Volatility is not a risk here. It's the asset. Markets know there’s a storm brewing. Cash prices are weak while reserve margins thin beneath the surface.

We are in a reliability problem driven by forces that are already locked in. Load is rising. Variable generation is increasing. Firm capacity is not keeping pace. The window for short-term fixes has closed.

Fixing that gap requires new firm capacity. New firm generation is expensive. A new gas combined-cycle costs more than $2,000 per kW. It also needs firm gas supply. Prices have to rise until fuel shows up and steel gets built.

Reserve margins compress and the grid runs tight in the meantime. Scarcity pricing and curtailments are inevitable. Operator intervention is unavoidable.

The chart in the North American Electric Reliability Corporation (NERC) Long-Term Reliability Assessment 2025 showing negative reserve margins starting in 2028 in MISO and 2029 in PJM Interconnection and ERCOT needs no additional words.

Volatility is not a risk here. It’s the asset.