Wholesale Electricity Generators Are Fighting an Uphill Battle to Survive
Wholesale power producers in the U.S. are having a hard time figuring out what their best path forward is in today's hypercompetitive environment. NRG Energy (NYSE: NRG) is executing a major strategic change and may sell off some of its most valuable assets in order to reduce debt and, hopefully, generate positive cash flow from older fossil fuel assets. Calpine (NYSE: CPN) saw so few options forward that it decided to sell itself to the highest bidder. Across the energy industry, wholesale power plants are finding it hard to survive and companies that rely on wholesale markets to make money are in dire straits.
The changes in wholesale power have thrown the entire industry for a loop. Coal power plants that once generated consistent returns are now left for dead and there doesn't seem to be an easy way for wholesale power generators to make money going forward without completely changing their business model, something every company may have to do in the future.
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Source: Fool.com
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