Question
Question 1A [4 mark] For a generator in a spot market, the upsides from scarcity pricing are revenue sufficiency and adequate incentive for new investment.
Question 1A [4 mark] For a generator in a spot market, the upsides from scarcity pricing are revenue sufficiency and adequate incentive for new investment. What can be a downside of scarcity pricing for a generator?
Question 1B [4 marks] Financial contracts enable retailers to hedge the spot price risk. A retailer often has a portfolio of various financial contracts based on the demand profile of its customer base. Discuss which financial contracts would a typicalretailer opt for, and why? Illustrate your answer with a diagram depicting coverage of load profile through these contracts.
THE QUESTION IS COMPLETE!!!
PLEASE ANSWER DESCRIPTIVELY
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Venture capital and the finance of innovation
Authors: Andrew Metrick
2nd Edition
9781118137888, 470454709, 1118137884, 978-0470454701
