Hi Yaq,I dont usually post on weekends but I think for your...

Hi Yaq,

I dont usually post on weekends but I think for your peace of mind and fitful sleep on the last night before the Red tells us what to do, I have to draw your attention to the ORG Presentation at the APPEA conference 18/5/11 Slide 8. If you cant find your Conference handouts the Presentation is on the ASX Announcements.

Slide 8 shows the Impact of carbon price on the LRMC of electricity generation

Some CCGT powergen could substitute for some Coal in the $20-$40/t range. Above $40/t CCGT becomes the lowest cost new build source i.e Economic

So if the $23/t is true then we will have some substitution of Gas for Coal but not much unless it ratchets up severely over the next few years.

You would think that the ERM MOU would have already been drafted into a GSA and ready to go . What did ERM assume in their prospectus(17/11/10) ? I recall they showed for median priced plants that $25/t as being a point where brown coal, black coal , CCGT had the same SRMC. That document speaks long and hard about Carbon but in the context of the CPRS

Quote
At the time of writing, the likely timing and form of any carbon pricing policy in Australia is very uncertain and represents a key risk in relation to the future generation mix
Unquote

Quote (P220)
Explicit carbon pricing is introduced
Either through emissions trading scheme or carbon tax.
- Gas is well placed to increase market share as a generation technology.
- ERM Power has a number of planned projects across all regions able to respond to changing market conditions in any region.
- Proposals are mostly OCGT projects, but could be changed/converted to CCGT plants if market justification emerges under carbon pricing.
- Increase in gas requirements for higher capacity factor operational mode.
- Enhances vertical integration opportunities as ERM's generation gradually moves
closer to off-take profile of retail customer base.
- Potential for significant increase in revenues from more MWh generated
Unquote

I am getting excited reading that Prospectus again. And I note that the EPW sp has had a bit of a kick upwards but short of $1.75 still. Our ESG prce also got a little boot to 65.5cps, bit short of 85.

It could be on - the long awaited ERM GSA may be just about to be launched upon our necks

As well as the other MOUs - their proponents must be itching to get a guaranteed source of gas for their Gas power stations.

They better be quick off the mark on Monday.

As for ORG and STO --- I know you love these two but history tells us that they are ORGANICALLY bred and takeover stuff is no longer their bag. They have tried and failed and at least have the decency to have quit trying.

Having just written all the above I feel Exuberated and cant wait for the Red to speak. I never listen or look at the Red , as I cant stand the nasal droning, nagging, vision from .... I will pick it up in the papers.



Cheers