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How smart / green are we all 5-Dec-2008 At 3:16:33 PM Dom

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On 5/12/2008 lacto wrote:
>Sorry just from memory quoting blowering . Today spot price was $10 at
>2 am 4600 Mw demand and $60+ around 2 pm with 7000 Mw demand so they margins
>are there but probably not the willingness of the generators to let snowy make a quid >on the differentials.

How are the other generators prohibiting the snowy region from making a quid? I would have thought that the increase in the price during peak demand periods simply reflected the marginal cost of dispatching additional generation capacity which is more expensive than coal fire gen's. Southern hydro and hydro tas have both stopped selling electricity below $340 - $350 per MWh because their dam levels (and expected rain fall) are historically very low. In the past both generators were bidding around high $200's per MWh. That higher price just reflects the opportunity, which is foregone, to run their generators in the future. The margins, after adjusting for risk, are actually razor thin (it's a volume game).

> After all the generators rely on very high spot prices up to $20,000 a Mwh to >generate thir profits .
The spot price in the NEM is currently capped at $10,000 per MWh (see http://nemmco.com.au/powersystemops/150-0014.html).

>Also of interest is the two humps in demand each night when night rate hot water
>/heating cuts in solar should replace a large portion of this or aleast
>the cheaper rate only available to supplement solar
Supplementing solar is a poor proxy for increasing electricity prices which would artificially reduce the demand for alternatives which may be cost competitive.

I guess the whole situation hinges on the government successfully implementing a national wide carbon tax and not bowing to special interest groups formed by heavy emitters. God help us…