Power shares

[Snoopy]

Any retailer without at least some of their own generation will get a hiding in the electricity market. If they under hedge then they will get hit heavily everytime the wholesale price spikes, and if they over hedge they will be paying too much for their energy and have to cut their margins.

Does a similar argument not apply to the generators without any retail customers? Sole generators have to:

A/ sell their power at rock bottom price on the futures market, because, if they don't, they have no control over their wholesale power margin and can't guarantee to the banks that they will be able to pay their interest bill, and no control over dividend levels to shareholders either. OR

B/ The alternative: sell power at spot prices. But that relinquishes all control on the wholesale price received. In a worst case you would have to shut down your power station or risk overloading the grid as power supply exceeded demand (I imagine Transpower would take a dim view of that).

Life is not easy being a 'sole generator'?

SNOOPY