For all scenarios the capital requirements of the energy sector are large, but not infeasible. Although investment requirements expand more slowly than overall economic growth, the energy sector will have to raise an increasing fraction of its capital from the private sector. It will face stiffer competition and return-on-investment criteria than it has in the past. Moreover, the greatest investment needs are in the now developing world, where current trends in the availability of both international development capital and private investment capital are not auspicious.
Of all the conclusions from the global analysis, the importance of capital requirements was among the most widely endorsed in the regional reviews. In the OECD regions (NAM, WEU, and PAO) regional reviewers were most concerned that energy sector deregulation might erode incentives for long-term RD&D and might discourage needed energy infrastructure investments that are big, ``lumpy,'' and risky. In developing regions, regional reviewers emphasized institutional reforms to attract the investments needed for expansion. There must be a shift from subsidies and flat rates to segmented market pricing. Losses and leakage must be reduced, and efficiencies improved. Such shifts must be politically acceptable, and they must not leave the poor behind. Market pricing only makes an investment attractive if there is a market that can pay the price, and the poor in developing countries do not yet constitute such a market. How quickly they become empowered energy consumers will depend more on the success of policies to reduce poverty than on energy policies.