plants and transmission and distribution networks. Modern economies are becoming increasingly dependent on grid-based electricity services. The adequacy, quality and reliability of electricity supply are, therefore, of crucial importance to economic development and growth. Up to now, the bulk of electricity sector investment has taken place in OECD countries, which continue to dominate the global electricity supply industry. But the picture is changing rapidly, as demand in developing countries surges in response to strong rates of economic and population growth, especially in Asia. Most of the electricity investment over the coming decades is expected to take place in developing countries. But there are indications that financing problems are holding back investment in some countries, undermining prospects for economic development and poverty alleviation. Financing is unlikely to be an issue in OECD countries, but there are concerns about whether utilities are investing enough in capacity, in improving the quality of service to meet increasingly onerous customer needs, and in ensuring the reliability and security of supply. INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 - © OECD 2006 3. OUTLOOK FOR GLOBAL INVESTMENT IN ELECTRICITY INFRASTRUCTURE This chapter first considers past trends in demand for electricity services and in investment in electricity supply infrastructure. It then goes on to review the main drivers of electricity demand and investment needs. This is followed by a summary of the International Energy Agency's latest electricity market Reference Scenario projections, broken down by major world region, and their implications for the amount of investment needed in power generation, transmission and distribution. Results are then presented of an Alternative Policy Scenario, which analyses the impact of a set of new government policies to curb demand growth and reduce energy-related airborne emissions. The following section describes the main uncertainties