They are spot prices which average out.
the spot prices are used as price signals to entice generators into the market.
high spot price to encourage generators to enter.
Negative price to entice generators to turn off.
It's the electricity retailers that take on the risk and set their contract prices accordingly.
As you probably know up until 2007 electricity use was increasing and it was forecast to continue doing so hence investment in transmission and distribution.
In fact electricity use has flattened but peak use has increased.
If you have a breakdown during peak times prices skyrocket.
A generator like Hazelwood and the Snowy hydro are the ones that large energy users would use to hedge against high peak prices.
SA no longer has a source for hedging.
Could they build a coal fired station and bring the coal in by train or ship?
Would it be economical?
Would it be more economical to ship in gas and build gas generators?
i don't have the detailed info required to do the sums but the existing gentailers do.
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