Voice of the Customer - Chennai and Madurai

Voice of the Customer - Chennai and Madurai

We surveyed 15 customers across all commercial building segments in the period September to November 2012 . In the same period we surveyed 5 commercial building customers in Madurai. Here is what they have to say:

Power shortage is a serious issue with customers in Tamil Nadu.

Electricity users in Tamil Nadu have been facing a suffering from severe power shortage since August 2012. In some cases, customers are using more number of units from the DG set than from the grid!

Units consumed from Grid and DG set

DG/Grid usage in Chennai	DG/Grid usage in Madurai

Source: New Ventures India Surveys. Numbering for Madurai is in continuation of numbering for Chennai. The 15 data sets for Chennai include offices, educational institutes, hotels, hospitals and retail malls. The 5 data sets for Madurai include educational institutes, hotels, hospitals and retail malls. Surveys conducted September to November 2012

Customers do not have grid power - often for more than 5 hours a day

Number of Grid Outage Hours when DG set has to be used

Outage hours/day in Chennai	Outage hours/day inMadurai

Source: New Ventures India Surveys. Numbering for Madurai is in continuation of numbering for Chennai. The 15 data sets for Chennai include offices, educational institutes, hotels, hospitals and retail malls. The 5 data sets for Madurai include educational institutes, hotels, hospitals and retail malls. Surveys conducted September to November 2012

Outage during operating hours when DG sets have to be used is considered – referred to as outage hours in the graph above.

In Chennai, based on location, duration of power cut varies. In Chennai, the buildings 1 and 8 are an office and an educational institute respectively, each of which have 12 hours of load shedding per day. They operate for 24 hours. The office is located 50kms and the educational institute is located 35kms from Egmore area in the main city. Hotels, buildings 9,10 and 11 also operate for 24 hours. Buildings 4 and 6 have 5 hours of load shedding, but they use the DG for only 1 hour as they draw wind power, reducing the hours of outage to 1 hour only.

The building 19 in Madurai is an exception due to the continuous access to power, which indicates that even within a city there could be differences in power availability patterns. Buildings 17,18 and 19 are located in the main Madurai city. DG set usage is higher in 17 and 18 as they are hotels with 24 hours of operation. Building 16 is located in the outskirts. While buildings 16 and 20 have the average 9-12 hours of operation in a day.

Customers are running their DG but DG power is expensive

Unit power costs from DG set vs. Grid

Cost of electricity from DG vs. Grid in Chennai (Rs/kWh)	Cost of electricity from DG vs. Grid in Madurai (Rs/kWh)

Source: New Ventures India Surveys. Numbering for Madurai is in continuation of numbering for Chennai. The 15 data sets for Chennai include offices, educational institutes, hotels, hospitals and retail malls. The 5 data sets for Madurai include educational institutes, hotels, hospitals and retail malls. Surveys conducted September to November 2012

Use of DG is pushing up weighted average cost of power

Weighted average cost of electricity

Unit cost of electricity (DG+Grid) in Chennai (Rs/kWh)	Unit cost of electricity (DG+Grid) in Madurai (Rs/kWh)

Source: New Ventures India Surveys. Numbering for Madurai is in continuation of numbering for Chennai. The 15 data sets for Chennai include offices, educational institutes, hotels, hospitals and retail malls. The 5 data sets for Madurai include educational institutes, hotels, hospitals and retail malls. Surveys conducted September to November 2012

However, customers are still not using basic Renewable Energy and Energy Efficiency technologies

Customers are only aware of LED lights and Solar water heaters and (to a limited extent) Green Power Purchase. Customers are not aware of other technologies. But even with LED and Solar water heater penetration levels are very low.

Technology	Chennai	Madurai
LED	None of the 15 places we interviewed had 100% replacement. 4 had partially replaced their lights with LEDs and 11 had not yet done anything	None of the 5 places we interviewed had 100% replacement. 1 had partially replaced the lights with LEDs and 4 had not yet done anything
LED	None of the 15 places we interviewed had 100% replacement. 4 had partially replaced their lights with LEDs and 11 had not yet done anything	None of the 5 places we interviewed had 100% replacement. 1 had partially replaced the lights with LEDs and 4 had not yet done anything
Solar water heater	2 of the 7 places which had hot water requirements used solar water heaters. Remaining 8 places had no hot water requirement	1 of the 4 places which had hot water requirements used solar water heaters. Remaining 1 place had no hot water requirement

Source: New Ventures India Surveys. Numbering for Madurai is in continuation of numbering for Chennai. The 15 data sets for Chennai include offices, educational institutes, hotels, hospitals and retail malls. The 5 data sets for Madurai include educational institutes, hotels, hospitals and retail malls. Surveys conducted September to November 2012

Customers have serious perception issues

We asked customers, who are not using specific technologies, and here are their top reasons for their hesitation:

Renewable Energy /Energy Efficiency	Top reasons why customers have not used these technologies in Chennai and Madurai
LED lights	LEDs are expensive and they have to supplemented with sensors to increase the efficiency which additionally increases costs
Solar Water Heaters	There is not enough space for a solar installation on the roof top
Green Power Purchase from wind farms	Green power from wind is not reliable Subsidies are limited or not available due to demand outstripping supplies

More worrying, Customers have usage issues

We asked customers, who are using specific technologies, and here are the top usage issues they have experienced:

Renewable Energy /Energy Efficiency	Top issues that customers have faced in Chennai and Madurai
LED lighting	There are high failure rates of auxiliary electronic unit like the rectifier unit, heat sinks and sensors. Frequent power cuts creates surge which results in these failures Quality of installed product does not meet required lumen requirement The right type of fixtures is not available for retrofits and retrofit installations require more time to break even
Solar water heater	There are space constraints as the roof tops of commercial buildings are used for utilities or other purposes. The projects are often not able to move beyond pilot stage
Green Power Purchase from wind farms	It is difficult to identify the right supplier and suppliers are not reliable There is no fixed price for this model. Demand exceeds supply causing PPA prices to escalate. Customers have low negotiating power and inadequate knowledge Wind power is not reliable. DG sets have to be kept as back up despite signing a PPA

At the same time customers have started experiencing real benefits

We asked customers, who are using specific technologies, and here is what they had to say:

Renewable Energy /Energy Efficiency	Top benefits customers are deriving in all cities
LED lighting	Helps in reducing the operating cost
Solar water heater	Performance is satisfactory and as per expectations
Green Power Purchase from wind farms	Helps in handling scheduled power cuts and in meeting demand during peak hours