Investment requirements in generation capacity and reserve margin

Summary form only given. The need to ensure an adequate reserve margin and the incentives for the market players have been discussed since the beginning of the industry liberalization. This paper presents the investment requirements in generation capacity and reserve margin generation market. After a first "optimistic period" on the ability of the generation market in supplying suitable signals for investments and the increasing difficulties experienced in the various countries, the prevailing trend is to set up suitable mechanisms for the payment of the capacity made available to the system. The mechanism must be product-related, the product being necessarily different from the energy traded on the wholesale market.