The "Iberian Exception" was a redistributive patch, not a structural market reform. It deliberately transferred value between groups to protect the variable resources. Redistribution imo can look a lot like managed corporatism or “crony capitalism” if it persists or is opaque.

Imagine a NZ Thermal Hedge Co that: Buys or guarantees long-term fuel supply contracts, or simply tracks an index. Sells hedge products (caps & swaps) to electricity retailers or generators. Is financially separate from the market operator, Clears through transparent, contracts.

@PoW_Blockspace Where do you think the market failure is to require a (presumably) high risk / loss making thermal co?

@JG_moves_NZ Well, you don't have a choice; If you want: A liberalised energy market that preserves price signals, But also a politically acceptable degree of stability, …then you must have either: A hedge market with a sovereign backstop, or Price interventions, redistributions ex-post.

@JG_moves_NZ The first is disciplined and rule-based (market completion). The second is chaotic and discretionary (cronyism). You could, let a foreign risk-taker (say, Macquarie, Shell) sell the hedge, but then someone will argue its not true competition foreign or scarcity rent extraction.

@PoW_Blockspace So you don’t think that the market will be able to deliver an acceptable (to the populace) level of stability. We know that the market delivers grid stability well. Haven’t even dipped into warning storage levels.

@PoW_Blockspace So I guess the question is do you think that this price instability that results is too much and needs intervention. I think that’s the best pitch but I’m really iffy. There are bound to be cheaper ways to hedge that the government won’t discover but the market will