Original article by Robert Gottliebsen
The Australian – Page: 20 : 6-Oct-21

Electricity retailing has traditionally been a stable business, with good long-term returns. However, it is rapidly becoming a low-margin and high-risk industry in Australia and abroad. The recent collapse of nine smaller power distribution companies in the UK has implications for Australia. A sharp rise in the price of gas triggered the collapse of these companies, but the underlying problem of electricity retailers in both the UK and Australia is the use of forward hedge contracts with major power generators, which can leave smaller retailers extremely vulnerable in the event of a price shock.

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