Power Generation Investment in Electricity Markets (Energy Market Reform)

This Report Looks At How Investors Have Responded To The Need To Internalise Investment Risk In Power Generation And How These Responses Have Affected The Organisation Of The Power Sector And Technology Choices. This Study Looks At Several Cases Of Volatile Prices In Iea Countries’ Electricity Markets, And Finds That While Market Prices Can Be A Sufficient Incentive For New Investment In Peak Capacity, Government Intervention Into The Market To Limit Prices May Undermine Such Investment. Executive Summary -- 1. Introduction -- 2. Risk And Power Generation Investment -- 3. Hedging Risk In Power Generation Investment -- 4. Price Volatility, Investment, And Government Intervention -- 5. Conclusions And Recommendations International Energy Agency. Preliminaries......Page 1 CONTENTS......Page 9 EXECUTIVE SUMMARY......Page 13 INTRODUCTION......Page 23 RISK AND POWER GENERATION INVESTMENT......Page 29 HEDGING RISK IN POWER GENERATION INVESTMENT......Page 45 PRICE VOLATILITY, INVESTMENT AND GOVERNMENT INTERVENTION......Page 57 CONCLUSIONS AND RECOMMENDATIONS......Page 91 BIBLIOGRAPHY......Page 97