The Booms and Busts of the Electric Power Industry
The
electric power industry is driven by boom and bust cycles as market
fundamentals and volatility sends signals to market participants to
speed up or slow down their efforts. One of the lessons of that boom and
bust experience is that seeds of the next boom are sown in the bust of
the last business cycle. By that I mean the enthusiasm of the boom stage
of the market always attracts new entrants and leads to excess which
increases volatility before the fundamentals of supply and demand swing
back toward equilibrium. This phenomenon is shown clearly…Read more...
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