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> generators artificially "shut down" to drive up prices Isn’t that an argument for having a proper market with multiple suppliers? Competitors would normally
by frutiger 3y ago
> generators artificially "shut down" to drive up prices
Isn’t that an argument for having a proper market with multiple suppliers? Competitors would normally step in to provide supply at non inflated prices to generate greater revenue.
- mrtksn 3y agoI wonder how realistic is this? It probably takes multiple years to build anything that generates electricity at scale so competition must be very predictable. Then you can probably calculate your optimal profit strategy very easily and when you sell something that people have to buy, in some cases, probably just inflating the prices by reducing production is the most profitable strategy. There’s no risk of someone stepping in if it’s most profitable for everyone to just produce enough to inflate prices(if you produce one percent more you earn one percent more but if you produce one percent less and if the price go 10% up, you end up making much more money). Aren’t the oil producers doing the same?
- tails4e 3y agoThe price for all units sold is set by the highest producer at a any one moment. This led to windfall profits for generators with fixed costs like wind. It's not a functioning market. Imagine if the price of a beer everywhere in the US was set by the highest seller. Every beer sold would be immediately dearer, not cheaper, as it just takes one seller to push the price up.