This program encourages energy suppliers in different sectors of energy sources to increase their investments in efficiency improvement projects for direct demand-side energy management. This helps them to conserve energy, accelerate technological development and enhance their competitiveness.
The Energy Utility DSM Investment Plan was first established in 1995 through the amendment of the Energy Use Rationalization Act. Target utilities were Korea Electric Power Corporation (KEPCO), Korea Gas Corporation (KOGAS) and Korea District Heating Company (KDHC).
DSM is management activities of energy suppliers for changing energy consumption patterns of their energy consumers, increasing efficiency in production, transformation, transportation, storage and usage of energy and to lower energy demand and GHG emission. DSM includes both the energy efficiency improvement program and the energy load management program.
The energy efficiency improvement program is designed to reduce total energy consumption by encouraging energy consumers to use less energy or delivering the same service while using less energy. Investments are made in energy conservation projects including deploying high efficiency facilities and equipment, retrofitting obsolete facilities, promoting high-efficiency technologies and cash-back schemes and installing smart meters.
The energy load management program is designed to increase energy efficiency by minimizing peak load and generating base load so that the efficiency of the energy supplying facility can be increased. Related projects are load levelling projects such as running electricity bill subsidy programs to level loads, applying load clipping technology and promoting fuel conversion technology to create new demand.