Rising gas prices to force power hedging strategy re-evaluation

Risk managers say gas price rises will force a rethink on current hedging strategies for power generation assets.

Volatility created from impending rises in natural gas prices will make power plant risk managers re-evaluate the current methods they use in order to offset generation asset risk because widely popular forward contracts may not be able to handle large price swings.

"Every time you can see some fundamental change in the market, the hedging strategy should be reassessed, but this process should be consistent and not too frequent," says Martin Kučera, senior risk manager at the largest electricity