'Boom cycle' for US power prices

With input costs surging and demand growth currently outpacing supply additions in the US power market, analysts are expecting the space to tighten further. David Watkins reports

A recent report by investment bank Barclays Capital said the US power market is now "on the cusp of its next boom cycle" and that tight conditions are set to trigger "sky-rocketing" prices across the seven most actively traded North American power markets. Despite the lack of any weather event in 2007, prices during the peak demand period of the day grew 13% year on year, according to the bank.

"This scenario is a result of recent demand growth," said Michael Zenker, Barclays Capital's North