electricity price rage

If you have a spare few moments, this is a good video from the folks at Business Spectator - KGB TV.

They interview Brad Page, Chief Executive from the Electricty Supply Association of Australia (ESSA).

So in summary the three main drivers for electricity price rises over the next 10 years are:

1. addition of more costly renewables
2. upgrading of network
3. addition of a carbon tax

I think the second video brad does a good job of explaining how the price on carbon works - I think I attempted to do this the other day on here. Certainly however, I would recommend that ESG investors become carbon conscious and start to understand what impacts things like carbon taxes, ETSs etc could have on ESG as these are the potential for some significant sources of value for us - something not wasted on those lurking in the shadows.

Anyway, what this means for US at ESG is - as a future supplier of gas - we will probably be preferred because of our low cost - low carbon asset.

Also, interestingly, a potential side benefit is that a rising market in electricity will also impact the other major domestic energy supplies, gas. So we can also expect to see a minor increase in the size of that market as people 'shy' away from electricity.

Cheers,

SF