quarters of the households sampled.

Dr Khanna said, “Our trial indicates that this approach could be successful, though we need to follow up by exploring how these results compare to manual approaches and how to encourage customers to participate. Because we initially conducted the trial with owners of smart meters, we were able to find that household energy use reduced in line with the device-level reduction, which means it may be possible to deploy a large-scale solution using only smart switches.”

Nilesh Kane, Chief of Distribution, Mumbai Operation, Tata Power, said: "Tata Power has been practising demand response for a number of years, but mainly with industrial and commercial customers. We’re interested in finding ways to approach household consumers and encourage them to take measures that support the transition towards decarbonisation, and these trial results are a promising insight into what automation might offer."

Insights and applications

Delegates from a number of UK and European energy companies attended the launch event at which the paper’s findings were discussed alongside insights into how the outcome of the trial could inform demand management approaches for electricity grids in different countries and contexts.

Following this session, a range of Imperial researchers gave brief talks on research related to clean energy generation, the economics of low-carbon electricity, sustainable power systems and other topics of mutual interest, underlining Imperial’s scientific mission to be useful and provide the thinking and solutions needed to drive beneficial innovation.

The trial and visit were supported through the Hitachi-Imperial Centre for Decarbonisation and Natural Climate Solutions, a 5-year initiative collaborating in fundamental and applied research to drive the transition to zero pollution.

Imperial and India

Imperial enjoys strong and longstanding collaborations with partners in India, particularly in the areas of climate change, clean energy and sustainability. Imperial scientists are working with academic, industry and government partners across a range of net zero and sustainability challenge areas, from co-developing next generation technologies for clean energy, to assessing the economic impact of the transition to renewables.

Research partners include the Indian Institute of Science Bangalore, Indian Institute of Technology Bombay, Indian Institute of Technology Delhi, Indian Institute of Technology Kharagpur, Indian Institute of Technology Guwahati, Bhaba Atomic Research Centre and The Energy Resources Institute (TERI). As part of it’s flagship Transition to Zero Pollution (TZP) initiative, Imperial is also partnering with Tata Steel to establish a new centre that will develop innovative manufacturing processes to help decarbonize steel production.

India is a key research and innovation partner country for the global transition to zero pollution and Imperial looks forward to continuing to partner with India’s top industries, academic institutions and innovators to co-develop the technological advancements that will drive the transition over the coming decade.