Why electricity retailers are more like financial institutions such as banks and less like utilities or energy producers
Today, companies that sell electricity (not talking about companies that are vertically integrated into production) operate more like financial intermediaries and less like traditional energy companies. But why is that you might ask? Well in theory they buy something (preferably at a lower price) and then sell it to the end customer (preferably at a higher price). Unfortunately in contrast to selling bananas when it comes to electricity in the process of retail or intermediary there are far more risks involved than in the classical retail business.
What about their business model? Is it really more similar to banks than to other companies from the energy sector e.g. hydro power plants?