This paper presents the results of a study done at SQU that assessed and evaluated the suitable, feasible and effective Demand Side Management (DSM) measures that can achieve substantial reduction in peak demand and electricity consumption in the residential villas/houses. The study, which is based on a survey of typical design of villas/houses and their energy consumption pattern, developed a simulation model using Design Builder, Energy Plus and MATLAB software. The simulation model is then used to investigate the energy saving potential in the residential sector by generating different scenarios of energy conservation measure. The results have shown a good energy saving which reaches up to 21.5% by using energy efficient designs for the houses and critical appliances such as air conditioning and lighting. The study then investigates the impact of energy conservation measures on generation capacity and energy savings using generation expansion planning software called WASP. The study also estimates environmental, transmission and distribution costs saving. The study estimates around 3.26 billion US dollars benefit for the coming 25 years.