They require significant support to reduce costs and increase output. Good quality, reliable, and cost-effective power is essential to empower MSMEs. This can be achieved by introducing a new market participant – the Demand Aggregator.
The Demand Aggregator will:
- Consolidate demand for all entities within defined industrial areas
- Forecast, purchase, and settle power at a designated input point for the industrial area
- Distribute power, bill consumers, and collect payments from all connections
*Note: The consolidated demand must exceed 1 MW.
The Electricity Amendment Bill 2020 (draft, potentially the act) proposes that sub-distribution licensees can improve the efficiency of distribution licensees. This may open up the possibility of recognising the Demand Aggregator as a service provider to MSMEs and distribution licensees. Additionally, CERC may develop a billing and settlement mechanism between licensees and Demand Aggregators.
Benefits for MSMEs and Licensees:
| MSME | License |
|---|---|
| Access to competitive electricity rates for MSMEs with demand below 1 MW. | Single point contact –Billing will be done by the Demand Aggregator who will also manage the downstream metering, billing, and collection services for MSMEs. |
| Improved viability: Cost of electricity /unit production would be lower. | Reduced burden on DisComs as aggregated demand will minimise the impact of forecast variability. |
| Competitive choice – MSMEs, like large open access customers, can choose to source power from either the 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. |
Provisioning a Demand Aggregator shall be a win-win proposition for both MSMEs and distribution licensees. The licensee will save on servicing costs for multiple small consumers. It would need to interface with a single entity that is well-versed in managing demand forecasting, metering, billing, and collection. This allows the licensee to focus more on core business operations and optimisation.