Do diminishing marginal returns apply to DSM?

Journal Article · Sun May 01 04:00:00 EDT 1994 · Electricity Journal

DOI:https://doi.org/10.1016/1040-6190(94)90142-2· OSTI ID:28596

Sioshansi, F P

The U.S. electric power industry is currently spending approximately $2 billion annually on demand-side management (DSM) programs, a substantial increase over just a few years ago. The level of DSM spending is expected to continue to grow in the foreseeable future, according to various industry surveys. Environmental benefits are among the chief assumed - and expected - benefits of DSM. In fact, the answer to how much cost-effective and achievable DSM is available depends, to some extent, on whether the value of environmental benefits of DSM is considered explicitly or implicitly. Several states now specifically require the environmental effect of alternative supply or demand options to be considered in utility resource-planning decisions. On the surface, it seems plausible that, assuming the current level of DSM is `good` for the environment, an even more aggressive level of DSM would be even better. Carrying this line of argument a step further would suggest that a highly aggressive DSM strategy, coupled with a heavy dose of nonpolluting renewable energy technologies, would eliminate the need for all new supply-side resources and be the closest thing to achieving nirvana - low-cost, environmentally benign electricity service - in utility resource planning. Those advocating such a strategy argue that is is not only justified from an environmental point of view, but also from an economic perspective, because it is the cheapest course of action to follow.

• OSTI ID: 28596
• Journal Information: Electricity Journal, Journal Name: Electricity Journal Journal Issue: 4 Vol. 7; ISSN ELEJE4; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
COST BENEFIT ANALYSIS
ELECTRIC POWER INDUSTRY
ENERGY EFFICIENCY