INTEGRATED RESOURCE PLANNING AND ENVIRONMENTAL PRICING IN A COMPETITIVE AND DEREGULATED ELECTRICITY MARKET

Integrated resource planning (IRP) as practised in the USA has no rati onale in countries with a deregulated and competitive electricity mark et with third party access on the retail level and an unbundled busine ss structure, Incentives for demand-side management (DSM) must come fr om other sources than IRP, and public authorities face a challenge to foster an environment which will encourage DSM, The principles of inco rporating environmental externalities (EE) into decision making is one element from IRP that can be transferred into a competitive environme nt. This article describes a flexible methodology for doing this, A ca se study of England and Wales shows that an incorporation of EE to ach ieve environmental dispatch of power plants will not have any major ef fects on the current merit order or on the market shares of generators . The same study shows however that the approach will enhance the ince ntives for load management and energy efficiency.