Diversified portfolio management strategy for the energy buyer

摘要

The concept of portfolio management is nothing new to the energy industry. One only has to look at the dramatic rise of gas-fired generation over the last five years in response to stricter environmental regulations (i.e. more costly electricity) to see why a cheaper, cleaner-burning fuel like natural gas would become so popular. The electricity provider sought out ways to diversify its exposure to various fuel cost increases by not relying too heavily on one fuel source. As was seen in the case of gas-fired generation, the rush to build these units was partly responsible for the unprecedented run-up in gas prices the last few years.