By ronnie lim
Singapore
SINGAPORE generation companies (gencos) are concerned that wholesale electricity prices here have fallen for the first time below the cost of their natural gas feedstock this year.
An industry official has warned that this is an unsustainable situation, as it poses financial risks for market players.
The situation has arisen largely from intense market competition fanned by oversupply from recent new genco plants, but another factor is the rigidity of current gas supply contracts with their "take-or-pay" clauses.
SINGAPORE generation companies (gencos) are concerned that wholesale electricity prices here have fallen for the first time below the cost of their natural gas feedstock this year.
An industry official has warned that this is an unsustainable situation, as it poses financial risks for market players.
The situation has arisen largely from intense market competition fanned by oversupply from recent new genco plants, but another factor is the rigidity of current gas supply contracts with their "take-or-pay" clauses.
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