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To fix broken electricity markets, stop promoting the wrong kind of competition

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To fix broken electricity markets, stop promoting the wrong kind of competition


Credit: Unsplash/CC0 Public Domain

Competition is seen as a panacea in electricity markets: if only we had more, prices would be lower, and investment and supply security would be higher.

Politicians love this story because it offers respite when electricity prices rise. Just unleash regulators and competition authorities to “fix” competition barriers—problem solved (for now).

Encouraging retail competition becomes a priority. Consumers are slow to change retailers, even if they could save hundreds of dollars a year, which is seen as a brake on competition.

Regulators and policymakers therefore champion price comparison services and other measures to encourage electricity customers to shop around.

Also, standalone retailers often protest that they can’t access generation from their rival “gentailers”—firms that combine electricity generation and retailing—on fair terms.

If only they could—and customers more keenly switched providers—retail-only companies could provide stiffer competition. Their solutions include lobbying for gentailers to be broken up, or be forced to supply retailers on the same terms as the gentailers’ own retail arms.

The trouble is, if we misidentify the causes of lackluster electricity market competition, our solutions may only make things worse.

Rather than the lack of competition being about too little customer switching and barriers to retailers entering the market, the more likely cause is too much of both.

Hit-and-run retailers

For the big gentailers (such as New Zealand’s Mercury, Meridian, Contact and Genesis) to face more competition, we need either more gentailers or other ways to achieve the benefits of gentailing. Those benefits are twofold:

  • combining generation with retailing effectively manages the huge risks standalone generators or retailers face when they buy and sell on wholesale markets, where prices are highly volatile and can rise to levels that kill businesses; in turn, this helps gentailers finance investment in generation
  • and gentailers only need to add one to their generation cost when setting ; separated generators and retailers add separate margins, which can accumulate to more than what gentailers alone charge.

Separating generation from retailing is therefore a bad idea—if you want lower prices and better investment, you probably want more gentailing.

But why can’t separated generators and retailers replicate these gentailing advantages through long-term contracts? Because generators incur large investment costs to be recovered over many years, so to finance their investments they need long-term revenue security.

Standalone retailers can’t credibly sign contracts offering that security. If they do, new retailers (which can be set up relatively cheaply) can steal their customers when wholesale prices fall below the level of those long-term contracts.

If retailers do sign long-term contracts with generators, they risk failing when exposed to such “hit-and-run” competition by rival retailers—or they renege on those contracts to survive.

Generation investors see this coming, so don’t long-term with standalone retailers. Result: lack of viable and competition by separated generators and retailers.

The right kind of competition

To resolve this, we would need to eliminate hit-and-run retail entry—first, by making it harder for customers to change retailers if wholesale prices fall below long-term contracted prices.

This could be achieved by requiring retail customers to sign up to long-term retail contracts themselves, rather than being able to flexibly change retailers. Ironically, price comparison websites take us in the wrong direction.

Second, new retailers could be required to have either their own generation—be gentailers, in other words—or have long-term supply contracts in place with generators.

Counterintuitively, this actually makes it easier—or at least more sustainable—for retailers to enter the market, because they know they won’t face hit-and-run competition if they do.

This also means generators can more confidently sign long-term contracts with retailers. Retailers wouldn’t then need to convince regulators to force gentailers to supply them, as they can secure their own supply through contracting.

Standalone retailers might object that they would do this now if they could. But generators can’t supply standalone retailers given the current long-term contracting uncertainty.

Fix that uncertainty—by increasing the ability of retailers to commit to long-term contracts—and both generators and retailers win. Ultimately, this means gentailers face more credible competition, which also means consumers win.

By discouraging the wrong kind of competition (rather than promoting it), genuine competition can be made more durable and effective. That would support long-term investments by generators, and also investments by retailers in innovative services that benefit consumers.

Neither is possible when customers can change retailers with ease, and face hit-and-run competition. If we want more competitive electricity markets, we need to encourage the right type of —by discouraging the wrong type.

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The Conversation


This article is republished from The Conversation under a Creative Commons license. Read the original article.The Conversation

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To fix broken electricity markets, stop promoting the wrong kind of competition (2025, September 6)
retrieved 6 September 2025
from https://techxplore.com/news/2025-09-broken-electricity-wrong-kind-competition.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.





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Undersea cables cut in the Red Sea, disrupting internet access in Asia and the Mideast

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Undersea cables cut in the Red Sea, disrupting internet access in Asia and the Mideast


This is a locator map for Yemen with its capital, Sanaa. Credit: AP Photo

Undersea cable cuts in the Red Sea disrupted internet access in parts of Asia and the Middle East, experts said Sunday, though it wasn’t immediately clear what caused the incident.

There has been concern about the cables being targeted in a Red Sea campaign by Yemen’s Houthi rebels, which the rebels describe as an effort to pressure Israel to end its war on Hamas in the Gaza Strip. But the Houthis have denied attacking the lines in the past.

Undersea cables are one of the backbones of the internet, along with satellite connections and land-based cables. Typically, internet service providers have multiple access points and reroute traffic if one fails, though it can slow down access for users.

Multiple cables cut off Saudi Arabia

Microsoft announced via a status website that the Mideast “may experience increased latency due to undersea fiber cuts in the Red Sea.” The Redmond, Washington-based firm did not immediately elaborate, though it said that not moving through the Middle East “is not impacted.”

NetBlocks, which monitors internet access, said “a series of subsea cable outages in the Red Sea has degraded in multiple countries,” which it said included India and Pakistan. It blamed “failures affecting the SMW4 and IMEWE cable systems near Jeddah, Saudi Arabia.”

The South East Asia–Middle East–Western Europe 4 cable is run by Tata Communications, part of the Indian conglomerate. The India-Middle East-Western Europe cable is run by another consortium overseen by Alcatel Submarine Networks. Neither firm responded to requests for comment.

Pakistan Telecommunications Co. Ltd., a telecommunication giant in that country, noted that the cuts had taken place in a statement on Saturday.

Saudi Arabia did not acknowledge the disruption and authorities there did not respond to a request for comment.

In Kuwait, authorities also said the FALCON GCX cable running through the Red Sea had been cut, causing disruptions in the small, oil-rich nation. GCX did not respond to a request for comment.

In the United Arab Emirates, home to Dubai and Abu Dhabi, internet users on the country’s state-owned Du and Etisalat networks complained of slower internet speeds. The government did not acknowledge the disruption.

Undersea lines can be cut in accidents and attacks

Subsea cables can be cut by anchors dropped from ships, but can also be targeted in attacks. It can take weeks for repairs to be made as a ship and crew must locate themselves over the damaged cable.

The cuts to the lines come as Yemen’s Houthi rebels remain locked in a series of attacks targeting Israel over the Israel-Hamas war in the Gaza Strip. Israel has responded with airstrikes, including one that killed top leaders within the rebel movement.

In early 2024, Yemen’s internationally recognized government in exile alleged that the Houthis planned to attack in the Red Sea. Several were cut, but the Houthis denied being responsible. On Sunday morning, the Houthis’ al-Masirah satellite news channel acknowledged that the cuts had taken place, citing NetBlocks.

From November 2023 to December 2024, the Houthis targeted more than 100 ships with missiles and drones over the Israel-Hamas war in the Gaza Strip. In their campaign so far, the Houthis have sunk four vessels and killed at least eight mariners.

The Iranian-backed Houthis stopped their attacks during a brief ceasefire in the war. They later became the target of an intense weekslong campaign of airstrikes ordered by U.S. President Donald Trump before he declared a ceasefire had been reached with the rebels. The Houthis sank two vessels in July, killing at least four on board, with others believed to be held by the rebels.

The Houthis’ new attacks come as a new possible ceasefire in the Israel-Hamas war remains in the balance. Meanwhile, the future of talks between the U.S. and Iran over Tehran’s battered nuclear program is in question after Israel launched a 12-day war against the Islamic Republic in which the Americans bombed three Iranian atomic sites.

© 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Citation:
Undersea cables cut in the Red Sea, disrupting internet access in Asia and the Mideast (2025, September 7)
retrieved 7 September 2025
from https://techxplore.com/news/2025-09-undersea-cables-red-sea-disrupting.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.





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How to See WIRED in Your Google Searches

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How to See WIRED in Your Google Searches


As you’ve probably noticed, Google has gotten … weird lately. Weirder? It can be hard to find the search results you’re looking for. Between AI summaries and algorithm changes resulting in unexpected sources, it can be tricky to navigate the most popular search engine in the world. (And publishers are feeling the strain, too.)

Earlier this year, Google updated its algorithm. This is nothing new—Google updates its algorithms hundreds of times per year, with anywhere from two to four major “core updates” that result in significant changes. And while it’s tricky to determine exactly what changed, publishers and websites large and small noticed significant traffic drops and lower search rankings—even for content that had previously been doing well. “Google Zero” (as Nilay Patel of The Verge first called it) is thought to be caused, at least in part, by AI overviews.

Google Search has shown a slow crawl toward this for a couple of years, but the most recent blow was delivered over the summer. When you search for something and you get a neat little summary of various reporting completed by journalists, you’re less likely to visit the websites that actually did the work. And, in some instances, that summary contains incorrect AI hallucinations or reporting from websites you might not trust as much. It’s hard to say whether the next core update will make your search results show what you expect, but in the meantime, there’s a tweak that can help it feel more tailored to your preferences.

Take back control of your Google search results with the new Google “Preferred Sources” tool. This can help you see more of WIRED, from our rigorous and obsessive Reviews coverage to the important breaking stories on our Politics desk to our Culture team’s “What to Watch” roundups. (And, yes, this works for other publishers you know and trust, too.)

Preferred Sources are prioritized in Top Stories search results, and you’ll also get a dedicated From Your Sources section on some search results pages.

To set WIRED as a Preferred Source, you can click this link and check the box to the right. You can also search for additional sources you prefer on this page and check the respective boxes to make sure they’re prioritized in your Google searches.

Google via Louryn Strampe



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The New Math of Quantum Cryptography

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The New Math of Quantum Cryptography


The original version of this story appeared in Quanta Magazine.

Hard problems are usually not a welcome sight. But cryptographers love them. That’s because certain hard math problems underpin the security of modern encryption. Any clever trick for solving them will doom most forms of cryptography.

Several years ago, researchers found a radically new approach to encryption that lacks this potential weak spot. The approach exploits the peculiar features of quantum physics. But unlike earlier quantum encryption schemes, which only work for a few special tasks, the new approach can accomplish a much wider range of tasks. And it could work even if all the problems at the heart of ordinary “classical” cryptography turn out to be easily solvable.

But this striking discovery relied on unrealistic assumptions. The result was “more of a proof of concept,” said Fermi Ma, a cryptography researcher at the Simons Institute for the Theory of Computing in Berkeley, California. “It is not a statement about the real world.”

Now, a new paper by two cryptographers has laid out a path to quantum cryptography without those outlandish assumptions. “This paper is saying that if certain other conjectures are true, then quantum cryptography must exist,” Ma said.

Castle in the Sky

You can think of modern cryptography as a tower with three essential parts. The first part is the bedrock deep beneath the tower, which is made of hard mathematical problems. The tower itself is the second part—there you can find specific cryptographic protocols that let you send private messages, sign digital documents, cast secret ballots, and more.

In between, securing those day-to-day applications to mathematical bedrock, is a foundation made of building blocks called one-way functions. They’re responsible for the asymmetry inherent in any encryption scheme. “It’s one-way because you can encrypt messages, but you can’t decrypt them,” said Mark Zhandry, a cryptographer at NTT Research.

In the 1980s, researchers proved that cryptography built atop one-way functions would ensure security for many different tasks. But decades later, they still aren’t certain that the bedrock is strong enough to support it. The trouble is that the bedrock is made of special hard problems—technically known as NP problems—whose defining feature is that it’s easy to check whether any candidate solution is correct. (For example, breaking a number into its prime factors is an NP problem: hard to do for large numbers, but easy to check.)

Many of these problems seem intrinsically difficult, but computer scientists haven’t been able to prove it. If someone discovers an ingenious algorithm for rapidly solving the hardest NP problems, the bedrock will crumble, and the whole tower will collapse.

Unfortunately, you can’t simply move your tower elsewhere. The tower’s foundation—one-way functions—can only sit on a bedrock of NP problems.

To build a tower on harder problems, cryptographers would need a new foundation that isn’t made of one-way functions. That seemed impossible until just a few years ago, when researchers realized that quantum physics could help.



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