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Demand Aggregator – Single Point Connection in Open Access for MSMEs

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They need maximum support to reduce their costs and increase their output. Good quality, reliable, and cost-effective power is quintessential to empower MSMEs. This can be achieved with the introduction of a new market participant that can be called a “Demand Aggregator”.

Demand Aggregator will:

  • Consolidate demand for all entities within defined industrial areas of the country.
  • Forecast, buy and settle power at a defined input point for the said industrial area.
  • Sell that power, bill all consumers, and collect money from all connections.

*Provision is that the consolidated demand has to be > 1 MW The Electricity Amendment Bill 2020 (draft, but ultimately the act), which allows sub-distribution licensees to improve the efficacy of distribution licensees, may well provision “Demand Aggregator” as a service provider to MSMEs and distribution licensees. Also, CERC may design and develop an appropriate billing and settlement mechanism between licensees and demand aggregators.

Following can be the benefits to MSME and Licensee:

MSMELicense
Every MSME, whose electricity demand is less than 1MW shall get access to competitive electricity.Single point contact – billing will be done by the Demand Aggregator who would also manage the downstream metering, billing, and collection services for MSMEs.
Improved viability: cost of electricity /unit production would be lower.Impact of variability in demand forecast by
MSME, which is now aggregated, shall reduce the burden on DISCOMs through their input cost
Demand Aggregator to stay competitive: MSME, like a big open access customer, shall have a choice to get power from either licensee or Demand Aggregator.Licensees or sub-licensees will have a choice to recruit a qualified Demand Aggregator, with definite SLAs. This shall improve competency, efficiency, and a sense of collaboration.