3 ms·
> Market dynamics dictate that when people/businesses are no longer willing to buy a MW for €150, the demand drops, the most expensive generators are not needed
by implements 4y ago
> Market dynamics dictate that when people/businesses are no longer willing to buy a MW for €150, the demand drops, the most expensive generators are not needed anymore and the overall price drops to the new equilibrium price.
Not an economist, but “inelastic market / supply” answers that, I think.
- ragebol 4y agoIt might drop, but a little only. Apparently, paying €150 for a MW is acceptable for companies. But the alternative is shutting down, so the cost gets forwarded to consumers of their products eventually. This is of course dampened by middlemen who sell for a fixed price and take the risk of having buy for a high price. And a few small NL energy companies (or rather middlemen) have gone bankrupt when they didn't have the reserves.