The P&S Department is responsible for the long-term capacity planning for power and water, it keeps track of the past, conceives ideas for the future, develops them into realistic and least cost propositions, and passes them on to the procurement and contracts section for implementation.

The scope of System Development Planning Studies encompasses the following major steps:

a long-term demand forecast, usually covering some 10 to 20 years of the future. The economic development in the country, the place at which electrification takes place, and the future prices for electricity which may affect consumption, cannot be accurately predicted over a long period. Therefore, it is common that several forecasts are developed to see at which level the demand would stand under normal conditions and what it could be under pessimistic or optimistic assumptions;

an assessment of demand-side management (DSM) measures, including (i) transfer of power and energy demand to times of lower demand, (ii) reduction of energy demand through improved end-use efficiency of consumers, (iii) increase of energy demand by inter-fuel substitution, and (iv) introduction of tariffs relating supply quality (reliability or interruptibility) to prices which reflect the value perceived by the consumer;

primary energy survey, which includes a quantitative assessment of the country′s indigenous fuel reserves and its alternative energy resources, such as solar radiation;

subsequently, realistic supply options are defined, taking into consideration the results of the primary survey and the expected needs for electricity and water in the future. During this activity concrete project proposals are elaborated: technology options including renewable energy options are explored; all candidate thermal projects are considered; thermoelectric projects of suitable types and sizes; and alternative production schemes which may be or become attractive are evaluated. In all cases proper account must be made of the relevant environmental criteria;

with the future demand and the supply options known, the next step is the integrated techno-economic optimisation of the expansion of the power and water transmission systems. First the present and future operation of the systems are optimized, then expansion plans are developed for the combined generation/transmission systems. The optimisation is carried out for various development policies, which the procurer may wish to pursue;

socio-economic and environmental impact of each of the viable options are then compared to establish the ones having least impact on environment or the society. Assessment of the water quality and aquatic life in and downstream in the cooling water outlet system; preparation of environmental criteria to be followed during implementation of electric/water and irrigation schemes, concentrating on the control of water quality, aquatic life and water-borne diseases.

the optimized production and transmission system expansion plans (for the various policies) are subjected to a rigid financial analysis, to quantify funding requirements, revenue requirements, debt service, and dependency on fuel. Investment plans are developed to illustrate how the expansion could financially be managed;

finally, looking at a selected set of technically viable, economically optimized and financially manageable power and water system development plans, each with their own environmental and socio-economic impacts, the System Development Plan is formulated. A matrix is presented in which all the advantages and disadvantages of particular developments are made transparent. It is then the task of the decision-makers to select the final expansion plan. The System Development Plan defines when which studies, investigations, tender and construction activities should start and be completed in order to implement the plan successfully.

This sequence of activities, variously known in their entirety as least-cost planning (LCP), integrated resource planning (IRP), or integrated value-based planning (IVP), in which not only system investment, operation and maintenance costs but also the costs of demand-side management and environmental measures are explicitly evaluated, leads to the System Development Plan or Master Plan for Electricity and Water Supply.