Integrated Resource Strategic Planning and Power Demand-Side Management

With the increasing threat of global climate change and growing calls for environmental protection, power utilities consider both supply-side and demand-side resources in developing generator expansion planning. Moreover, integrated resource planning (IRP) theory has been rapidly developed and demand-side management (DSM) has been vigorously advanced. Reforms of the electric power system have divided power utilities into power generation enterprises and power distribution enterprises, each of which have lost the functions of unified planning and operation of generation, transmission, distribution, and utilization and are incapable of performing IRP; therefore, DSM has lost its theoretical basis. Although IRP is forcibly separated from DSM by the separation of power generation and distribution, the government can still perform macro-control of power generation resources and demand-side resources. Integrated resource strategic planning (IRSP) thus can play an important role in national strategy and become the theoretical basis of DSM in the new period. This chapter introduces theoretical knowledge and practical experiences, such as IRP, Integrated resource strategic planning (IRSP), DSM and Efficiency Power Plant, and also presents the application of the IRSP model.

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.

Continuous and healthy development of demand-side management (DSM) requires that the government adopt perfect policies and measures, and create and develop a sound system and mechanism for DSM implementation. The government is the main organization with a duty to the whole society, represents integrated social interests, is best placed to coordinate the interests of all parties, and is the dominant power and catalyst for DSM. This chapter introduces why the government is treated as the dominant power in implementing DSM, feasible measures for DSM, and the successful experiences of other countries’ government; moreover, case studies are presented to introduce ways for the government to evaluate social benefits.

In a system where power generation enterprises are separated from power distribution enterprises, the latter naturally assume full responsibility for Demand-Side Management (DSM) implementation since it directly involves large electric power consumers. China’s power distribution enterprises perform effectively in many aspects, i.e., energy efficiency management, load management, and orderly power consumption. Orderly power consumption is one aspect of DSM with Chinese characteristics, and sees power distribution enterprises coordinate with government organs to resolve imbalances between supply and demand. This chapter will introduce why power distribution enterprises are treated as the main organs for DSM implementation, as well as experiences of other countries relevant to the effect of orderly power consumption in China.

Energy service companies (ESCOs) always vigorously promote DSM implementation during all periods, and among these companies contract energy management is the best method for advancing the continuous and healthy development of the energy conservation service industry and DSM. Moreover, numerous countries have implemented this management method. With policy support and the establishment of practical mechanisms, China’s ESCOs have witnessed dramatic growth and the energy conservation service industry has rapidly developed. This chapter introduces why ESCOs are treated as the backbone of DSM, as well as experiences in facilitating the healthy development of DSM, which relies on the connotation of ESCO, implementation flow of the energy management contract (EMC) or energy performance contracting (EPC) project and methods of the ESCO to perform energy conservation analysis, financing analysis, and project risk analysis.

Electric power consumers are the basis for demand-side management (DSM) practice. Increased power consumption efficiency, improved power consumption patterns, and implementation of orderly power consumption scheme can be realized only if power consumers participate. DSM becomes meaningless without the participation of electricity consumers. The good news is that the energy conservation consciousness of electricity consumers is continuously improving and the enthusiasm and motivation for DSM participation are also growing. This chapter introduces why electric power users are treated as important participants of DSM; moreover, ways and patterns by which electric power consumers from industrial, commercial, and other fields participate in DSM are introduced.

For the past 30 years, demand-side management (DSM) theory has been developed and improved continuously, and has played a vital role in energy-saving and emission reduction in electric power industry. Based on bottlenecks from increasingly limited energy resources, growing environmental protection pressures and intensifying electrical power industry reforms, DSM will continue developing. However, DSM research and implementation will confront new environments and new evaluation criterion, making new incentive mechanisms and implementation measures necessary. Given the ongoing electricity industry reform, this chapter focuses on introducing clean development mechanism (CDM) and white certificate.

Demand-side management (DSM) work involves systematic engineering because it not only requires analysis and treatment of complicated data and miscellaneous details, but also evaluates various relevant policies and measures. Support for DSM is continuously growing as society evolves. Establishment of a DSM laboratory would be worthwhile not only to improve the efficiency of DSM work, but also to make DSM policies and measures more scientific. The State Grid Energy Research Institute is now focusing on constructing a DSM laboratory. This chapter introduces information on the DSM laboratory under construction by the State Grid Energy Research Institute from perspectives such as basic concept, overall structure, key technologies, function of major modules, and analysis methods.