diff --git a/doc/api/tools.rst b/doc/api/tools.rst
index 7ddbda28ec..edb5b8be87 100644
--- a/doc/api/tools.rst
+++ b/doc/api/tools.rst
@@ -6,21 +6,25 @@ General purpose modeling tools (:mod:`.tools`)
 - Codes for retrieving data from specific data sources and adapting it for use with :mod:`message_ix_models`.
 - Codes for modifying scenarios; although tools for building models should go in :mod:`message_ix_models.model`.
 
+.. currentmodule:: message_ix_models.tools
+
 On other pages:
 
 - :doc:`tools-costs`
 
+.. autosummary::
+   :toctree: _autosummary
+   :template: autosummary-module.rst
+   :recursive:
+
+   res_marg
+
 On this page:
 
 .. contents::
    :local:
    :backlinks: none
 
-.. currentmodule:: message_ix_models.tools
-
-.. automodule:: message_ix_models.tools
-   :members:
-
 .. currentmodule:: message_ix_models.tools.exo_data
 
 Exogenous data (:mod:`.tools.exo_data`)
diff --git a/message_ix_models/cli.py b/message_ix_models/cli.py
index 46db15a455..2b898992e1 100644
--- a/message_ix_models/cli.py
+++ b/message_ix_models/cli.py
@@ -168,6 +168,7 @@ def _log_threads(k: int, n: int):
     "message_ix_models.report.cli",
     "message_ix_models.model.material.cli",
     "message_ix_models.testing.cli",
+    "message_ix_models.tools.res_marg",
     "message_ix_models.util.pooch",
     "message_ix_models.util.slurm",
 ]
diff --git a/message_ix_models/tests/tools/test_res_marg.py b/message_ix_models/tests/tools/test_res_marg.py
new file mode 100644
index 0000000000..b04dc81c41
--- /dev/null
+++ b/message_ix_models/tests/tools/test_res_marg.py
@@ -0,0 +1,26 @@
+import pytest
+
+from message_ix_models.tools.res_marg import main
+
+
+def test_cli(mix_models_cli) -> None:
+    """Run :func:`.res_marg.main` via its command-line interface."""
+    command = [
+        "--model=model_name",
+        "--scenario=scenario_name",
+        "--version=123",
+        "res-marg",
+    ]
+
+    # Fails: the model name, scenario name, and version do not exist
+    with pytest.raises(RuntimeError):
+        mix_models_cli.assert_exit_0(command)
+
+
+@pytest.mark.xfail(reason="Function does not run on the snapshot")
+def test_main(loaded_snapshot) -> None:
+    """Run :func:`.res_marg.main` on the snapshot scenarios."""
+    scen = loaded_snapshot
+
+    # Function runs
+    main(scen, None)
diff --git a/message_ix_models/tools/res_marg.py b/message_ix_models/tools/res_marg.py
new file mode 100644
index 0000000000..085740de7a
--- /dev/null
+++ b/message_ix_models/tools/res_marg.py
@@ -0,0 +1,114 @@
+"""Update the reserve margin.
+
+:func:`main` can also be invoked using the CLI command
+:program:`mix-models --url=… res-marg`.
+"""
+
+from typing import TYPE_CHECKING
+
+import click
+
+if TYPE_CHECKING:
+    from message_ix import Scenario
+
+    from message_ix_models import Context
+
+
+def main(scen: "Scenario", contin: float = 0.2) -> None:
+    """Update the reserve margin.
+
+    For a given scenario, regional reserve margin (=peak load factor) values are updated
+    based on the electricity demand in the industry and res/comm sector.
+
+    This is based on the approach described in Johnsonn et al. (2017):
+    DOI: https://doi.org/10.1016/j.eneco.2016.07.010 (see section 2.2.1. Firm capacity
+    requirement)
+
+    Parameters
+    ----------
+    scen :
+        Scenario to which changes should be applied.
+    contin :
+        Backup capacity for contingency reasons as percentage of peak capacity (default
+        20%).
+    """
+    demands = scen.par("demand")
+    demands = (
+        demands[demands.commodity.isin(["i_spec", "rc_spec"])]
+        .set_index(["node", "commodity", "year", "level", "time", "unit"])
+        .sort_index()
+    )
+    input_eff = (
+        scen.par("input", {"technology": ["elec_t_d"]})
+        .set_index(
+            [
+                "node_loc",
+                "year_act",
+                "year_vtg",
+                "commodity",
+                "level",
+                "mode",
+                "node_origin",
+                "technology",
+                "time",
+                "time_origin",
+                "unit",
+            ]
+        )
+        .sort_index()
+    )
+
+    with scen.transact("Update reserve-margin constraint"):
+        for reg in demands.index.get_level_values("node").unique():
+            if "_GLB" in reg:
+                continue
+            for year in demands.index.get_level_values("year").unique():
+                rc_spec = float(
+                    demands.loc[reg, "rc_spec", year, "useful", "year"].iloc[0].value
+                )
+                i_spec = float(
+                    demands.loc[reg, "i_spec", year, "useful", "year"].iloc[0].value
+                )
+                inp = float(
+                    input_eff.loc[
+                        reg,
+                        year,
+                        year,
+                        "electr",
+                        "secondary",
+                        "M1",
+                        reg,
+                        "elec_t_d",
+                        "year",
+                        "year",
+                    ]
+                    .iloc[0]
+                    .value
+                )
+                val = (
+                    ((i_spec * 1.0 + rc_spec * 2.0) / (i_spec + rc_spec))
+                    * (1.0 + contin)
+                    * inp
+                    * -1.0
+                )
+                scen.add_par(
+                    "relation_activity",
+                    {
+                        "relation": ["res_marg"],
+                        "node_rel": [reg],
+                        "year_rel": [year],
+                        "node_loc": [reg],
+                        "technology": ["elec_t_d"],
+                        "year_act": [year],
+                        "mode": ["M1"],
+                        "value": [val],
+                        "unit": ["GWa"],
+                    },
+                )
+
+
+@click.command("res-marg")
+@click.pass_obj
+def cli(ctx: "Context"):
+    """Reserve margin calculation."""
+    main(ctx.get_scenario())