However, even if a good idea of broad policy goals has been developed and there is knowledge of the overall energy system and a governance system has been put in place, what becomes immediately apparent when considering even the simplest policy options is the complexity of the energy system and the high degree of inter-linkages with all economic sectors and the natural environment. Because of this, in order to formulate policy options and to evaluate the trade-offs that are involved, a systematic framework for analysing the energy system and policy options is required. In the past energy policy has been formulated for each energy supply subsector separately. The policies have also been dominated by supply-side considerations. A logical result of focusing on individual supply subsectors is that energy users' needs cannot be prioritised.
Users have needs for energy services, rather than for a specific fuel.
To meet users' needs effectively, different fuels or a mix of fuels need to be considered, or possibly alternative investment in conservation or efficiency measures. Also, environmental consequences need to be evaluated and so do choices in terms of the effects on producing sectors of the economy and social development goals. It is impossible for energy systems analysis and subsequent policy formulation that is based on individual supply sectors to effectively deal with the balance required by this complex set of interlinkages. In order to avoid the severe limitation of the supply-side perspective, IEP focuses instead on the energy service needs of energy users. This approach allows users, whose needs are being badly serviced, to be identified.