Environmental considerations will greatly continue to influence the generating system through choice of technology and fuels, particularly if there is future carbon taxation. Electricity generation is highly capital intensive and the inertia of existing generation systems is considerable. Existing systems involved huge amounts of capital investment, which every electricity producer is eager to use to the end of its useful life. Because of the huge stock of current generating systems, technological change will be very gradual. Choice of fuels will also be restricted by: the existing stock of plants, national fuel endowments (particularly in the case of coal), capital and human resources (in case of nuclear), development of natural gas networks and its future price, and availability and cost of alternative resources. Correspondingly, the effect of technological changes in the electricity generation system will be slow and gradual, at least in the short term, since most of the expansion will take place in developing countries. These countries are more concerned about capital expenditure, utillisation of proven technologies and cheaply available local coal fuel, rather than the global environment and eficiency considerations.
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