Since the liberalization of the European electricity markets, the topic of price formation has gained increasing importance. Different theories explain why expected marginal costs of electricity generation may deviate from long-term forward prices. In this context, Florian Frank develops an approach that focuses on the significance of supply-side risk, i.e., the fluctuation in power plant availability, in the formation of electricity prices. The author analyzes the issue both in a theoretical model and empirically based on German forward market prices.