Integrated resource planning (IRP) seeks to identify themix of resources that can best meet the future electricity-service needs of consumers, the economy and society. It is the preferred planning process for electric utilities. Under IRP different resource options (incorporating investment and operational costs) are compared using a discounting process and electrical power is visualised as a sub-sector of the energy sector. In turn, the energy sector is one among many other sectors (agriculture, health, education, transport, etc.) that make up the national economy. However, energy and electricity permeate the whole economy; electricity linkage with all other
sectors and the national economy at large is stronger than any other sector. Energy is also a capital-intensive activity that claims ?nancial resources and investments more than other sectors, particularly if the country has no suf?cient indigenous energy resources [4].
The electricity sub-sector is usually the largest within the energy sector. It claims more than one half of the total capital investment in the energy sector and, on average, consumes almost one third of the country’s total fuel consumption (ratios vary from one country to another). Capital investments in the electricity sector of developing countries amounted to almost 9 per cent of their gross capital formation (total capital investment) in the past two decades. This ratio is increasing owing to the rapid growth of electricity demand in DCs [5]. Besides its direct linkages to almost all other sectors
of the national economy, the electricity sub-sector also has important environmental impacts of a national, regional and global nature.
Investments in the electricity sub-sector are prompted by the requirements of the economic and social sectors and by demography. However, their extent is restricted by the country’s ?nancial and capital investment capabilities and the availability of other energy sources, as well as the continuous improvement in eficiency of utilisation. The form and location of electricity production facilities and fuels utilised are being increasingly in?uenced by environmental considerations. Within the electricity sub-sector itself, limited financial resources have to be optimally distributed between generation extension and network strengthening, between urban and rural areas and between different geographic locations. Electrical power production also has to utilise different types of fuel and other resources depending on their local availability, cost, and environmental impact. All this calls for integrated electricity planning in a hierarchical manner (see Figure 1.1). Integrated resource planning in electric power utilities also involves links with the labour, capital and energy markets. It aims at ensuring that the policies (pricing and accessibility to supply) and practices (quality and availability of supply) of the power utilities adequately serve the purposes of the national economy. These purposes include the availability of a reliable supply at the least possible cost, while eficiently utilising resources and protecting the environment.
Electricity is a secondary formof energy. It is produced, inmost cases, by converting primary energy into heat that drives turbine-generators, or internal combustion engine-generators. It is also produced directly by hydro-power driving hydro-turbines. Therefore, electricity is an integral part of the energy scene. Fuels for producing electricity are the main part of the primary fuels that constitute the Total Primary Energy Requirements (TPER) in any country. Also, electricity can substitute other fuels within the energy sector. Any study into integrated resources management in the electricity sub-sector must consider this relationship. The aim is to have clean production and ef?cient resources utilisation in the electricity sub-sector. This will not only help to reduce the burden of energy on the national economy, but will also allow eficient and clean replacement of other fuels, thus greatly enhancing integrated resource management within the entire energy sector.
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