Is There a Capacity Glut, and How Long Will It Last?

Yes, an overbuild of electric generating capacity has emerged in many regions of North America, thanks to an unprecedented bulge of investments in the first merchant energy boom-and-bust cycle. The good news is that competition in wholesale generation is sending exactly the right price signals, suggesting this correction will be much faster than the last one. The bottom line: competition in the wholesale electric generation segment is working.