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1. Introduction The Integrated Resource Planning (IRP) model is formulated as a Mixed Integer Linear Programming problem and has been developed by Professor Ram M. Shrestha since 1998 from Energy Program under School of Environment and Resources Development of Asian Institute of Technology. The flowchart of the model is presented as figure 1.1 below. In this model, the number of power generation units to be installed in each year of the planning horizon is addressed as integer decision variables. The other decision variables of the model express the power generation of each power plant at each block of a season in a year, number of DSM appliances to be incorporated into the power system in each year and expected power supply from foreign importation in each block of a season in a year. Existing & Candidate Plants Data System Load Shape and Load Forecast yearly Environmental Costs DSM data TRP Model Optimal expansion plan Capacity mix Generation mix/Fuel mix Cost implications Emission factors CO2, SO2 and NOx emission implications Figure 1.1The framework of the Integrated Resources Planning (IRP) model The IRP model is then developed not only to decide the size and types of power plant capacities corresponding generation and determine the optimal schedule for new capacity addition and the size, type, timing of various efficient demand side technologies but it also incorporates distributed power generation sources (DPG) as decentralized power generation to primarily meet the separate local energy demand of customers served from remote areas (without T&D losses) and contribute surplus power generation (if it is connected to grid) to the electricity network (with T&D losses) in meeting the network system demand that excluding the above local demand. Additionally, the different system and local load sharp curves in each year are also presented in the model. 2