Ok... With another 2 days of close observations of NEM spot prices in the high $200s during both night time and daytime over a low load period (i.e. the weekend), I can confirm its due to Liddell being shut down. Whilst i did not have doubts (ever) about this i prefer to use data to support my conclusions.
A quick look at the ASX Futures Market I can see prices for NSW are up $5-7/MWH in the short term for CAL 23 base load prices.
Don't get me wrong, I fully support the woke crew in turning off Liddell and i firmly believe in the transition, but at the same time as most of you all i know quite a bit about supply and demand... You turn supply off whilst demand is flat or increasing you get a squeeze (and some profits!).
The next 6-9 months will be a tricky period for ALL energy retailers given the ensuing market volatility. I hope (not a strategy!) AGL will be more prudent with their "N-1" risk exposures modelling and hedging. They need to maintain the significant length they had in their energy positions to counter unexpected outages.
They also need to be careful and avoid the QLD government owned generator's coveted playbook of "cornering" the market with their sheer overall supply and hedge position. To avoid further government intervention AGL needs to balance returns between shareholders, customer and communities.
and for those who don't want to use AGL - they are free to switched to ORG... who i hear have managed to squeeze some more profits out of their electricity customers in the last few months of the year....
[P.S. N-1 risk analysis modelling assumes in each state 1 or 2 units of a power station has tripped under extreme price and weather volatility - which I am pretty sure most retailers, especially the small ones, have forgotten about...]
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