IMPACTS OF DEMAND-SIDE MANAGEMENT ON POWER SYSTEM ADEQUACY AND COSTS

Abstract

Electric utilities are responding to public concern regarding the environment and the desire to conserve natural resources placing increased attention on the customer side of the meter. Demand-side management (DSM) is now an important consideration for electric power utilities. DSM, in general, refers to any activity adopted by a utility that ultimately changes the utility's system load curve. The goal of DSM is to make changes in the time pattern and the magnitude of the load seen by the utility. Power utilities view DSM activities as a way of making their power system operation more efficient and cost-beneficial. This research deals with the assessment of the effects of demand-side management on power system adequacy and costs in generating capacity planning. The methodology developed to quantify the effects of DSM on the system load curve includes a model which can be used to quantify the basic load shaping goals of DSM activities. Twenty new load models were simulated to represent the basic load modification goals of DSM. The developed methodology can be used as the basic framework in the design and implementation of a utility DSM program. This research activity examines the long term economic and reliability implications of DSM using a hypothetical test system. A Monte Carlo simulation approach is utilized to estimate the Interrupted Energy Assessment Rate (IEAR) and to examine the effects of DSM on system adequacy. The integration of supply-side and demand-side planning in reliability cost / reliability worth analysis is illustrated in this thesis. Studies were conducted to assess the effect of the considered DSM initiatives on the planning reserve margin and on the total societal cost of electricity. This total cost includes the system costs and the customer interruption costs but does not include the costs associated with implementing DSM. Generation expansion studies were used to examine the effect of DSM on future capacity requirements over a 30-year planning horizon. The studies in this thesis illustrate that although there are benefits derived from demand-side management, these benefits must be weighed against the costs required to achieve them.