In this paper, an energy planning optimisation procedure of a selected territory is illustrated and applied using an energy flow optimisation model. The developed approach takes into account various electricity generating options to meet the energy needs of various demand sectors. Energy saving techniques and hybrid technologies are considered and various scenarios are developed by assessing the contribution of renewable energy technologies over the planning period. The procedure aims to reduce the total actualised cost of energy generation over selected time horizon and predicts the additional installations required along with the existing facilities to meet the energy demand. At the same time the role of renewable energy technologies and of energy saving measures is evaluated by imposing suitable constraints on CO2 emissions and primary energy sources exploitation. The procedure is applied to the territory of Tamil Nadu state (India) by considering different energy planning scenarios. (C) 2008 Elsevier Ltd. All rights reserved.