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It doesn’t matter if the state bails out this kind of risky behaviour, if they didn’t then the downside would still be largely socialised through increased elec
by ubercow13 6y ago
It doesn’t matter if the state bails out this kind of risky behaviour, if they didn’t then the downside would still be largely socialised through increased electricity prices for everyone else as sellers start to price in the risk of default on their trades.
Electricity market is regulated partly because providing a reliable electricity supply is seen as important for society, maybe more so than the importance of giving consumers the freedom to gamble on the electricity markets.
- gizmo686 6y agoMost consumers already pay the increased electricity prices. The issue under discussion is the wholesale consumer, who had (up until now) been saving a bit of money by buying electricity directly at wholesale spot prices. Consumers who had payed a premium for a middle man company to take this risk in exchange for a fixed electricity price are not facing exorbitant bills.
- ubercow13 6y agoI think that’s beside the point. If risky consumers are going to participate in the wholesale market, that risk will be priced in at the wholesale level instead of being separately hedged. The idea that consumers can have the freedom to participate in the wholesale market and get cheaper energy out of it seems unsustainable. They are inherently risky and have to pay for that risk at some level, in the long run (unless the state always bails them out)