"Power upgrade delay may cost energy users billions"

13th March 2008

Our Managing Director (Paul McArdle) spoke at the "Queensland Energy" conference in Brisbane on Wednesday 12th March.  Paul talked through some analysis we had performed of price volatility in the Queensland region of the NEM over summer 2007-08.  At the conclusion of the presentation, Paul made some observations about the upgrade of QNI, and also possible buyers for the NSW Generation Assets, which are to be privatised.

Following from this presentation, Duncan Hughes (from The Australian Financial Review) wrote an article ("Power upgrade delay may cost energy users billions") quoting some figures provided in the presentation, and drawing some conclusions about QNI.

Specifically, Duncan was quoting analysis that showed that the volatility in the Queensland spot price added $690M to the total cost of energy paid (collectively) by all Queensland energy users over summer 2007-08.

Hence, the point was made in the presentation that an upgrade of QNI would seem (based on this preliminary analysis) to have the potential to help energy users avoid significant costs (even if it can't be justified, on a "whole of market" basis under the Regulatory Test).

To read the article, please see either:
1)  The news release at the AFR online; or
2)  A PDF copy of the release.

This message was distilled and referenced in this article, which followed in Business Spectator.

Note that the analysis presented during this conference has also been summarised in an article included on our electricity market blog:

WattClarity.com.au