ABSTRACT
This chapter provides both a definition of stranded generation assets and an overview of the various environment-related risk factors which can strand generation assets. It also provides an up-to-date assessment of the stranded asset risk materiality and describes case studies on various regions and gas, coal and nuclear generating technologies. The chapter presents tools and strategies of how to manage the stranded asset risks. Stranded generation assets are one of the major risks faced by merchant power plants. Generation assets become uneconomic to operate when the marginal cost of generation exceeds the price for electricity over an extended period. The primary tools available to electricity utilities are reactive; that is, they can only prepare and respond to the challenge of stranded assets. Power generators may be willing to disclose asset-specific characteristics which would enable investors, researchers and analysts to undertake their own research on the risks, challenges and opportunities facing the company's portfolio of assets.
