Seems lower prices are coming to a grid near you soon!
From the AFR:
"Baseload futures fall below $60MWh
Vesna Poljak
Electricity demand from the grid declined 7 per cent in March, according to Morgan Stanley, as NSW experienced the lowest March demand in NEM history down 6.6 per cent, and South Australian demand was down 11.1 per cent, the lowest on record.Electricity demand has been down.
Bloomberg "We anticipate demand reduction will accelerate for remainder of this financial year, in line with COVID-19 policy measures," the broker said.South East Queensland fell 6.3 per cent last month for the lowest March since 2014, and in Victoria it fell 6.8 per cent, the lowest since 1999.
For AGL Energy and Origin Energy, the decline in demand is relevant in the context of lower-margin commercial and industrial customers."While we anticipate higher consumer demand during this period, on increased working from home, these margin gains could be offset by higher bad debt provisions," Morgan Stanley warned.
What investors should really be watching are 2020-21 base load futures, which have fallen below $60MWh in NSW and Victoria, it said."
Given how undervalued and geo/source-diversified IFN is this will help even the playing field IMO. The price drop may mean traditional fossil source users bow out faster due to a margin crunch which will mean more FCAS requirements at a minimum. Although the spot margin will drop, IFN's base cost for energy is capital cost, management and maintenance only as the wind is not currently charging anybody for the resource it provides.
That means to me that IFN is a very competitive energy provider. It also means hey will be laser-focused on debt and management costs.
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