TanbianyiI suspect that CS Energy made a conservative, short...

Tanbianyi

I suspect that CS Energy made a conservative, short sighted decision not to proceed with a ucg fuelled power station following the successful Chinchilla trial burn. A decision they may now rue imo.

Back then with coal at rock bottom prices, the numbers for the coal fired power station they commissioned instead must have looked compelling. Looks like the risk assessment department was out to lunch though.

How do future economics for their coal fired power station look just a few years on? Coal prices have near doubled and look to be increasing substantially in the years ahead. Carbon taxes or similar will in all probability be introduced within a year or so and could progressively add 10c/kWh to their production in the short to mid term and more in the longer term from what I am hearing.

Ucg syngas generated electricity may only suffer half that carbon tax. Whilst not wishing to limit future Cougar profits lol, I could see that the costs of syngas production (which is in effect virtual coal mining) may not need to rise in proportion to physically mined and transported mined coal.

Doh! Who'd be wanting to own a coal fired power station in these and future times? But hey, for the first few years that coal sure was cheap. Problem is I bet their funding/investment horizon was 20 to 30 yrs .... oh, double doh!

Poyndexter