Say it again... but electricity retailers need to ensure they have generation to meet the demands of their customer book... AGL is far and away in the best position in Australian market (now). Next generation fleet needs to start getting built now to avoid problems such as these that EA have just suffered... and expiring contracts for coal supply probably need to be negotiated out to the EOL of Bayswater / Liddell... obviously that should have been done before coal prices soared, but hopefully the opportunity will present itself in the next two years to do this.
"EnergyAustralia, one of Australia’s major coal generators, has warned of a significant loss of $1.3 billion resulting from the combined impact of outages at its coal plants, and the soaring price of electricity caused by the rising cost of fossil fuels.
EnergyAustralia would normally be expected to make a big profit from the soaring wholesale prices, particularly as its Yallourn brown coal generator in Victoria can source its fuel from neighbouring mining pit. But multiple and repeated outages at Yallourn, along with problems at its Mt Piper plant in NSW which could not source enough coal due to lower deliveries from its supplier, meant it had to buy high priced power from the wholesale market to meet the contracts it has written to customers.
The revelation from EnergyAustralia’s parent company CLP, which is listed in Hong Kong, confirms the fact that the price cap and market suspension that was introduced last week probably protected coal companies even more than it protected consumers from higher prices."
AGL Price at posting:
$8.32 Sentiment: Hold Disclosure: Held
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