DEMAND SIDE MANAGEMENT

OVERVIEW OF ENERGY EFFICIENCY IN MALAWI

Malawi has implemented several policies and initiatives aimed at improving energy efficiency and promoting sustainable energy use. Some of these policies and initiatives include:

National Energy Policy: The government of Malawi developed a National Energy Policy in 2018, which includes provisions for promoting energy efficiency and conservation. The policy recognizes the need to improve energy efficiency in all sectors of the economy and calls for the development of energy efficiency standards and labeling programs.
Efficient Lighting Initiative: The Efficient Lighting Initiative, launched in 2017, is a program aimed at promoting the use of energy-efficient lighting in Malawi. The initiative provides subsidies to consumers to encourage the use of energy-efficient lighting and works with manufacturers to promote the production and distribution of energy-efficient lighting products.
Renewable Energy Feed-in Tariff: Malawi developed a Renewable Energy Feed-in Tariff (REFIT) instrument in the year 2012 to encourage the development of renewable energy projects. The program provides guaranteed prices for renewable energy generated by small-scale projects, which helps to support the development of renewable energy technologies and improve energy efficiency.
Energy Efficiency Standards and Labeling Program: Malawi is in the process of developing energy efficiency standards and labeling programs for appliances and equipment. The program will establish minimum energy performance standards for appliances and equipment and provide consumers with information on the energy efficiency of products.

DEMAND SIDE MANAGEMENT

Demand Side Management (DSM) is an important means of improving energy efficiency at the end-use level of the energy supply chain. Currently, in Malawi, there is a lot of wastage of electrical energy and biomass in end-use activities such as cooking, water and space heating, as well as lighting occasioned by use of inefficient appliances and devices.

The Energy Policy of 2018 proposes various interventions that should be implemented in order to improve efficiency in the electricity supply industry as well as the utilization of other energy forms.

Demand Side Management in the Electricity Supply Industry

Most electricity supply utilities, including companies in the Southern African Power Pool, have implemented DSM in various forms with a view to minimizing consumption of electrical energy. This also translates into a reduction in demand for electrical energy, which is a very effective means of controlling peak demand, especially in capacity constrained systems.

Utility Actions in DSM

The utilities’ DSM programmes entail a combination of some or all of the following actions:

Public information campaigns to raise awareness among consumers;
Energy audits to provide energy efficiency advice to consumers;
Installation of energy efficient measures in households to help consumers reduce their bills, and reduce stress on overburdened utility systems;
Provision of financing in the form of rebates below-market loans for energy efficiency measures, sometimes with the facility of allowing the consumers to repay the loan as part of their utility bill payment. Installation of prepaid meters which have the effect of increasing energy-efficiency behaviour by consumers, in addition to reducing non-payment problems for utilities;
Implementation of tariffs that encourage efficient use of electricity, such as
1. Inverted Block Rates, whereby a low unit price for the first block of electricity use is followed by higher tariffs for additional blocks of usage;
2. Time of Use (TOU) Tariffs, which typically charge more for energy consumed during peak periods, thereby incentivizing load shifting to off-peak periods; and
3. Dynamic or “Real-time” Pricing– a tariff structure in which the electricity price continuously fluctuates based on availability and demand.

Customer Actions in DSM

The consumer decides what energy-efficiency actions to take. The utility can encourage the consumer and even provide incentives but the decision is up to the consumer. Under demand response programmes, the consumer can still decide whether or not to participate in an energy efficiency programme, but the utility can control the amount and timing of electricity usage. Participating consumers typically get very short notice from the utility that it will be exercising the use of these measures at any given moment. The energy-efficient actions include:

a) Entering into Interruptible Contracts – which are agreements between utilities and large energy users in which the latter agree to have their power shut-off for a short period (e.g. 1-3 hours) in exchange for a financial incentive in order to reduce peak demand or relieve strain on an overburdened utility grid;
b) Acceptance of installation of Load Controllers – which are devices installed by the utility on a customer’s equipment (usually an air conditioning unit or a geyser) that can be remotely controlled by the utility to cycle-off the equipment for 30-60 minutes during periods of high peak demand. The customer receives an incentive such as a bill credit for participating in the programme;
c) Acceptance of the installation of Load limiters in electric meters to prevent consumers from using more than a predetermined amount of electricity during peak periods. Load limiters can in some cases replace meters and the customers are simply charged a flat monthly fee. Customer participation in such programmes is in most cases involuntary; and
d) Installation of roof-mounted solar water heaters which serve as alternative sources of energy for water heating, thereby reducing the amount of electrical energy used for this purpose

Government Actions

Government actions to promote DSM include the following:

a) Instituting appliance testing, labelling and standards, which will include minimum energy performance standards (MEPS);
b) Enforcing building codes on energy-efficiency requirements in the construction of new buildings;
c) Reducing or eliminating import duty and taxes on energy efficient products;
d) Enforcing Government procurement rules that require procured energy-consuming products such as lighting devices, ballasts, air conditioners, and fans to meet or exceed minimum energy performance standards;
e) Instituting mandatory energy audits and energy use reductions by large customers;
f) Training, certification and technical assistance for industries, building owners, bankers, utilities, standards agencies, code-setting organizations, energy auditors such as electrical contractors, performance contractors; and
g) Providing post-installation inspections and programme evaluations.

CSOs and Private Sector Actions

Civil Society Organisations and the Private Sector can play a major role in promoting DSM through, respectively:

Programme design and management to assist government agencies and utilities with the structuring and implementation of energy efficiency initiatives; and
Information dissemination and awareness-raising.

2. Demand Side Management in Biomass End-use

The country is experiencing severe degradation of its forestry resources. Continued reliance on firewood and charcoal in the light of forest degradation sabotages development and therefore calls for urgent energy efficient solutions. For biomass to be truly renewable, it must be utilised in a sustainable manner, which entails replanting of trees with focus on the fast-growing varieties and, at the end-use level, use of more energy efficient cook stoves as well as brick and charcoal making kilns.

According to the National Energy Policy 2018, the Ministry of Energy is expected to promote the use of energy efficient technologies using the following strategies;

Enforcing a ban on importation, distribution and use of incandescent bulbs and promoting energy saving alternatives.
Promoting energy saving electrical and biomass-fuelled devices.
Promulgating regulations and standards for building designs and energy efficient devices.
Providing duty and VAT waivers for solar water heaters.
Supporting utility companies in the implementation of tariffs that encourage energy efficient use of electricity.
Encouraging regular energy audits conducted by certified auditors in public, industrial, and commercial buildings.
Encouraging research and development in energy efficient equipment, buildings etc.
Promoting use of multiple sources of energy and energy efficiency in buildings (a limit can be set as to the size of the buildings).
Sensitising the public on safe utilisation and disposal of energy saving bulbs.
Promoting the design of buildings to take advantage of natural lighting, air conditioning (cooling/ heating).

ENERGY EFFICIENCY INITIATIVES

Demand Side Management initiatives

Malawi in implementing Energy efficiency and Demand Side Management (DSM) initiatives for both the grid and off-grid energy consumption.

Grid-based demand-side management (DSM)

Grid-based demand-side management (DSM) is a strategy that can be used to manage energy demand and improve the efficiency of the power system. In Malawi, the Electricity Supply Corporation of Malawi (ESCOM) is responsible for managing the country’s power system and has implemented various DSM programs to improve the efficiency of the grid.

One example of a DSM program implemented by ESCOM is the Time-of-Use (TOU) tariff, which offers lower electricity rates during off-peak hours to encourage consumers to shift their energy use to times when demand is lower. This helps to reduce strain on the grid during peak demand periods and can help to avoid the need for expensive upgrades to the power system.

ESCOM has also implemented a DSM program aimed at reducing losses in the distribution system. This program involves the installation of smart meters and the use of remote disconnect devices, which allow ESCOM to monitor energy usage and disconnect customers remotely in the event of non-payment. This helps to reduce losses in the distribution system and improve the efficiency of the grid.

In addition to these DSM programs, ESCOM has also implemented energy efficiency programs aimed at reducing energy consumption and improving the efficiency of the power system. These programs include the promotion of energy-efficient lighting and appliances, as well as the development of building codes and standards to promote energy-efficient buildings.

The table below shows some DSM initiatives

Initiative	Objectives	Status
Power factor correction	Reduce system losses due to low power factor mainly from industry	Several meetings held with industry to create awareness on impact of poor power factor and how power factor can be improved. The Utility is also pursuing increasing penalties for low power factor.
Energy saver bulbs (CFL and LEDs)	Reduce energy consumption through use of energy efficient lighting	Distribution of CFL and LED Lamps is on-going. So far, more than 50 MW has been conserved since 2016.
Load shifting	This is intended at moving industrial operations within the peak demand period to reduce pressure on the system	Agreements to shift load with some companies signed with the Utility and implementation in progress.
Sensitization and awareness	Create awareness to customers about the power situation and to provide information on how customers can conserve energy	Sensitization and awareness campaigns are ongoing through various media platforms like Radio, TV, Social Media and print media.

2. Light Emitting Diodes

On LED bulbs, Malawi through its utility company ESCOM started selling subsidised LED bulbs in 2017. For this period of three (3) years ESCOM has sold over 1.8 Million LED bulbs saving more than 42 MW of electricity thereby relieving the National generation capacity which is very low compared to the current electricity demand. This programme for LED bulbs is ongoing.

Off-grid demand-side management (DSM)

Off-grid demand-side management (DSM) is a strategy that is used to manage energy demand and improve the efficiency of off-grid energy systems. In Malawi, where a significant portion of the population does not have access to the main power grid, off-grid DSM can be particularly important for improving access to energy and promoting sustainable energy use.

One example of an off-grid DSM initiative in Malawi is the promotion of Solar Home System (SHS). The SHS provides households with a small solar panel, a battery, and a few LED lights, which can be used for lighting and charging small electronic devices. The program is designed to promote energy access and improve energy efficiency by replacing traditional kerosene lamps and batteries with clean, reliable solar power.

To promote DSM in the SHS, the Private Sector in Malawi implements a tariff structure that encourages energy conservation and efficient use of energy such as Pay As You Go (PAYGO). The tariff structure includes a fixed monthly charge and a variable charge based on energy consumption, with higher rates for higher levels of energy consumption. This encourages households to use energy efficiently and avoid wasteful consumption.

Another example of off-grid DSM in Malawi is the use of energy-efficient appliances and equipment, such as energy-efficient refrigerators and cooking stoves that do not need power from the grid. By using energy-efficient appliances and equipment, households can reduce their energy consumption and improve the efficiency of their off-grid energy systems.

Overall, these policies and initiatives demonstrate Malawi’s commitment to improving energy efficiency and promoting sustainable energy use. While there is still much work to be done to improve energy efficiency in the country, these efforts are an important step towards building a more sustainable and resilient energy system.

PLANNED ENERGY EFFICIENCY MEASURES

As additions to current Demand Side management measure, some of Malawi’s targets are to disseminate 5,000,000 energy efficeint cookstoves and 40,000 solar water geysers/heaters by 2030 from the current 2000 (SE4All Action Agenda for Malawi 2017).