Integrated resource planning: the role of competitive forces
Charles A. Goldman and Edward P. Kahn, Lawrence Berkeley Laboratory, USAAbstract
Competitive bidding has emerged as the dominant method for procuring new generation resources in the U.S. Recently, many U.S. utilities have extended bidding to include acquisition of demand-side resources.
We discuss several key issues pertaining to the design of competitive bidding programs. We examine efficiency gains from competition in the U.S. private power market and ask whether similar forces could be successful on the demand-side. This study also illustrates some fundamental differences between supply-side and DSM resources. In acquiring supply and DSM resources, we conclude that 'all-source' bidding is not a particularly desirable strategy and that separate, more targeted bidding request for proposals (RFPs) are more appropriate. Finally, in acquiring DSM resources, we favor complementary roles and a partnership between utilities and energy service companies.
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