World Energy Outlook 2006

Increasing interconnection capacity between European countries is one of the
objectives of European market integration. But building new interconnections
is a major challenge in some areas because of local opposition or, sometimes,
because no clear arrangements yet exist to share costs between the different
system operators. The uneven increase in wind power generation tends to
reduce the availability of cross-border transmission capacity (European
Commission, 2005).
30%
25%
20%
15%
10%
5%
Figure 6.13: US Capacity Reserve Margins
projections based
on committed projects
0%
1990 1994 1998 2002 2006 2010
Source: North American Electric Reliability Council (2005).
2014
In the United States, system capacity reserve margins increased substantially
after 1999 (Figure 6.13). Between 2000 and 2004, new capacity of nearly
200 GW was built, mainly CCGT plants, which increased margins across the
country from 7.6% in 1999 to 24.8% in 2004. Yet, strong demand growth is
now reducing these margins, even though a total of 82 GW of additional
capacity is expected to come on line in the United States by 2009. Over 60%
of this capacity will be gas-fired (DOE/EIA, 2005). Up to 13 GW of coal-fired
capacity could be built in this period. Some of these new projects are facing
environmental opposition; if their construction is delayed, electricity supply
could become tight over the next five years. Many states have introduced
renewable portfolio standards to encourage the contribution of renewables, but
new construction is likely to depend on the extension of the production tax
credit, which expires at the end of 2007. This could have a negative impact on
electricity supply.
152 World Energy Outlook 2006 - THE REFERENCE SCENARIO
© OECD/IEA, 2007