Has anybody seen this? Bit of a bombshell to drop just as NZ Inc goes on holiday. Looks like the Cap has been put on Cap-in-Trade:
https://www.stuff.co.nz/national/pol...to-ets-pricing
"This means businesses will be paying at least $20 for every tonne of emissions and possibly up to $50. The fixed price at which the Government sell the credits would move from $35, up from $25 now.
Climate Change Minister James Shaw said research showed that a $40 price was around the point where businesses started seriously investing in cleaner technology.
The aim is to see net emissions peak at around 2020 levels and then begin falling from 2022, according to a draft "emissions budget" for the years 2021-2025. This budget would be superseded by the first emissions budget from the Climate Change Commission in 2022."
Seems to me this will gradually kill coal use on the Rankines, but also act to put a cap on Gas use emissions also, mostly affecting Contact and Genesis plant?
Contact is mostly Gas generation but Genesis is duel fuel with the Rankines is that correct?
Obviously favours Electric boilers eg in the Dairy industry, affecting their S. Island plants and strongly incentivising Renewables at long last.
Here's hoping Contact and particularly Genesis don't take a hit with loss of fuel flexibility eg with Coal, and Gas doesn't become too expensive and push power pricing up for the baseload generation plants and consumers long term too much.
On the flip side perhaps the economics for Genesis running their 3rd Rankine unit now stack up for baseload Gas generation, particularly if Tiwai decides to quit and we have more dry years with Climate change...
Disclosure: Own Genesis and Trustpower shares.