Linking Reforms and Energy Efficiency to Explore the Possibilities for IRP and DSM in the Liberalized Internal European Electricity Market

This paper investigates the impact of the completion of the liberalized European Internal Electricity Market on Integrated Resource Planning (IRP) and Demand-Side Management (DSM). The results presented are part of the outcomes of a study analyzing the possibilities of IRP and DSM in this new industry environment. The study, finished in May 2000, is based on empirical surveys of both the present and the emerging electricity market structures, as well as of IRP and DSM activities in the European Union countries. The interim results were discussed with practitioners from the eight countries participating in the study.

The first part of the paper presents a dynamic characterization of the restructuring process in each of the European Union countries participating in the study. Topics include the planning procedures and the legal, regulatory and institutional frameworks with regard to the incentives or disincentives for IRP and DSM. The second part of the paper reviews the past, present and planned DSM and IRP support mechanisms, including public benefit charges, ratemaking, obligations. Finally, a relationship is established between the electricity market structures and characteristics, and the level of IRP and DSM activities. The results show the difficulty in finding a common field for action at European Union level. Proposals for such common action are presented in a second paper at this Conference.