Your Geo insights/posts have helped me out no end and I think I can return the favor here by providing some background re electricity markets and how they function.
It doesnt quite work the way that you have suggested regarding Kogan Creek providing enough power to supply the local region and a large part of Northern NSW, thus making the LNC station obsolete. Once Kogan electricity enters the grid it isnt earmarked or owned by any particular party. Thus Kogan may have bilateral/over the counter contracts to supply a customer in Townsville. Kogan power is not transported to Townsville to meet the contractual obligation. Its just taken out of the grid. Who generated/supplied it doesnt matter. Kogan will have volume contracts with electricity retailers (supplying SE Qld and central/northern Qld), but these are not earmarked to individual customers. If Kogan feeds into the spot market, they have no interest or knowledge of where there electricity is going. In effect, the supply demand balance will determine how electricity flows thru the Qld grid and whether Qld is a net importer or a net exporter of electricity. Thus Victoria can be an indirect supplier into the Qld grid, if it pushes enough electricity into NSW which in turn pushes it into Qld.
Only if there is a transmission constraint (peak periods whereby transmission capacity is insufficient) will there be restrictions on the flows. Thus, I think it highly unlikely that competition from Kogan was an impediment to the development of LNCs power station. LNC could have secured retail contracts at market prices and the new Kogan supply did not sustainably depress market prices such that it affected the proposed Walker/LNC plant economics.
I suspect you are closer to the mark when you mentioned technology risk as an impediment to the development of the LNC plant (security of supply is really important given price exposures).
Cheers Bleasby
CXY Price at posting:
11.5¢ Sentiment: None Disclosure: Not Held
