An optimal based IRP/DSM formulation for electric utilities in transition to a liberalized electricity market

In this paper a combined optimal based Integrated Resource Planning (IRP)/Demand Side Management (DSM) formulation is developed and simulated. The formulation is to be used by electric distribution utilities to achieve its goals for meeting the customers needs while competing within new gradually developing liberalized electricity markets. Special emphasis are given to the Egyptian case as its electricity industry is going through a sensitive gradual transitional process from a strongly regulated captive/subsidized electricity market (exclusively state owned) to a liberalized competitive electricity market where both state owned and private sector service providers compete to provide the electricity under a developing/maturing regulatory system. At the same time the availability of electric energy is a challenge in view of the growing need for it (around 7% annually) and the limited fossil fuel accessibility on both the national and internationally levels as well as the slow limited development of renewable resources for the production of electricity. The IRP/DSM incorporated scheme introduced in this paper will serve as one of the possible ways to effectively cope partially with the aforementioned challenges facing electric utilities.