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Overcoming power hedging constraints

With inherent hedging issues, gas prices set to rise and increased competition driving volatility, Lianna Brinded takes a look at how existing hedging strategies for power generation assets need to be reassessed

Hedging strategies - generation assets

Gas prices are a main factor for why hedging strategies for power generation assets need to be re-evaluated say risk managers. This is because it has become increasingly difficult to gauge future price movements, which in turn nulifies some of the hedging options.

According to the International Energy Agency's (IEA) market benchmark World Energy Outlook 2010 report, published in November, energy

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