Modelling and economic analysis of DSM programs in generation planning

This paper presents a technique to model demand-side management programs into production costing analyses within the framework of equivalent load duration curve and frequency and duration method. The technique allows a single simulation to study probabilistically the impact of DSM on loss-of-load probability, energy not served, energy consumption and cycling costs of power plants. Also the importance of incorporating the cycling costs of power plants in the cost-effectiveness analysis of DSM programs is presented. Comparable results are achieved when the technique is tested against the avoided cost method of two simulations by applying them to IEEE RTS data. The results also reveal that avoided start-up cost is a major benefit of DSM. The applicability of the paper is relevant to vertically integrated utilities.