Uncertainty in the Electric Power Industry

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The book explores the complexities faced by utilities in the context of global liberalization and privatization in the electricity sector. It highlights the heightened competition and the resulting exposure to risks and uncertainties that utilities cannot transfer to customers. Electricity-generating companies grapple with volatile wholesale prices, unpredictable fuel costs, and significant sunk investments, all while navigating limited options for long-term hedging. The discussion emphasizes the challenges and strategic considerations in this evolving industry landscape.