The report considers the potential development of electricity demand and installed capacity to determine if supply can meet demand in the short and long term.

The analysis considers two scenarios: conservative in which only new generation projects known as firm are integrated; and best estimate which takes into account future power plants whose commissioning can be considered as reasonably probable. Under a conservative approach, ETSO concludes that a reasonable level of generation will be developed through to 2012 but thereafter, the reliability of the whole system cannot be considered as achieved without additional investment.

The more optimistic scenario would fulfil the Adequacy Reference Margin (ARM) criteria and keep a reasonable level of risk for the whole ETSO system until 2015.

Across the ETSO region, the period 2008-2010 shows a decrease of margins as load growth is only partly compensated by generation development. Nevertheless, new capacity commissioning covers a sufficient part of the load increase to ensure a reasonable security margin to 2010. ETSO also notes that between 2008 and 2010, renewables increase from 8% to 10% of capacity.

For 2010 – 2015, the situation is more tightened with most increases coming from renewables, mainly wind power, the study says. However, as the availability of this type of generation is only partly guaranteed, it is not sufficient to prevent overall capacity from continuing to decrease and after 2012, the security of the whole ETSO grid would no longer be secured. An additional 20 GW of capacity would be required by 2015 or some 3% of total installed.

In addition to uncertainties on future developments, ETSO also highlights uncertainties over plant retirements, particularly as a result of CO2 trading and the European Large Combustion Plants Directive.