POWER SYSTEM PLANNING detailed studies of electricity usage pattern of their
CHAPTER 4 - LOAD RESEARCH customers and other influencing factors the possibility
Introduction
• Energy has become an almost “life-line” type of
commodity for all societies. It fuels the
socioeconomic process and enables people to
attain
a comfortable life style. However, consumption
of energy forms should be rationalized because
sources are limited and indeed they are diminishing.
• Electricity is one key source of energy. It is
known as a relatively “inexpensive” as well as
“clean” source of energy. However, if demand
for electricity grows beyond control there might
not be enough supply to cover all the demand.
• This unfortunate situation will cause discomfort
to people and probably disruption of economic
production. Therefore, it is very important to
properly plan, operate and control the power
system which delivers electricity to all consumers.
• Consumers of electricity vary in the amount
of electrical energy and electrical demand drawn
from the network. That is why electrical power
companies classify such consumers, or customers,
into several classes. This classification is based
on characteristics of demand; behavioral issues;
and other considerations related to location,
climate, and status to name a few.
• The quest and accumulation of this customer-related
information is called load research. With load
research the electricity company, or companies, will
be aware and hopefully knowledgeable in the
composition and trends of demand of consumers.
This essential knowledge will be the basis for pricing
electricity properly, and fairly. Moreover, the
electricity company can predict future demand
based on such information. Therefore, new
expansions, enforcements, or extensions will be
affected to cater for any future demand.
• On the other hand, proper operation and control
of the power system requires all the information
available on consumers and consumption patterns.
With the aid of this information the electricity
company can minimize production cost, plan
maintenance schedules, and control the quality
of power delivered to all consumers. This would
be reflected in leaner electricity tariff and
consequently in affordable bills.
• Electric companies historically believed their business
is simply to sell electricity, thinking they had no choice
but to keep supplying the demand. Some still think
this, but the majority now realizes that it’s usually
cheaper to convince their customers alter their
consumption habits rather than try to sell them more
of it. “Demand side management,” is the act of
attempting to manage demand of consumer to
achieve energy efficiency.
• Load research is a very essential tool and a
prerequisite for demand-side management. It has
been, and still is being, used by electricity companies
throughout the world. Load research data is used to
develop kWh-to-peak-kW conversion factors, diversity
factors, and average time varying
load data as a function of customer class, month,
and type of day.
• Load research can provide useful information for
planning and designing utility distribution systems by
means of proper load estimation. The estimation
of loads determines the size and location, or site,
of an electric plant and the associated network
equipment needed to deliver the electric power
to consumers. Moreover, the estimation of future
loads requires an understanding of the characteristics
of the various load components.
• Load research enables the management of power
companies to make effective decisions. Through
of making certain changes on end-use patterns can
be assessed. Such studies are based on either
individual end-uses or in total aggregates and they
require sound knowledge in the areas of statistics,
marketing research, electrical engineering and social
sciences. For example, the load research effect on
demand side management and energy efficiency.
• At many utilities end-use load data are collected
from a large number of customer sites at 15-minute
intervals for multiple seasons and even years. As a
result, load research data is voluminous. Thus,
designing a load data system that can respond to
data requests in a timely and effective manner is
becoming an important planning and operations
goal facing many electric companies.
• The main distinguishing characteristic of load
research is its focus on the time-related pattern of
electricity usage, throughout any time period. A
major application of load research analysis is the
design and setting of retail tariffs for electricity supply.
• Due to lack of field measurements, data used
in network analysis have various degrees of
uncertainty. The use of fuzzy load models can
address this issue. Customer hourly loads obtained
from load research are converted to fuzzy
membership functions based on a possibility
probability consistency principle.
• Hourly load research data for residential customers is
used to calculate diversity factors and kWh-to-peak-
kW factors. The customers are grouped into two
classes based on their consumption patterns. With
the use of control samples, comparisons are made
between estimated and measured peak kW.
Estimated daily load profiles are also calculated and
compared to measured daily load profiles.
• Load behavior needs to be considered in the
algorithms for distribution systems fault locations to
reduce the resulting error to practical limits. A new
modeling methodology referred to as the “fast
response model” reduces such errors.
• Load research data is used to assess the cost/benefit
of various Demand Side Management (DSM)
programs. The costs and benefits of each DSM
program are easily and readily estimated according
to load research information.
LOAD RESEARCH METHODOLOGY
• A typical electrical consumption survey may
contain general information regarding the customer,
the monthly, daily, and annual electrical
consumption, ownership of electrical appliances,
etc. This addition information is usually filled by
the customer during an interview.

• Moreover, the lighting information can be collected
using a survey similar to the one shown
SAMPLING DESIGN
This is an important step in the load research overall
process; since it will guarantee that the collected
data and results reached are of high confidence
and represent real life. The design involves the
following important factors:
• Defining the Target Population: Definitions are made
in terms of elements (e.g. old meters or new meters),
sampling units (e.g. households, industrial), extent
(geographic aspect, e.g. city) and time (e.g.
winter).
• Determining the sampling Frame: This
step consists of preparing a list or set of
directions for identifying the target population, e.g.
(connected load, type of industry,
etc).
• Selecting a Sampling Technique: This step results in
several decisions of a broader nature. A Bayesian,
traditional, probability, and/or non-probability
sampling approaches can be used. These involve:
o Simple Random Sampling
o Systematic Sampling
o Stratified Sampling, and
o Cluster Sampling.
• Determining the sample size: Sample size is influenced
by the average size of the samples in similar studies,
and are defined based on experience.
A guideline steps may be as follows:
a) specify the level of precision,
b) specify the Confidence Level (CL),
c) determine the z value associated with CL,
d) determine the standard deviation of the
population,
e) determine the sample size using formula for
the standard error.
To control this procedure, then the following factors
must be considered:
o Apply finite population correction when the
sample size is represents
10% of the population Re-estimate, if
necessary, the confidence interval.
o Apply statically defined equations
to define sample size if precision is
specified in relative terms.
• Executing the sampling process: Detailed
specifications of how to implement the
sampling design decisions must be provided. This
requires design of a preliminary questionnaire to
identify various DSM projects. The analysis of the
preliminary questionnaire my require developing a
detailed questionnaire that leads to further setting of
standards and best practices for different utilities
looking forward to implement DSM initiatives.
USES OF LOAD RESEARCH RESULTS
• Load research activities are carried out by electric
companies in order to know the appliance ownership
characteristics, load profile, and consumption habits
of the various consumers being served. With this
information the essential elements for taking any
decision are basically secured. Information
generated through load research serves several
business functions within the electricity company.
• These include the following:
➢ Load forecasting
➢ Energy efficiency and demand side
management
➢ Tariffs and power purchase prices
➢ Power system expansion studies
➢ Operation optimization of power system
➢ Customer relationships and market preferences
➢ Load profiling and consumption habits
➢ Socio-economic drives and influencing factors
➢ Competitive advantage and benchmarking
studies.
• Load research results provide a valuable input to
decision makers in the electricity companies prior to
embarking on any plan, project or program that
touches on the supply of power or power quality to
consumers. It involves huge amount of data to be
collected periodically and diligently. The information
not only covers technical matters, but it also covers
socio-economic and market information.
• One example for the need for added information is
when an electricity company notices a shift in the
consumption pattern of certain consumer groups
towards heating or cooling requirements. In such a
case information regarding availability,
characteristics of such electric appliances, prices
and consumption figures are all needed.
• Moreover, information regarding all competing
alternative appliances is also collected. The load
research studies and analyses would lead to the
identification of any possible shifts in the load profile
or timing or value of peak loads, etc. These results are
very important in all the categories listed above and
their effect in any decision cannot be
overemphasized.
DRIVING FACTORS
• The electric load is influenced by many factors. These
are called driving factors which determine how the
load is shaped during a given period of time. The
driving factors or influencing factors determine in
addition to the load profile the estimation of future
load profile including consumption pattern, peak
load, minimum load, and load factor. The latter
parameter is a measure of the efficient use of the
power system. Higher load factor means better
utilization of plant and equipment installed to meet
customer loads.
• The driving factors are classified as follows:
a) Customer factors
b) Time factors
c) Climate factors
d) Other electric loads
e) Previous load values
f) Socio-economic situation
g) Market conditions
h) Regulatory framework of the electricity
supply industry
Customer Factors
• The first factor is related to the customer categories.
These usually are classified into industrial, commercial,
services, residential, agriculture, etc. Each customer
class must be sized according to energy
consumption and contribution to peak load.
• Moreover, the details of consumption for a typical
consumer from this category must be known.
Statistics of customer numbers, locations, type and
size of electricity consumption are key factors to be
collected. More importantly, the future estimates of
such statistics are also very much needed. This group
of factors helps in determining or designing certain
demand side management or energy efficiency
programs. It also identifies candidates for tariff
changes or certain regulatory measures.
Time Factors
• Time factors come into play because the
electric load varies with time. This variation is
important to consider as its effect on the total
load profile is great. Therefore, daily load curves
for each customer category or even sub-category
are needed. This information shows the pattern
of consumption during the day.
• The same is also needed for each month of the year
and the year as whole. From this data the shape of
the aggregate daily load curve is determined. The
seasonality of consumption comes from comparing
month by month. Finally, the overall annual load
curve determines the annual peak load, minimum
load, and their respective timing during the season
and the year. This group of factors helps in
determining the timing of certain demand side
management or energy efficiency programs.
Moreover, the impact on the total system
performance can be depicted from this information.
• Time factors are inter-related to climate factors
as explained later. Other loads that can be affected
by the time include seasonal tourism, and other
special national occasions. Also, on a daily scale
the variation of electric load from week day to
week end is very important.
Climate Factor
• Climate factors are those related to the climate
and weather expectations. There are certain climate
conditions that are fixed throughout the year for
each country. However, temperature variations and
climate changes have been witnessed in certain
regions of the world recently.
• The combination of both types of information gives
an insight on what to expect from the climate in the
near future. It should be understood that electric
loads are divided into weather-sensitive and non-
weather-sensitive loads. Time factors naturally affect
and shape the weather-sensitive loads. These include
heating or cooling loads. In certain countries that
have a clear dominance of residential and
commercial loads the effect of climate factors is of
paramount importance. In other countries where
producing sectors, such as industry, agriculture, and
services, represent the majority of total system load
these climate factors are of less importance.
Other Electric Loads
• The interaction of electric appliance loads is
another group of factors that have an influence
on load research. For example, if using certain
appliances requires the use of other appliances or if
it negates the need for other appliances, this will
have an effect on load profile and shape. On the
other hand the interchangeability among several
forms of energy to have a final use such as heating
or cooling have an impact on load research results.
Sometimes, switching from one form of energy
to another could take place because of efficiency
differences or tariff considerations.
Previous Load Values
• It is well known that electric loads have many
periodic patterns. This characteristic is often used to
attempt to predict future load values. Segmentation
of previous load values per customer class is needed
to be able to accurately predict future loads. This
information is essential for load forecasting.
Socio-economic Situation
• Socio-economic situation information includes
the sectoral as well as the national economic
production and efficiency measures. With this
information one can determine priorities for
load research activities, starting with the most
influential sectors. Moreover, government plans
for developing certain geographic areas or social
class of citizens must also be incorporated in load
research activities
• For example, if government plans to encourage the
establishment of large industrial or commercial
complex in one area, what will be the implications on
the electric power networks in that area?
• Information on income levels of various consumer
categories is also very important. This provides
insight on the willingness to participate in any
future energy efficiency or DSM programs.
Market Conditions
• Market conditions regarding availability of certain
appliances in the market as well as their market
share, competition, efficiency, prices, etc. are
important to load research. They determine the
possibility of switching from one form of energy to
another. They also determine the chances of success
of certain programs or projects. The competition
among electricity companies in an open market
situation enters into play here to attract customers.
Regulatory Framework of the Electricity Supply Industry
• Regulatory framework of the ESI determines the
speed and ease of introducing certain energy
efficiency programs. If the regulatory body offers
certain incentives for energy efficiency programs
then the electric companies will work hard to
implement such programs. If this is built in the tariff
determination process then it will be even more
pronounced.
LOAD MODELING
• Load modeling is the process whereby the planner
obtains adequate information regarding the variation
of load during a given time period. The difficulty in
load modeling is that information regarding electric
load or demand (MW) for all consumer groups is not
readily available. For those consumers that are
charged per their demand the information is logged,
while for all other consumers such as residential, small
commercial, small industrial and others only energy
consumption figures (KWh) are available. Therefore,
modeling is needed to derive demand consumption
details.
• The information collected and analyzed in load
research leading to estimating load modeling can be
classified into the following
➢ Consumption related information
➢ Market information
• The consumption related information is, in turn,
divided into
➢ appliance ownership statistics,
➢ consumption attitudes, trends and habits,
➢ awareness about cost of supply and energy
efficiency issues,
➢ willingness to participate in voluntary or
incentive-driven energy efficiency programs
• The appliance ownership statistics, along with
consumption attitudes; trends and habits, will
contribute to estimating demand curves for the
various consumer classes. The aggregation of such
information on the country level will result in
estimating the demand curves for the country.
Moreover, future changes and demand curves can
be extrapolated from such information.
• The information related to awareness about cost of
supply and energy efficiency is important to gauge
any present or future attitudes towards changing the
consumption pattern. On the one hand the
knowledge about cost of supply will drive the change
mechanism and formulate the motive. On the other
hand, the awareness about energy efficiency issues
will constitute the foundation and bases for energy
savings.
• Finally, the willingness-to-participate in energy
efficiency programs will modify the consumption
pattern and influence the change in consumption
• The market information can be divided to:
a) consumption drivers,
b) change drivers, and
c) exogenous drivers
• The consumption drivers are related to the socio-
economic status of the consumer. In particular this
information includes income, cost of living, inflation,
electricity tariff, social status, and living standard. This
information is combined with the consumption
related information to produce the consumption
figures.
• Change drivers on the other hand are related to
factors that will have some influence on
consumption. These include
• The exogenous drivers include the technological
trends regarding energy efficiency of electrical
appliances, development of the power system, and
deregulation of the electricity supply industry. In a
load research study, the objective is to formulate the
load curves of all consumer categories.
• The daily load curve is an essential building block for
achieving this objective. However, to have useful
information consumers must be divided into sub-
levels. The criterion in the division is to group all
consumers of the same category having the same
consumption trends. This division, within the same
consumer group, could be attributed to socio-
economic status, geographic location, tariff, etc.
• By doing this a sample is selected to represent each
sub-group. Then from analyzing the results of the
samples the overall consumption of the consumer
group can be derived. The aggregation overall
consumer groups will result in depicting consumption
curves for the overall system.
• The daily load consumption of typical customers is
shown in Table 3. The loads shown are the normalized
values referred to the peak load of the day.
• The corresponding daily load curves of these different
normalized demand types are shown
Typical daily load curves for various electric demands
SUMMARY
• Load research has a pivotal role in providing
accurate, valuable, and reliable data for the
decision making. This information is useful in many
power systems planning activities, including
➢ demand side management,
➢ tariff and regulatory decisions and agreements,
➢ financial planning,
➢ system expansion, and
➢ in customer service improvement
• Load research results provide a valuable input to
decision makers in the electricity companies prior to
embarking on any plan, project or program that
touches on the supply of power or power quality to
consumers. It involves huge amount of data to be
collected periodically and diligently. The information
not only covers technical matters, but it also covers
socio-economic and market information.
• Load research activities are carried out by electric
companies in order to know the appliance ownership
characteristics, load profile, and consumption habits
of the various consumers being served. With this
information the essential elements for taking any
decision are basically secured. Information
generated through load research serves several
business functions within the electricity company
such as load forecasting, energy efficiency and
demand side management, tariffs and power
purchase prices, power system expansion studies,
operation optimization of power system, customer
relationships and market preferences, load profiling
and consumption habits, socio-economic drives and
influencing factors, and competitive advantage and
benchmarking studies.
• The electric load is influenced by many factors. These
are called driving factors which determine how the
load is shaped during a given period of time. The
driving factors or influencing factors determine in
addition to the load profile the estimation of future
load profile including consumption pattern, peak
load, minimum load and load factor. The latter
parameter is a measure of the efficient use of the
power system. Higher load factor means better
utilization of plant and equipment installed to meet
customer loads.
• The driving factor include:
1) customer factors,
2) time factors,
3) climate factors,
4) other electric loads,
5) previous load values,
6) socio-economic situation,
7) market conditions, and
8) regulatory framework of the electricity supply
industry
• The information collected and analyzed in load
research leading to estimating load modeling can be
classified into the following:
o Consumption related information
o Market information
• The consumption related information is, in
turn, divided into
1) appliance ownership statistics,
2) consumption attitudes, trends, and habits,
 3) awareness about cost of supply and energy
efficiency issues,
4) willingness to participate in voluntary or
incentive-driven energy efficiency programs.
• The appliance ownership statistics, along with
consumption attitudes, trends and habits, will
contribute to estimating demand curves for the
various consumer classes. The aggregation of such
information on the country level will result in
estimating the demand curves for the country.
Moreover, future changes and demand curves can
be extrapolated from such information.
• The information related to awareness about cost of
supply and energy efficiency is important to gauge
any present or future attitudes towards changing the
consumption pattern. On the one hand the
knowledge about cost of supply will drive the change
mechanism and formulate the motive. On the other
hand, the awareness about energy efficiency issues
will constitute the foundation and bases for energy
savings. Finally, the willingness-to-participate in
energy efficiency programs will modify the
consumption pattern and influence the change in
consumption.
• The market information can be divided to:
a) consumption drivers,
b) change drivers, and
c) exogenous drivers.
• The consumption drivers are related to the socio-
economic status of the consumer. In particular this
information includes income, cost of living, inflation,
electricity tariff, social status, and living standard. This
information is combined with the consumption
related information to produce the consumption
figures.
• Change drivers on the other hand are related to
factors that will have some influence on
consumption. These include:
National economy parameters and future
estimation thereof
Population and demographic information
• The exogenous drivers include the technological
trends regarding energy efficiency of electrical
appliances, development of the power system, and
deregulation of the electricity supply industry.
 POWER SYSTEM PLANNING
CHAPTER 5 – ENERGY EFFICIENCY
Introduction
• Energy efficiency is the efficiency of using energy. We
are interested in the broader sense of energy
efficiency meaning how much output is produced by
an end-use device when it consumes energy and
how can we improve on this situation?
• In this context we are interested in doing more work
for less energy. At home for example, when we talk
about cooling, heating, or refrigeration we mean
how best to achieve our objectives with the least
consumption of energy?
• The inverse of energy efficiency in called energy
intensity. Increasing energy efficiency, or reducing
energy intensity, in most cases, will reduce energy
consumption and therefore, conserve energy. It often
will reduce costs and save money. The term energy
efficiency is used to describe efforts to reduce the
amount of energy required for leisure or to provide
products and services.
• Some of the examples include efforts such as
insulation, building materials, passive architecture,
energy saving light bulbs, more energy efficient
appliances, and altering consumption habits. Energy
efficiency also includes the design of efficient systems
and controls. For example temperature control or
process control are considered tools used in effecting
energy efficiency. Moreover, efficient building
designs and utilizing natural weather conditions are
ways to use energy efficiently.
• The objectives of performing energy efficiency are as
follows:
o Reducing energy costs, which may result in a
financial cost saving to consumers, utilities, and
the national economy
o Reducing environmental pollution
o Rationalizing the use of energy so that resources
can last longer
o Increasing security of energy supply by slowing
down the rate of depleting resources.
• Energy efficiency efforts are based on convincing
consumers to adopt energy efficiency measures.
Therefore, awareness is needed to educate
consumers about energy efficiency, available
technologies, processes, and benefits. When
consumers are convinced that there is a personal (or
societal) need to use energy more rationally then
energy efficiency programs succeed.
• Sometimes this convincing needs either an incentive
(carrot) or enforcing (stick) or a combination of both.
Once a reasonable level of awareness is reached
consumers voluntarily accept and become part of
energy efficiency efforts.
• Energy efficiency is the way to go forward; therefore,
countries are exerting all efforts to moving their
citizens to be more energy efficient. One should
realize the importance of energy efficiency as it can
help prolong the useful life of existing resources,
protect the earth and safeguard human beings.
• Thus energy efficiency has three main roles:
1) protecting the environment,
2) rationalizing the use of the different forms of
energy, and
3) saving money
• The first role is achieved through institutionalizing
energy efficiency tools and mechanisms. This in turn,
is achieved through manufacturing and trading
energy efficient products and hence cutting down
on the amount of energy consumed, which implies
less pollution into the environment. The change may
be also brought about by making people behave
differently when it comes to purchasing appliances,
or how they use such appliances at homes and
offices.
• The second role is related to saving the different
forms of energy. It is seen in the global scene of
seeking alternative fuels that lead to energy
efficiency. As there is an escalation of the prices of
fossil fuels, due to an imbalance between supply and
demand, energy efficiency is an effective tool to
help save on fossil fuel usage. Eventually, people will
move from being dependent on fossil fuels and
switch to depending on alternative options.
• Finally, saving money is the biggest contribution of
energy efficiency. At the end of the day customers
seek to reduce their energy bills which is consumed
by vehicles, appliances, heating cooling, etc. As a
result of energy efficiency measures customers will be
using much less energy and hence save money. It
should be emphasized, however, that energy
efficiency requires some sacrifice on the side of
customers. This is manifested by some self-imposed
changes to their lifestyles and energy consumption
patterns.
• To sum up, it can be stated that energy efficiency is a
general term used for all energy forms including
domestic or industrial fuels and electricity. Usually
energy efficiency efforts are directed to all forms of
energy because of the interchangeability and
switching among the various types.
• This is a requirement to guarantee the success of any
energy efficiency measure, since for a single
consumer all energy forms, used by this particular
consumer, compete together
ENERGY EFFICIENCY IMPACT ON ELECTRICITY
CONSUMPTION
• Energy efficiency involves activities that effect and
encourage a drastic change in electricity
consumption by end-users. It also involves the design
and manufacture of energy efficient appliances and
systems.
• In essence what energy efficiency means is to
achieve the following goals:
1) buildings are constructed such that to have
efficient use of energy,
2) appliances are designed and designated as
energy efficient or otherwise, and
3) behavioral changes to electricity end-users.
• In all that, there must be a shared responsibility
among all stakeholders including regulatory bodies,
electricity companies, appliance and systems
manufacturers, architects, construction engineers,
investors and contractors, and end-users. If all
stakeholders shoulder their responsibility then energy
efficiency will achieve its goals.
• In order to have a successful energy efficiency
program or activity we must make energy more
valued and appreciated by the stakeholders. We
must also build awareness by education and
motivation. This will lead us to the transformation of
behavior, which is considered the critical point in the
success or failure of any energy efficiency program or
activity. In other words if all stakeholders including
end-users reach to point whereby energy efficiency is
a priority to them then we can with confidence
assume that there will be success.
• Numerous benefits can be received by focusing on
increasing the efficient use of energy. These benefits
for increasing electric energy efficiency that cannot
be disputed are as follows:
➢ Lower energy bills: By decreasing energy
consumption, as compared to what was
expected, the average user will receive a lower
energy bill.
➢ Lower cost: Compared to supplying electricity
only from new power plants. Energy efficiency
programs can help defer investments in new
plants and lower the total cost of delivering
electricity.
 ➢ Modular and quick to deploy: Demand side • Other information is also available on the energy
management programs can be ramped up over label apart from the clear color-coded classification.
one to three years to deliver considerable For example, the energy label for light bulbs often
savings. Programs can target areas that are shows its ‘lumen,’ an indication of perceived power
congested where providing new supply is difficult of light, and ‘Watt,’ the consumption of joules of
in the near term. energy per second.
➢ Environmental benefits: Many of the negative • This energy label enables consumers to compare
environmental impacts of electricity generation appliances on the basis of energy efficiency, in
are mitigated through energy efficiency: addition to other considerations. Moreover, it
lowering air pollution, reducing greenhouse gas provides an incentive for manufacturers to improve
emissions and decreasing water use. the energy performance of their products.
➢ Economic development: Investments in energy
efficiency helps to create jobs and improve local
economies. Energy bill savings often gets
redirected towards activities that increase
employment. Long-term economic value is
increased through energy efficiency investments
in long-lasting property improvements to
buildings.
• Changes in energy consumption practices and
installed energy efficient measures utilized by the
consuming sectors are what provide these benefits.
These benefits are accrued by avoiding the costs of
increasing capacity for supplying energy. As energy is
reduced throughout the entire year, the supply curve
is shifted downward, therefore reducing marginal
energy and capacity costs.

APPLIANCE EFFICIENCY
• The new designs for electrical appliances target
energy efficiency more than any other parameter.
This trend is picking up momentum world wide.
People are more aware than before about energy
efficient appliances and consider it one of the most
important factors influencing purchase. The main
driver to this behavioral change is the cost of energy
supply to homes, offices, and other businesses.
Consumers look for more efficient appliances to save
on their bills.
• Manufacturers, on the other hand, compete to have
a strong foothold in the market. They know that if their
products are not energy efficient they will be driven
out of market. Simultaneously, governments provide
several types of incentives to both consumers and
suppliers to select energy efficient appliances. All
these efforts culminate in replacing all appliances in
the market to energy efficient models.
• Many countries have adopted a labeling scheme to
point out to consumers about the energy
consumption of each appliance offered in the
market. This way consumers are well informed and
can take their decision to buy based on actual
independent assessment of the performance of
electrical appliances. Usually the labeling is carried
out by an independent third
party.
• All electrical appliances sold in
the markets of most countries
carry an energy label. Figure 1
is a washing machine label, as
per EU, and Figure 2 as per
Australia for heat pumps.
• The energy efficiency of the
product is rated in energy levels
ranging from A to G on the
outside label. ‘A’ stands for the
most energy efficient and ‘G’
for the least energy efficient.
• This Energy label for household
appliances is based on EU
Directive 92/75/EU. It provides
reliable and easily comparable
information on the energy
consumption of household
appliances. For refrigerators A+
and A++ are also available for
very low energy consumption
appliances.
BUILDING EFFICIENCY
• There is great potential for energy savings in any
community, municipality, or city. This energy saving
potential combines electricity and other energy
forms as well as water, waste, and all other utilities in
an effort to maximize the benefit). The energy saving
opportunities can be classified as per the introduction
stage as follows:
➢ Savings in the design stage of buildings and
facilities
➢ Savings in the implementation stage of buildings
and facilities
➢ Savings at a later stage as retrofit for existing
buildings and facilities promotion of energy
efficiency programs
➢ Promotion of energy efficiency programs at all
times
Savings in the design stage of buildings and facilities:
o Selection of the most energy efficient equipment
(including central air conditioning systems, air
handling units, chillers, lighting systems, etc.)
o Passive architecture designs (including natural
lighting, natural air circulation and ventilation, double
glazing, sun curtains, insulation materials for walls and
roofs, etc.)
o Selection of most efficient utilities (combined heat
and power, district heating system, common large-
size units, pressurized water systems, etc.)
o Proper design of the local electricity network
(including voltage level, conductor cross sections,
transformer ratings, substation arrangements, etc.)
o Selection of efficient street lighting system.
o Provision for mass transit systems for passengers and
freight (including light rail, escalators and people
movers, etc.)
o Provision for the introduction of renewable energy
sources (including solar water heaters, photovoltaic
electricity generators, fuel cells, etc.)
o Provision for biogas plant for electricity generation
from solid, municipal and industrial wastes.
o Selection of local raw materials, as much as
applicable, to conserve energy in transporting such
materials from long distances.
Savings in the implementation stage of buildings and
facilities
o Proper installation of systems and utilities.
o Use of original equipment and parts from genuine
OEMs.
o Following recommendations of OEMs.
o Selecting energy efficiency knowledge and
experience as a main criterion in selecting
contractors.
o Use of energy efficiency consultants in preparing
tender documents including specifications,
performance criteria, minimum requirements, etc.
o Short listing of appropriate certified and qualified
contractors.
o Appointing an energy manager in large projects.
o Use of energy efficiency consultants to monitor
progress of contracts.
o Use of contract bonus schemes for engineering value
judgment of contractors.
o Third party inspection of equipment for large scale
utilities.
o Performance testing prior to acceptance.
o Conformance to energy efficiency specifications
guarantees.
o Coordination meetings with all contractors during
implementation to monitor energy efficiency issues.
Savings at a later stage as retrofit for existing buildings
and facilities promotion of energy efficiency programs
o Conducting life-cycle cost replacement feasibility
studies for non-efficient equipment.
o Replacement of non-efficient equipment.
o Introducing Demand Side Management (DSM)
studies to determine cost-effectiveness of certain
programs for implementation.
o Introducing power factor improvement measures.
o Introduce electricity loss reduction programs.
o Introduce harmonics reduction programs.
o Increase electrical system reliability to increase
customer satisfaction and therefore, willingness to
pay for electricity.
o Designing certain incentive schemes for energy
efficiency programs.
o Conducting energy audits for industries, commercial
buildings, office buildings, recreational facilities, etc.)
o Introducing energy efficiency programs as a result of
the energy audits.
o Provision of financing schemes for the replacement
process.
Promotion of energy efficiency programs at all times
o Introducing Energy Service Companies (ESCOs) to
provide for energy efficiency programs for
consumers.
o Negotiating with the power, water, gas, municipal
waste utilities to have long term supply contracts to
benefit from reduced rates.
o Negotiating with the power utility/ company to have
an agreement to supply power to the network, from
in-site power generation facilities, for the same rate
as power purchased.
o Negotiating with the power utility/ company to have
interruptible load agreements for certain non-critical
loads to reduce electricity bills.
o Introduce local distribution tariffs for electricity, fuels,
gas, water, municipal waste, and all other utilities.
o Conduct awareness campaigns for energy efficiency
and appropriate programs.
o Conduct training programs for energy staff of large
commercial complexes, industries, high-rise office
buildings, facilities, etc.
o Promote the introduction of energy manger posts at
large commercial complexes, industries, high-rise
office buildings, facilities, etc.
o Promote the concept of green energy for businesses
that use or purchase power from green energy
sources.
o Introduce energy efficiency labels for equipment as a
mandatory requirement for manufacturing, importing
or selling any equipment.
o Introduce energy efficiency standards and codes for
building insulation.
o Introduce energy efficiency awards and prizes.
Building Energy Rating
• The BER label provides an indication of the energy
performance of the dwelling. BER compares the
energy demand and performance of a building. It is
similar to the energy label for a household electrical
appliance like the fridge.
• It is related to energy use for space heating, water
heating, ventilation, and lighting. The BER, similar to
the appliance label has a scale of A-G. “A” rated
homes are the most energy efficient and “G” the
least efficient.
• A detailed procedure is usually outlined to grant the
BER certificate. This differs from country to another,
however, all developed countries agree on the
vitality of issuing the BER certificate. Failure to secure
the BER certificate at the correct time results in
paying a fine and incurred delays in the legal
completion of the sale or leasing.
• In the USA, a BER certificate is compulsory for almost
all new homes since mid-2008. From 1/1/2009 a BER
certificate is compulsory for all homes being sold or
rented. It is the responsibility of the seller/landlord of
the property to provide this certificate for the buyer
or tenant.
• A BER is valid for up to 10 years provided there is no
material change to the dwelling that could affect
energy performance. Provisional Building Energy
Ratings for houses sold off plans are valid for 2 years.
On completion of such houses a full BER must be
supplied to the buyer.
• A BER is based on the characteristics of major
components of the dwelling, i.e.:
➢ Wall, roof, and floor dimensions,
➢ Window and door sizes and orientations
➢ Construction type and levels of insulation,
➢ Ventilation and air tightness features,
➢ Systems for heat supply,
➢ Type of lighting.
• Moreover, BER covers annual energy use for space
heating, water supply, ventilation, lighting and
associated pumps and fans calculated on the basis
of a typical family with a standard pattern of
occupancy. The energy performance is expressed as:
➢ Primary energy
use per unit
floor area,
which is
represented on
a scale of A-G
➢ Associated
CO2 emissions
per meter
squared per
year.

IMPROVING ENERGY EFFICIENCY
Manufacturing
• Many energy-intensity industries use fuels for heating,
manufacturing metals, treating ores, producing
chemicals, and other uses. Much of the heat that is
exhausted up smokestacks or otherwise wasted, or of
some the steam used in the manufacturing process
can be re-used. For example, it can be used to
preheat the air which is mixed with fuel before the
fuel is burned. This process is called preheating fuel.
To recover heat, a heat exchanger is used. A
household water heater is an example of a heat
exchanger. In this heat exchanger hot air, composed
of combustion products, is used to heat up water in a
tank. There are many types of heat exchangers and
many different uses for waste heat.
• Generating electricity for own use is another way
whereby some industries save energy, although this is
not considered more efficient than electricity
produced by large power generating plant.
However, overall energy is saved by utilizing the
waste heat. This is called “co-generation.” Another
way of increasing overall efficiency of energy use in
industries is what is called “combined heat and
power” or CHP. This is where both electricity and
steam are produced and used in the plant. The
industrial plant designs a large enough boiler to cover
for both purposes instead of having two boilers for
two separate purposes. This way the efficiency of the
larger boiler is higher than the sum of the efficiency of
the two smaller ones.
Transportation
• Cars today get many more kilometers per liter than
the cars of the early 1970’s and earlier. This is
because newer cars are lighter in weight, have
smaller engines, and are more aerodynamic. They
don’t accelerate as fast or are not built with to have
room for many passengers as their predecessors.
However, due to an increase in human mobility and
improved road networks there has been an increase
in gasoline consumption. If fuel efficiency of cars did
not improve the gasoline consumption would have
witnessed a much higher increase than it really has.
• The energy efficiency of trains is usually a few times
better than trucks due in part to the low rolling
resistance of the steel wheels of trains and due to the
fuel consumption per ton hauled. There is also less
wind force for a train since a train car is partly
shielded from the headwind by the car in front of it.
• Passenger energy efficiency (in passenger kilometer
per liter) is usually (but not always) about the same
for most modes of transportation. Intercity buses are
the most energy-efficient. Mass transit, as currently
operated, is not much more energy efficient than the
automobile. This is dependent on what percentages
of the seats are occupied. If the speed of a vehicle is
doubled the wind force increases 4-fold.
• Therefore, a short high speed train or light rail, as they
are called, may be less energy efficient than a small
automobile at lower speed. As for airplanes, they fly
high in the sky whereby the thin air helps reduce the
wind force; however, their high speeds cancel out
this advantage.
Residential and Commercial
• Most of this energy is for heating, lighting, and cooling
of buildings. Buildings in this context means
residential, office, and commercial buildings. Better
insulation in new buildings is required by law in many
countries. In some countries building codes require
even existing buildings to install insulation in the roofs
and walls to improve energy efficiency.
• Fluorescent lighting is more efficient that
incandescent lighting. Moreover, Compact
Fluorescent Lighting (CFL) is more efficient than the
regular fluorescent lighting. Solar energy can heat
water (or swimming pools)by having the sun heat
water in pipes on rooftops. Solar collectors that do
this may sometimes be seen on the rooftops of
buildings.
INCENTIVES MECHANISMS TO EFFECT EE
• In order to institute ant energy efficiency program or
activity it should first of all be cost effective.
Otherwise it will not last and not be instrumental. The
cost of any program or activity should be borne by
someone. Moreover, the benefits that would accrue
must cover the costs and have some balance
remaining to provide incentives for participants.
• These incentives drive participation from consumers
and electric companies. Other indirect participants
such as market players involved in manufacturing,
importing or trading with efficient appliances are
rewarded through market itself. The inauguration of
energy efficiency programs will open market
potential and business.
• The calculation of incentives is based on the
potential savings that would result from implementing
the programs. However, there should be some
allowances for errors in estimating the savings.
Naturally the information needed for program design
come from load research studies.
• The errors may come from several areas, including
inter-alia, the following:
➢ Misconception on the part of volunteering
participants which would lead to early
withdrawal from the programs
➢ Wrong or overestimated information about
energy saving potential
➢ Underestimation of costs especially costs of
administrating the programs
➢ Market distortions including competing non
efficient appliances, counterfeits, black market,
etc
➢ Lack of enabling legislations and regulations.
• In certain cases were electricity tariffs are subsidized
energy efficiency might not work. This is because the
market forces are distorted and do not reflect the
true cost of delivering power to consumers. Therefore,
the electricity company will not have the motive and
thus the willingness to participate in any energy
efficiency program. At the same time the consumer
will also not be motivated to participate. Similarly the
market will not be interested to acquire energy
efficient appliances or build efficient buildings.
• The aim of providing incentives is not to create the
energy efficiency opportunities, but rather to push for
their success. In other words the program might have
some chances of partial or marginal success on its
own merit, however, with the provision of incentives
success will be almost guaranteed. There are several
types of incentives targeting utilities, consumers, and
the market.
• Utilities are driven by financial incentives. These come
in different forms including:
1) tariff provision for ROI for energy efficiency
programs,
2) tariff provision for acceptable return on the
overall performance of the utility,
 3) financing the EE program, and
4) sharing the cost savings resulting from
generation and transmission operations
• Consumers look for electricity bill reductions. They will
also be enticed to participate if given tax incentives
or financing mechanisms to purchase EE appliances.
As for the market, tax and custom duty exemptions
form incentives that can drive the effort to promote
EE programs. Performance awards and trade
recognition in relation to EE program’s success can
sometimes have an attraction to the market
 POWER SYSTEM PLANNING
CHAPTER 6 – DEMAND SIDE MANAGEMENT
Introduction
• “Electricity supply industry is one of cost-based
administered pricing in retail markets with average
rates that often ignore highly variable supply-side
costs, i.e., wholesale electricity costs. Demand Side
Management (DSM) is customer response”.
• The changing use of energy in response to market
factors including controlled by the conservation of
energy, demand response defined by the prices
and/or production costs, and load management
which involves the demand shifting from high price to
low price periods. It is realized that efficient markets
require the appropriate interaction of demand and
supply. In an inelastic demand the supply-side will set
prices.
• Demand Side Management (DSM) is defined as the
cooperative activities between the power company
and its customers (sometimes with the assistance of
third parties such as various trade allies and energy
services companies). The main objective of such
cooperation is to implement programs for increasing
the efficiency of energy use, with resulting monetary
gains to the customer, utility and society as a whole.
• DSM was put under focus during the 1980’s to mid
1990’s after the oil embargo. The latter caused a
sharp increase in energy prices and caused
governments and electric utilities to look for ways to
reduce energy demand so that the overall energy bill
is reduced. This results in higher interests in Energy
Efficiency (EE) and the associated incentive policies,
and in the restructuring of wholesale and retail
markets to meet the move to the competitive
market.
• Another stimulus was triggered after the year 2000,
which was caused by the sharp increase of energy
costs (oil and gas), cost volatility causing price spikes,
power system constraints, and environmental
uncertainties. As such EE and Deregulation (DR) can
be viewed as hedges against a wide range of risks.
• It is seen that linking wholesale and retail markets
through appropriate pricing is important for the
industry. This leads to more pricing-types of solutions.
• Both EE and DR are viewed as integrated solutions of
the same spectrum of services. However, EE
supporters resist DR investments and EE/DR integration
• The present situation is ambiguous, as DSM supporters
are spending substantive amounts, while many
utilities are actively supporting DR to enhance
reliability and to go to floating prices where the
customer can shop around for the best deals.
• Moreover, as incentives for DSM investment are highly
supported, and renewables are becoming more
viable alternatives. DSM options are now viewed as
diversified resources and can provide a physical
hedge against different uncertainties.
• Benefits of the DSM initiatives are numerous. Some of
the most salient benefits are described as follows:
• Customer benefits including the following:
1) meet customer demand,
2) reduce electricity bills,
3) improve level of service, and
4) improve comfort, lifestyle, and productivity.
• Utility benefits including the following:
1) lower cost of service,
2) improved operating efficiency,
3) postpone capacity additions,
4) reduce capital needs, and
5) improve customer service by enhancing
system reliability
• Societal benefits including the following:
1) reduce environmental pollution,
2) introduce new resources,
3) increase economic efficiency,
4) introduce new job opportunities and business
formulation, and
5) maximize customer welfare.
CONCEPTS AND CHARACTERISTICS OF DEMAND SIDE
MANAGEMENT (DSM)
• The accelerated growth in demand for electricity
causes financial burdens on consumers as well as on
electric utilities. Increased electricity bills causes
consumers to consider the adoption of a more
rational use of electricity. At the same time electric
utilities are forced to take into consideration efforts
which will slow down this growth.
• Certain measures and activities can curb this growth
in demand into manageable levels which are also
economical and beneficial to consumers, utilities and
the national economy. These measures and activities
are integral parts of DSM programs.
• DSM is a term used to describe the activities and
ensuing programs that attempt to effect changes on
consumer behavior leading to a reduction in
electricity consumption. DSM falls under the more
general concept of energy efficiency. It strictly deals
with consumer consumption and is not concerned
with improving appliance efficiency or other design
considerations.
• DSM comprises any activity or program that is
designed within the wider energy efficiency function.
The participants in any DSM program are carefully
selected such that their collective response to the
program results in energy saving or shift in timing of
load demand. Therefore, the objective of any DSM
program could be peak load saving or simply shifting
in its timing from the peak load period to other off-
peak periods.
• DSM programs are implemented by consumers willing
to reduce their electricity bills, electric utilities
attempting to reduce investment requirements as
well as operational costs for electrical plants and
networks. The national economy will benefit by
optimizing the use of energy resources in a
sustainable way.
• The following figures illustrate all DSM programs. The
first strategy is concerned with improving the load
factor by filling the valleys by introducing incentives
for consumption in the low consumption periods of
the day. Peak shaving/ clipping, as the name implies,
is to reduce the peak load or to remove demand
form the peak period.
• The removed load may be relocated at other times
or completely removed. Load shifting means
removing loads from certain time periods to other
time periods.
• Flexible load shape is to affect dramatic change for
certain consumers to completely change the load
shape. This is usually done to certain consumer
groups with complete consumption elasticity. It does
not work for all consumers. Finally strategic load
growth and strategic conservation are strategies
dealing with conflicting directions.
• The first is applied when it is required to increase
demand in order to improve load factor or to
improve utilization of certain supply facility. This
applies to a newly developed area being supplied
from a new substation. The latter, which deals with
strategic conservation, is concerned with long term
actions aiming at enhancing conservation among
consumers.

The definition of each load objective shown in Figure 1 is
as follows (DSMTI, 1993):
➢ Peak Clipping/shaving: the reduction of utility load
mainly during periods of peak demand (morning or
evening).
➢ Valley Filling: the improvement of system load factor
by encouraging consumption during off-peak
periods.
➢ Conservation: the reduction of utility loads, more or
less equally, during all or most hours of the day.
➢ Flexible Utility Load shape: refers to programs that
design some options to change customer energy
consumption on an as needed basis, as in
interruptible/ curtailable contracts.
➢ Load Building: this is a strategic requirement which
could happen. It involves building loads, more or less
equally, during all or most hours of the day. The
objective could be to improve utilization rates of
available capacities.
➢ Load Shifting: the relocation of loads from periods of
peak demand to off-peak periods. Load shifting
typically does not substantially alter total electricity
sales.
ALTERNATIVES OF DSM
The following DSM is a list of alternative programs usually
used for the residual, commercial, or industrial consumers.
➢ Water heater thermal trap
➢ Heat pump water heater
➢ Water heater tank insulation
➢ Duct insulation
➢ Water pipe insulation
➢ Low temperature dishwashers
➢ Front loading clothes washer
➢ Low flow showerheads and faucet aerators
➢ Solar water heaters
➢ Compact fluorescents
➢ Standard high efficiency incandescent lamps
➢ High pressure sodium exterior lighting
➢ Window shading
➢ Window films
➢ Central air conditioner servicing
➢ Ground water source heat pumps
➢ Whole-house fan
➢ Ceiling insulation
➢ Wall insulation
➢ Basement/crawlspace/foundation wall insulation
➢ High performance windows
➢ Infiltration reduction
➢ Residential thermal energy storage
➢ Clock thermostat
➢ Microwave
➢ Induction range
➢ Dryer exhaust heat recovery
➢ Heat pump dryer
➢ Microwave dryer
➢ Air conditioning cycle
➢ Water heater control
BENEFITS OF DSM
• DSM programs, if cost-effective, will produce savings
in the form of reduced investment required to
expand the supply system to meet expected
demand. It could delay the need for investment,
which is equivalent to reducing the interest on capital
loans.
• On the other hand DSM programs are also beneficial
from the customer point of view. Finally these
programs are also useful for the national economy.
• The benefits for the electric companies participating1
or administering DSM programs are as follows:
➢ Savings in investment costs
➢ Additional revenue in the form of program costs
to be covered by consumes or other government
bodies. Moreover, the utilities may spin-off into
doing DSM programs
➢ Serving additional customers as a result of
reducing demand of original customers
➢ Improving load factors and hence improving
efficiency of production and delivery of electrical
energy
➢ Increasing customer awareness and participation,
which would lead to better relationship and
cooperation in other programs
• The benefits of DSM programs on customers can be
summarized as follows:
➢ Reduced bills
➢ Information update and increased awareness
regarding DSM activities and latest technologies
➢ Building up the energy saving culture which could
be generalized to other commodities and services
➢ Participation in pilot programs for free
➢ Special treatment and assistance during outages
due to appreciation for the participation in DSM
programs
• Finally the benefits that would accrue to the national
economy are:
➢ Introducing new DSM appliances or tools in the
market
➢ Providing for new employment and business
opportunities as DSM contractors
➢ Enhancing cooperation activities among
contractors, utilities, and customers
➢ Improving environmental situation by reducing
pollution
• The implementation of DSM programs is likely to
introduce the following changes:
➢ Improve the efficiency of power systems.
➢ Reduce financial burdens on utilities to build new
energy facilities.
➢ Improve the environmental situation.
➢ Lower the cost of delivered energy to consumers;
thus lowering O&M costs as well as consumer bills.
➢ Enhance system reliability by reducing power
shortages and power cuts.
➢ Improve the national economy by improving the
value added of the electricity sector.
➢ Increase job creation and new business ventures.
IMPLEMENTATION OF DSM
• DSM programs are very much dependent on the
power company and its associated customers.
• This figure describes various steps involved in
implementing a given DSM program.
 5) Comprehensive analysis and reporting processes
6) Conditional demand modeling capability
7) Energy and peak weather normalization
capability
8) Load and energy forecasting capability
9) Load research sample design and sample
capability
10) Load shape and measure data migration
services
11) Market transformation evaluations
Step 1: Load research 12) IRP development capability
• This stage in the DSM implementation will typically
assess the customer base, tariff, load profile on an • When DSM/EE assessment is completed, a
hourly basis and will identify the sectors contributing significant effort may be indicated, or perhaps
to the load shape. ordered by a power company. As the IRP elements
• This step is achieved through performing market and are approved, the next step is to turn groups of
consensus surveys, and it will identify peak load measures into focused DSM/EE Programs.
contributors. • The main objectives include:
Step 2: Define load shape objectives ➢ Bundling appropriate measures into cohesive
• Based on the results of the load research in the power programs
company, the DSM unit defines the load shape ➢ Developing comprehensive cost and labor
objective(s) most appropriate for the current budgets
situation. Peak clipping, valley filling, shape-shifting, ➢ Setting goals for individual program
load conservation, load building, and flexible load ➢ Implementing an ongoing evaluation protocols
shapes are identified in this step. in place
Step 3: Assess program implementation strategies ➢ Identification of internal and external resources.
• This step will identify the end-use applications and ➢ Identifying and contracting with, equipment
technology options that can be potentially targeted and service providers
to reduce peak demand, specifically in sectors ➢ Presenting the overall business for sponsors, and
contributing to system peak. This step will also carry for client’s senior management team
out a detailed benefit-cost analysis for the end-uses
and the power companies. In particular societal as
well as environmental benefits must be assessed.
Step 4: Implementation
• Implementation stage includes program design for
specific end-use applications. Moreover, program
promotion is carried out to the target audience. This is
accomplished through marketing approaches such
as advertising, bill inserts, and focus group meetings.
Testing of the viability of the program, as well as the
customers fed back is also considered in this stage
Step 5: Monitoring and evaluation
• This step tracks the actions designed to be carried
out during program design and implementation and
compares the same with proposed goals set by the
DSM program. A detailed and real benefit-cost
analysis is to be performed for customers and utilities.
• Moreover, the demand reduction and recovery in
addition to customer goodwill must be assessed. In
this stage it is important to implement methodologies
that serve in identifying the avoided cost of supply for
the power company against the total program cost.
• Items such as administration and O&M costs for the
power companies as well as benefits to the
participants including the reduced bills or incentives
to the end-users must be included

EVALUATION OF DSM ALTERNATIVES

• In today’s energy efficiency-conscious situation, it is
important that power companies engage in well
conceived and detailed planning in order to meet
future demand. It is equally important to examine
and develop in the plan all feasible DSM options that
help in meeting customer demands and satisfies
system performance criteria. The plan should optimize
a mix of supply that includes fossil-fuel and nuclear
commercial generating options, commercial and
near-commercial renewable generation options and
“best practice” DSM/EE measures.
• These three elements are integral parts of any
Integrated Resource Plan (IRP). There are a variety of
tools to do this task which include:
1) Comprehensive DSM/EE measure databases
2) Robust analysis tools
3) Technical and achievable potential analytics
4) Life-cycle economic analyses experience and
tools