anyone have a copy of the citi report on wec??, page-10

Welcome back Foz,

A long term domestic outlook.

Assuming Tincom delivers the SPV cash (hence ESI survives...what a sagga)), and given a carbon price is a certainty say end 2011, what is the competition for Vic base load given the incoming EPA 0.8 requirement (which I reckon is set to incorporate Coldry)?

Fact is Vic power generation has to drastically change even medium term.

Natural gas is the touted prospect being 0.4. The EPA regs look like setting the upper limit at 0.8. Coldry with IGCC sits well below the 0.8. Interesting situation!

Fact is brown coal is strategically located and even Grant King from Origin said....utilising brown coal makes sense.

But the green push is 0.45 (CCGT is 0.4) which is the developed world ave.

So what are the drivers for long term Vic power?

Looking at the below links and others, I reckon brown coal is here to stay. Alcoa/LYP agreement says that. Even today...

http://www.abc.net.au/news/stories/2010/10/01/3026977.htm?site=gippsland

Given the present low cost of nat gas.....and the 0.4 emissions - surely nat gas is the logical winner to provide the long term base load solution for Vic?

Vic has plenty of nat gas - logical to go that way? Discard brown coal....embrace CCGT?

Alcoa was built on this cheap brown coal generated power. They are dead without it. Thats Geelong and Portland dead.
The recent Alcoa/LYP agreement locks in brown coals future there....and I suspect elsewhere.

As Garnaut says below - $$$ is king. Vic people like any (eg Alcoa), want/need CHEAPEST possible electricity they are used to.

So HOW does nat gas V lignite stack up?

Gas?

Garnaut says Gas from Vic fields will need to be supplemented by external sources eventually. QLD/NSW gas are the only prospects, and they will soon be tied into the international gas price market. The international gas price market is tied to the POO.

Do Vic public/industry want to be captive to POO long term? Obviously no. This is the bottom line.

Some Gas will be built to pacify certain groups - but for REAL base load - Vic is built on the need for cheap brown coal power....hence the EPA 0.8

Granted - CCGT uses minimal water. But Coldry produces massive Class A water. Big tick for Coldry.

The way I see it all shaping up is this:

To reduce emissions 20% by 2020 is a big call.

Chief executive of Loy Yang Power, Ian Nethercote said yesterday:

"There is no doubt that there is still a need for new technology to come into the fray"

http://www.abc.net.au/news/stories/2010/10/01/3026977.htm?site=gippsland§ion=news

Coldry for PRE combustion. Shandys on tap - burn up to 30% Coldry with ZERO boiler modifications to deliver 15% emissions savings. 2020 targets met presto!

Check out MBD for POST combustion. MBD algae is something Ive posted on before - it is in my view THE CCS alternative. Very convincing tech led by CSI's like Anglo and an ex BHP Chairman. LYP are on the ball....backing both Coldry and MBD algae.

Why is the share price where it is?

Kos has said on BRR and elsewhere that the deal is done. It isnt. The licensing was signed late June which is extremely significant. However $$$ is what seals the deal....hence the share price.

Eg: a new home salesman does not get excited with a written contract. He DOES get excited when the customer delivers the deposit.

We are waiting for the deposit Mr Chairman Thang Van Luong.

http://www.mbdenergy.com/

http://www.garnautreview.org.au/CA25734E0016A131/WebObj/D0841436Responsetoissuepaper6-DomGasAlliance/$File/D08%2041436%20Response%20to%20issue%20paper%206%20-%20DomGas%20Alliance.pdf

http://webcache.googleusercontent.com/search?q=cache:Gmvw6cL_2EEJ:www.abc.net.au/insidebusiness/content/2010/s2858134.htm+Queensland+gas+prices+export+rise+long+term&cd=4&hl=en&ct=clnk&gl=au