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At any given moment there's a finite amount of power being generated from hydro plants, even if they were to produce energy indefinitely.

Isnt that finite amount usually 125% of what they need?

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There's no such thing as "what they need". At any given price there's a quantity that will be economical to use (demand) and an amount that will be economical to produce (supply).

When prices are artificially suppressed demand > supply, which means there's a shortage.

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