World Energy Outlook 2006

illion dollars (2005)
5 000
4 000
3 000
2 000
1 000
0
Figure 6.11: Cumulative Power-Sector Investment by Type
in the Reference Scenario, 2005-2030
OECD European United
Union States
Transition
economies
Capacity replacement
China India Latin Rest of
America developing
countries
Demand increase
Power Generation Investment Trends in the OECD
Electricity capacity reserve margins are declining in most OECD countries
signalling the need for new investment. 7 The supply disruptions in parts of
North America and Europe in summer 2006 have raised again questions about
the adequacy of generation margins and investment in network infrastructure.
Reserve margins are expected to fall in most European countries. They are
expected to remain adequate in at least France, Germany, Italy, Spain, Portugal
and Central Europe over the period 2006-2010 (Figure 6.12). Spare capacity
will be insufficient in Ireland, Belgium and the Netherlands, although existing
interconnections can help improve security of supply. For the period 2010-
2015, additional capacity must come on line everywhere to meet demand. Up
to 2010, almost all new power plants are expected to be CCGTs or wind farms,
but recent increases in gas prices have led a number of power companies to
indicate that they plan to build coal-fired power stations, despite the existence
of the European Union’s Emissions Trading Scheme (ETS). Licensing
procedures are becoming increasingly complicated and their outcomes
unpredictable.
7. The reserve margin is the percentage of installed capacity in excess of peak demand. Differences
in plant margin requirements reflect the nature of the different systems considered - factors such as
interconnection capacity with neighbouring systems, transmission constraints, the frequency of
peak loads, and the generation mix affect the required plant margin.
150 World Energy Outlook 2006 - THE REFERENCE SCENARIO
© OECD/IEA, 2007