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close this bookThe Global Greenhouse Regime. Who Pays? (UNU, 1993, 382 p.)
close this folderPart III National greenhouse gas reduction cost curves
close this folder11 Thailand's demand side management initiative: a practical response to global warming
View the document(introduction...)
View the documentIntroduction
View the documentEnd-use energy efficiency policies
View the documentCosts and benefits of the DSM master plan
View the documentCO2 reductions from the DSM Plan
View the documentWhy should other developing countries adopt DSM?
View the documentThe role of the multilateral development banks
View the documentConclusions
View the documentReferences

Why should other developing countries adopt DSM?

The benefits of DSM programmes and integrated resource planning (IRP) are substantial, especially given the rapidly growing demand for electricity by all sectors of the economy in many developing countries and the rising capital and environmental costs of meeting the demand. The search for mechanisms to reduce global CO2 emissions makes DSM an even more attractive policy for governments and utilities in developing countries. Briefly, the benefits of DSM are:

• It enables utilities to operate at the lowest possible cost of production. This cost minimization keeps tariffs stable and under control. Net system benefits will increase because investments in needed new power plants are avoided for as long as possible or avoided completely. Also deferred or avoided are transmission system expansion, operation, maintenance and fuel costs.

• End-use efficiency reduces customers' bills. This leaves everyone with more money which can be spent in other parts of the economy. Foreign debt obligations for power plant construction can be reduced also leaving additional funds for other infrastructure development priorities.

• Demand side management reduces the uncertainty in projecting future electricity demand because a portion of the expected load growth is managed through efficiency programmes.

• Investments in efficiency can be made in smaller amounts and adjusted more quickly to meet changes in demand. Therefore, the risk of underbuilding or overbuilding new power plants is reduced. The use of expensive capital is optimized.

• Integrated resource planning reduces social conflict over natural resource utilization because fewer power plants of any type have to be sited.

Other Asian developing countries are also exploring the feasibility of implementing DSM programmes on a large scale. Tenaga Nasional Berhad (TNB), the private power utility that serves Malaysia, has about 3,650 MW peak demand which is expected to grow to around 5,500 MW in 1995. The DSM project proposed by TNB, which began in 1992, is to conduct a smallscale test of commercial building retrofits. Several buildings will undergo 'super retrofits.' after the retrofits, the project team will monitor the end uses of electricity in these buildings and compare these results to monitored use in a group of control buildings.

The purpose of the test will be to document the capacity and energy savings acquired by replacing standard ventilation and air conditioning equipment, inefficient lighting systems, and other end uses with more efficient technology. A second objective is to expose the TNB staff to the analysis, development, and monitoring of DSM projects. The TNB staff will be trained in the fundamentals of DSM project development and operation.