the choice of technology, increases in oil, gas and coal prices can drive up the cost of electricity and curb demand. Where nuclear power or renewable energy technologies are used to generate power, higher fossil fuel prices can actually boost electricity demand, as electricity becomes cheaper relative to other end-use fuels and consumers switch to electricity. A host of other factors influence rates of growth in electricity demand and thus the amount and type of investment in infrastructure needed to meet that demand. The most important among these are: Energy and environmental policies. Government policies affect electricity demand and investment in several different ways. Tax and other economic instruments can deliberately or inadvertently curb demand by increasing the real cost of electricity to end users. Energy efficiency and conservation measures, such as standards, labelling and building codes, can also reduce electricity intensity. Environmental policies may favour some fuels and INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 OUTLOOK FOR GLOBAL INVESTMENT IN ELECTRICITY INFRASTRUCTURE technologies in power generation, and may hinder the construction of high-tension transmission lines. Regulations requiring power plants to reduce emissions of pollutants such as sulphur dioxide are becoming tighter in many countries, pushing up investment costs. The impact of a range of new policies and measures that might be introduced in the future on electricity demand and investment are analysed in Section 4. Technology. Advances in power generation, transmission and distribution technology affect both the efficiency and the cost of electricity supply. The deployment of technology that reduces distribution losses, for example, reduces the need for generating and transmission capacity. The choice of generating technology also has a major impact on the amount of capital needed for new capacity: natural gas-fired CCGT plants, for example, often have the lowest inves