Tech
To fix broken electricity markets, stop promoting the wrong kind of competition
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 profit margin to their generation cost when setting retail prices; 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 contract long-term with standalone retailers. Result: lack of viable investment 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 retailers face hit-and-run competition. If we want more competitive electricity markets, we need to encourage the right type of competition—by discouraging the wrong type.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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Tech
DHS Wants a Fleet of AI-Powered Surveillance Trucks
The US Department of Homeland Security is seeking to develop a new mobile surveillance platform that fuses artificial intelligence, radar, high-powered cameras, and wireless networking into a single system, according to federal contracting records reviewed by WIRED. The technology would mount on 4×4 vehicles capable of reaching remote areas and transforming into rolling, autonomous observation towers, extending the reach of border surveillance far beyond its current fixed sites.
The proposed system surfaced Friday after US Customs and Border Protection quietly published a pre-solicitation notice for what it’s calling a Modular Mobile Surveillance System, or M2S2. The listing includes draft technical documents, data requirements, and design objectives.
DHS did not respond to a request for comment.
If M2S2 performs as described, border patrol agents could park their vehicles, raise a telescoping mast, and within minutes start detecting motion several miles away. The system would rely heavily on so-called computer vision, a kind of “artificial intelligence” that allows machines to interpret visual data frame by frame and detect shapes, heat signatures, and movement patterns. Such algorithms—previously developed for use in war drones—are trained on thousands if not millions of images to distinguish between people, animals, and vehicles.
The development of M2S2 comes amid the Trump administration’s sweeping crackdown on undocumented immigrants across the US. As part of this push, which has sparked widespread protests and condemnation for the brutal tactics used by immigration authorities, Congress boosted DHS’s discretionary budget authority to roughly $65 billion. The GOP’s “One Big Beautiful Bill” allocates over $160 billion for immigration enforcement and border measures—most of it directed to DHS—with the funds scheduled to be distributed over multiple years. The administration has sought to increase DHS funding by roughly 65 percent, proposing the largest expansion in the agency’s history to fund new border enforcement, detention capacity, and immigration surveillance initiatives.
According to documents reviewed by WIRED, locations of objects targeted by the system would be pinpointed on digital maps within 250 feet of their true location (with a stretch goal of around 50 feet) and transmit that data across an app called TAK—a government-built tactical mapping platform developed by the US Defense Department to help troops coordinate movements and avoid friendly fire.
DHS envisions two modes of operation: one with an agent on site and another where the trucks sit mostly unattended. In the latter case, the vehicle’s onboard AI would conduct the surveillance and send remote operators alerts when it detects activity. Missions are to be logged start to finish, with video, maps, and sensor data retained for a minimum of 15 days, locked against deletion “under any circumstances.”
Tech
Sora Has Lost Its App Store Crown to … Dave’s Hot Chicken
Since its launch on September 30, OpenAI’s Sora app has dominated the iOS App Store charts, thanks to its easy breezy AI video generation and an initially loose interpretation of copyright laws. On Friday, its reign came to an end. Your new champion is … Dave’s Hot Chicken.
Yes! Not ChatGPT or Gemini or Threads or any of the other usual suspects. Dave’s Hot Chicken now rules over the App Store, where its slack-beaked, bug-eyed mascot icon expresses appropriate surprise at its ascent. How did it do it? How did it break the grasp of OpenAI’s golem TikTok? With something people love even more than large language models: free food.
“They’re running a promotion for free sliders in celebration of Drake’s birthday,” says Adam Blacker, PR director of the app analytics firm Apptopia. “Free food always gets the downloads flowing.”
If you’re wondering what Drake has to do with any of this, he invested in the fast casual restaurant chain in 2021, and presumably made a mint when the company sold a majority stake to private equity firm Roark Capital for a reported $1 billion. For the third consecutive year, the company gave away one (1) free slider to anyone who has downloaded the app in honor of Drake’s birthday. (The rapper and Raptors fan turns 39 today; the giveaway was Thursday.)
“We’re celebrating a celebrity that’s popular and that’s currently relevant, and also getting food in people’s mouths,” says Dave’s Hot Chicken chief technology officer Leon Davoyan.
And it truly is a lot of people. On a typical week, Davoyan says, Dave’s sees between 20,000 and 25,000 new sign-ups to its loyalty database. On Thursday alone the promotion drove 343,531 new accounts—a more than 10 percent bump to the brand’s overall membership in a single day, according to the CTO.
It was enough to knock Sora out of the top slot for the first time since October 3, an impressive stretch for an app that’s still invite-only. In the first 23 days since it launched, Sora racked up 3.2 million iOS downloads in the US, according to app analytics company Sensor Tower. That’s a much faster pace than even ChatGPT, which while similarly viral notched 2.3 million US downloads in the same time. (Sora is not yet available in the Google Play Store, but it’s incoming.) OpenAI declined to comment.
While Sora is likely to reclaim the top spot after the Drake promotion dies down, Dave’s Hot Chicken should continue reaping the benefits of its giveaway. Last year, according to Sensor Tower, downloads of the app in the four weeks following the same marketing push were more than 50 percent higher than the month leading up to it. All those free sandwiches are worth the long-term gains.
Tech
This Upgraded SteelSeries Gaming Headset Is $80 Off
In the world of high-end gaming headsets, the SteelSeries Arctis Nova Pro Wireless (8/10, WIRED Recommends) stands out with an impressive feature set and excellent audio. Right now, you can pick up the wireless model for just $300 from Amazon, an $80 discount off the usual price. That might sound like a lot for gaming headphones, but these offer quite a lot for the price.
This luxurious gaming headset is a great pick for daily gamers who want excellent sound quality and high-end comfort. They have big drivers that make sounds in-game pop, and an excellent mic with noise-canceling so good your friends won’t even know you have a dog. They’re super comfortable, with the SteelSeries signature ski-goggle strap to take the pressure off your head.
While they’re built for gaming, they also sound great listening to music or watching movies. They have a nice, punchy sound profile and spatial audio support for a more immersive experience. If you’re on a PC, the SteelSeries GG software gives you a ton of options for balancing your audio across multiple sources, and you can even set individual EQ profiles for different applications.
By including a USB DAC for wireless connectivity, the Arctis Nova Pro can achieve some unique and compelling features not found on other headsets. The range is impressive, thanks to more room for the antenna and power than you’d find in a smaller USB dongle. You can adjust the volume and audio mix from a generous knob on the front, and it has multiple audio inputs for switching between consoles.
Best of all, the hub can charge a spare battery for the headset, giving you essentially infinite run time as long as you’re seated at the computer. When you run down the 25 or so hours on one charge, just swap out the battery and the headset will reconnect and pick up where you left off. It’s the perfect feature for anyone with battery concerns, but don’t worry, you can also charge the headset via USB-C directly.
At $300, these aren’t cheap, and there are better gaming headsets for single-console or casual gamers, as well as an even more expensive model, but I think these are a great middle ground for anyone with a budget and a Steam backlog.
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