Analyzing Merchant Power Companies’ Revenue Growth
The top lines of independent power producers (CPN) (NRG) have been under severe pressure due to weak wholesale prices and flattish electricity consumption growth. Increasing renewables generation at competitive prices has added to the woes of these merchant peer companies. The chart below shows the revenue growth of merchant power companies.
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2017 may bring cheer for merchant companies. The weather this year is expected to be favorable, which may induce electricity demand. Higher natural gas prices could also uplift wholesale power prices, ultimately boosting utilities’ (NRG) (DYN) revenues.