Articles

Buy big when supply is cheap

analysis

wind

This note has been corrected. I confused Vestas new projects with Vestas orders (backlog). I apologise for the error. The revised text shows the new orders corrects some…

Revenue and new supply

analysis

sales

batteries

The following note basically shows that coal has lost some revenue share since 2018 but its still responsible for close to 2/3 of evening peak sales across the NEM. And that…

If the chooks quack

analysis

policy

The current Federal Goverment might run its energy and climate election message as:

ITK demand model

analysis

demand

In summary ITK has adjusted AEMO’s ‘Central’ demand case down to allow for much less hydrogen, a bit less electrification and up to include 1/3 of the data centre…

Demand

demand

analysis

ISP stepchange demand forecasts will not be achieved without more targeted policy, particularly in regard to industry electrification and specifically electrification of…

Global generation fuel trends

analysis

Your analyst has been stuck in the dark ages. In this note I try to take analysis online and let you my dear audience interact. The chosen data set is the IEA electricity…

The NEM in Spring

analysis

prices

“O, wind, if winter comes, can spring be far behind?” – Percy Bysshe Shelley.

Energy only markets may not do the job

analysis

nem

wind

A system with lots of wind and solar will likely have prices that are very low most of the time and very high at other times (binary price structure or fat tails…

Reviewing wind economics

analysis

nem

wind

It’s likely that wind farms need $85/MWh or more to earn cost of capital. At $95/MWh a 10% equity IRR is in sight. Most participants say a higher price is needed but I am…

ERCOT update

analysis

ERCOT

ERCOT is the main grid in Texas with about 90,000 km of Transmission serving 26 million people and businesses. Maximum demand is over 80 GW and total energy delivered in…

Yesterdays note a draft sent in error

apologies

My apologies for sending out a very far from finished note. I run my own publishing system, write the notes, do the modelling and have a tendency to make careless mistakes.…

VRE update

analysis

nem

vre

Renewable generation should be around 50% of NEM supply by 1 July 2026 probably a little less given that Golden Plains stage 2 is very early in the construction cycle. To…

Gencost

analysis

nem

Its great to see that John Kehoe, economics editor at the AFR now wants to write about the CSIRO Gencost report. Kehoe implys or states that the CSIRO report is biased and…

Golidlocks and the three fears

analysis

nem

forcefield

Are you tucked in kids? nice and comfy? You want a story? Which one? Oh you like the ones daddy makes up do you? Well I haven’t got time tonight but here is an old story…

Eraring GEPA

analysis

nem

NSW

Origin

On my estimates Eraring will likely be profitable for ORG until it closes, if the GEPA isn’t exercised likely significantly profitable. The cash flows will depend on the…

Snowy 2.0 - not so terrible business wise

analysis

nem

snowy

Snowy Hydro has its updated (as of August 2023) business case on its website. I am a bit out practice at looking at Net Present Value (NPV) calculations so reviewing this…

Go West, Southwest that is

analysis

Asia

The SW REZ (N5 in AEMO terms) in NSW (Balranald to Wagga region) together with the neigbourhing V2 REZ are emerging as the most economic area to build renewable energy South…

ASEAN and Asia

analysis

Asia

For Australia, Asia, and particularly China is the primary source of our export revenue. The following chart clearly shows how iron ore and mettalurgical coal exports took…

futures up VRE down-nothing to see

analysis

nem

This surprises me given:

Wires and poles

analysis

nem

distribution

This note has been edited to remove a double counting error of all RAB values. I am grateful to Essential Energy for pointing out this inadvertent error. Ratios involving…

Batteries as a spot price driver

analysis

nem

sa

gas

batteries

Utility battery power is going to grow from about 1.3 GW in the NEM to closer to 7 GW over the next 3 years. That is clearly going to have an impact on wholesale prices. 7…

ITK news

analysis

This email is to advise:

David Leitch and Paul Bandarian

Renewable NEM 2 - with transmission

analysis

nem

renewable

As discussed in our Part 1 of our renewable NEM, ITK built a renewable NEM from scratch, aimed at meeting NEM-wide CY2025 demand. We focussed on generating a VRE portfolio…

David Leitch and Paul Bandarian

Cost deflation in China

analysis

China

costs

Recently all the talk in Australia has been about how much costs have increased. Rystad for instance has been talking about developers wanting $100/MWh for new wind PPAs.…

Spot Price drivers

analysis

nem

prices

In my opinion there will not be enough new renewable supply built in NSW to fully replace Eraring by the end of 2025. In fact I don’t think there will be enough by the end…

Above ground transmission

analysis

nem

transmission

About 10,000 km of very largely above ground transmission are to be built in the NEM in the next decade representing at last pubished cost estimates over $40 bn of…

People policy

analysis

nem

social_lic

A wealth of research suggests that the utility scale renewable energy industry would be better served by putting more emphasis on the people side of things rather than the…

Supply and demand forecast

analysis

nem

renewables

cis

After a year where questions of social license were heavily debated, recent events make it seem like the transition is much more of a done deal. Specifically the Capacity…

Gas generation doesnt set prices all that often

analysis

nem

gas

Its a common perception that gas generation tends to be the price setter for electricity. From this it is easy jump to the idea that electricity prices will go up and down…

Coal Gen Sensitivity

analysis

nem

coal

Price matters more than volume, closure announcement is good strategy, govts should disclose

Liberals in thrall to the Nationals

analysis

politics

It is disappointing to have to write about politics, but recent events have signalled that the Federal Opposition is:

Generator Statistical Digest, Global-Roam

analysis

nem

GSD

batteries

Global-Roam and Greenview Strategic Consulting have released the 2023 edition of the Generator Statistical Digest. Each year the digest grows running close to 1200 pages for…

Sharpe Ratio capital cost with firming

analysis

NEM

portfolio

As we were reminded (several times) in AEMO’s 2024 Draft Integrated System Plan (ISP), “Renewable energy connected by transmission, firmed with storage and backed up by gas…

Paul Bandarian, David Leitch

AGL as an investment

analysis

nem

listed

I take a look at AGL’s medium term prospects. In the process I conclude that the CIS will lower electricity prices by shifting risk from the private sector to the Government…

Global renewables by country

analysis

global

Thanks to their hydro and nuclear plants China and the USA are still in the renewable energy lists. India does very poorly.

Looking Forward

analysis

nem

Price signals are unambiguously positive at least in NSW and QLD and even a renewable developer can work out prices in Victoria will rise post the Yallourn closure.

Alumina electrification would be a big win

analysis

QLD

aluminium

Most of the excellent research that has looked at Australia’s alumina sector has focussed on the potential reduction in carbon emissions. However as an electricity analyst…

QLD new renewables

analysis

qld

QLD is where the new renewable action is right now. It is doing far more than the rest of the NEM put together, or so it seems.

Pumped Hydro and batteries

analysis

qld

storage

In this note I purport to show that a 6 GW/8 hour battery is a superior choice to a 2 GW/24 hour pumped hydro station albeit its life is shorter and its cost is a bit…

Sharpe ratio and renewables - part 1

analysis

nem

Despite its pseudo academic nature and many limitations what I personally take from this analysis is

Transmission easements

analysis

nem

transmission

social_lic

This note started out as a narrow piece on landholder access value. However its grown to comment on the value of transmission, the relative value of individual projects and…

Australia Primary Energy

analysis

Australia

energy

Its hard to do justice in a reduced copied image of the work that the Dept Industry, Science, Energy and Resources put into producing a Sankey diagram of Australian energy…