Futures trading generally interests me...<p>Specifically, both electricity and gas have robust futures trading markets. And gas can be converted to electricity.<p>So... In the ideal world, whenever the price of gas is higher than the price of electricity, gas generators should shut down - since there isn't money to be made.<p>However, looking at market data for the UK, <i>that only happens sometimes</i>. There are plenty of generators who, according to spot market prices, shouldn't be operating, yet are.<p>Obviously some gas generators might have purchased low priced gas futures, or have sold high priced electricity futures - making it profitable to operate. However, even gas generators in that position stand to profit <i>more</i> by shutting down and reselling the futures they have bought on the open market.<p>It appears that even big companies make suboptimal market decisions on quite a frequent basis.<p>I suspect the cause is general lack of business flexibility. If such inflexibility is widespread, it would be a good reason to disallow futures trading entirely - by forcing people to buy things as they use them, they are <i>forced</i> to notice that what they are about to do isn't profitable - and the futures market hides that from them.
Interesting read, I was wondering what happened that day. As an operator of a small network of fastchargers, we were delighted to have a purchase price of negative 20cent per kw. Which is huge.