Keywords: demand-side management, electric utilities, energy-emission model, incentive regulation, least-cost planning
LCP/IRP strategy development using an optimising energy-emission model
This paper proposes an energy-emission modelling approach for the development of least-cost planning and integrated resource planning strategies for electric utilities, and presents results of the model application to the municipal electric utilities of Karlsruhe and Rottweil. The LCP/IRP strategy employed is based on the regulatory practice in Germany, also with regard to liberalisation issues. Furthermore, emphasis is given to the adequate modelling of demand-side management (DSM) programmes, including their effects on electricity generation, capacity expansion and electricity purchase. The results show that selected DSM programmes in the household sector lead to a cost-effective reduction of electricity demand. When ecological considerations, such as a reduction of carbon dioxide emissions, are included, the cost of electricity generation increases, as does the potential for DSM savings. However, when a revenue-based approach is used, it is evident that extrinsic economic incentives for DSM need to be given by, for example, regulatory authorities.