2. Basic Theory of Demand-Side Management

Demand-Side Management (DSM) is pivotal in Integrated Resource Strategic Planning/Integrated Resource Planning (IRSP/IRP) and provides innovation to support energy-saving projects, systematic engineering for human beings to realize sustainable development, and advanced energy management activity. A project can be implemented only when the associated output exceeds the cost and the cost recovery period is reasonable. Understanding the basic concept of DSM helps master the overall situation, and understand the implications and essence of both DSM and IRSP/IRP. This chapter introduces theoretical knowledge and practical experience, for instance, the key concepts and operating mechanism of DSM, and also looks at methods of cost benefit analysis.