Energy planning has a number of different meanings. However, one common meaning of the term is the process of developing long-range policies to help guide the future of a local, national, regional or even the global energy system. Energy planning is often conducted within Governmental organizations but may also be carried out by large energy companies such as electric utilities or oil and gas producers. Energy planning may be carried out with input from different stakeholders drawn from government agencies, local utilities, academia and other interest groups.
Energy planning is often conducted using integrated approaches that consider both the provision of energy supplies and the role of energy efficiency in reducing demands (Integrated Resource Planning). Energy planning should always reflect the outcomes of population growth and economic development.
Planning and market concepts
Energy planning has traditionally played a strong role in setting the framework for regulations in the energy sector (for example, influencing what type of power plants might be built or what prices were charged for fuels). But in the past two decades many countries have deregulated their energy systems so that the role of energy planning has been reduced, and decisions have increasingly been left to the market. This has arguably led to increased competition in the energy sector, although there is little evidence that this has translated into lower energy prices for consumers. Indeed in some cases, deregulation has led to significant concentrations of "market power" with large very profitable companies having a large influence as price setters.
Integrated Resource Planning
Approaches to energy planning depends on the planning agent and the scope of the exercise. Several catch-phrases are associated with energy planning. Basic to all is resource planning, i.e. a view of the possible sources of energy in the future. A forking in methods is whether the planner considers the possibility of influencing the consumption (demand) for energy. The 1970s energy crisis ended a period of relatively stable energy prices and stable supply-demand relation. Concepts of Demand Side Management, Least Cost Planning and Integrated Resource Planning (IRP) emerged with new emphasis on the need to reduce energy demand by new technologies or simple energy saving.
In the USA the Public Utility Regulatory Policies Act of 1978 PURPA and more comprehensively the Energy Policy Act of 1992 introduced these concepts into the legal system, to be further detailed by individual states.
Sustainable Energy Planning
Further global integration of energy supply systems and local and global environmental limits amplifies the scope of planning both in subject and time perspective. Sustainable Energy Planning should consider environmental impacts of energy consumption and production, particularly in light of the threat of global climate change, which is caused largely by emissions of greenhouse gases from the world's energy systems, which is a long-term process.
Many OECD countries and some U.S. states are now moving to more closely regulate their energy systems. For example, many countries and states have been adopting targets for emissions of CO2 and other greenhouse gases. In light of these developments, it seems likely[according to whom?] that broad scope integrated energy planning will become increasingly important.
Sustainable Energy Planning takes a more holistic approach to the problem of planning for future energy needs. It is based on a structured decision making process based on six key steps, namely:
1. Exploration of the context of the current and future situation
2. Formulation of particular problems and opportunities which need to be addressed as part of the Sustainable Energy Planning process. This could include such issues as "Peak Oil" or "Economic Recession/Depression", as well as the development of energy demand technologies.
3. Create a range of models to predict the likely impact of different scenarios. This traditionally would consist of mathematical modelling but is evolving to include "Soft System Methodologies" such as focus groups, peer ethnographic research, "what if" logical scenarios etc.
4. Based on the output from a wide range of modelling exercises and literature reviews, open forum discussion etc., the results are analysed and structured in an easily interpreted format.
5. The results are then interpreted in order to determine the scope, scale and likely implementation methodologies which would be required to ensure successful implementation.
6. This stage is a quality assurance process which actively interrogates each stage of the Sustainable Energy Planning process and checks if it has been carried out rigorously, without any bias and that it furthers the aims of sustainable development and does not act against them.
7. The last stage of the process is to take action. This may consist of the development, publication and implementation of a range of policies, regulations, procedures or tasks which together will help to achieve the goals of the Sustainable Energy Plan.
Designing for implementation is often carried out using "Logical Framework Analysis" which interrogates a proposed project and checks that it is completely logical, that it has no fatal errors and that appropriate contingency arrangements have been put in place to ensure that the complete project will not fail if a particular strand of the project fails.
Sustainable energy planning is particularly appropriate for communities who want to develop their own energy security, while employing best available practice in their planning processes.
- Best Practices in Electric Utility Integrated Resource Planning, Synapse Energy Economics, June 2013, retrieved 2015-01-09
- Bill Prindle: Integrated Resource Planning: Delivering Energy Services at the Lowest Total Cost, ICF International, December 12, 2011, retrieved 2015-01-09
- History of Integrated Resource Planning and EPAMP, Western Area Power Administration, retrieved 2015-01-09