"Spark spread" sets value, but as prices diverge from system
lambda, merchant plant buyers will be flying blind.
Many power plants will be bought and sold in the next decade....
perspective requires estimating the proposed plant's contribution to the risk-and-return characteristic of the total portfolio, including scale, diversification and flexibility of commitment. Portfolio management techniques could be borrowed from other commodity industries (such as gas), but they must account for unique aspects of the electric power industry, including lack of storage and the need for spread management.
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