Imagine you are Gordon Horsfield, the architect of the financial restructuring behind Drax. You are responsible for investing your own money in reviving the largest power station in the Europe. Valued at the time of purchase around £800m now worth in excess of £3bn. Your shareholding has increased as the remunerations committee gives you more and more share options, at the first opportunity you sell £12m worth of shares and make sure that you have something to show for your remarkable risk.

Looking back at when the Power station was worth 800m you realise that coal prices were high (you were locked in to a long term deal with RJ Budge which was costing money) and that power prices were at an all time due to the gas for cash. You knew that the station had a limited lifespan and it would die early if these prices remained.

Wary of the old days you look at prices now and see that the forward price for power (although it has been higher) is far healthier than 2002 and you also note that coal prices have hardly moved if anything in real terms they have fallen. You realise that this cannot last forever and so you start hedging the dark spread. Locking in guaranteed returns of £20-£30 a MWh. As more gas flows into the country you know that this will effect gas prices, but if you can sell forward power you know that you will not be pushed out of the merit order.

Banks seeing that Drax and others are deciding to lock in prices on a forward basis realise that the gas plant will struggle to come onto the bars because there will be no demand, and so they also start selling power prices and to a lesser extent buying some of the coal. Needless to say the bear run contnues, unabated. What is left is that the everyone is left guessing when the gas plant will join the party.

Langeled will official open today with the potential to supply 20% of the UKs gas demand. It will not be a full capacity but expect some gas to flow into the UK today as the prime minister looks at the dials.