They would have been able to withstand 6-9months of bad wholesale market conditions if they:
1) Hedged correctly (i think they did)
2) Maintained a strong balance sheet so they can wait for the hedge to pay out
Unfortunately they failed miserably on the second. As nobody will lend to them, they're forced to lose a whole bunch of customers to have money returned to them.
Don't get me wrong, QLD energy markets went crazy. Take a look at this graph, which shows the number of 30 minute intervals where electricity cost $5,000 per MWh ($5/kWh):
In each of those cases, a retailer had to buy energy at stupidly inflated prices because of a failure by one of the energy producing sources. So they were buying at $5/kWh and selling at 60c/kWh (rough guess).
The hedge would cover this - if they followed the two steps above.
Happy to be shown where I'm wrong on any of this...
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