The risk is this.. is this going to be pounded by the msm and Jacinda for months. I maintain my thinking their goal is to nationalise the power industry and Co share it with iwi. Just like the 3 waters deal.
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Have done...Yes Aust can be a surprisingly fickle market, but at least it has liquidity. And the banks / Telstra are back paying high dividends / buybacks along with the miners.
The lithium and battery metals co run may be still getting under way eg. ACDC ETF but otherwise valuations are looking stretched IMO...
I think you guys are drawing a long bow and reading too much into this. The outage was a transpower ****-up and heads need to roll where the problem lies, at Transpower. https://www.msn.com/en-nz/news/natio...mes/ar-AANbpPA
Huntly will be providing extremely valuable back up support for base load generation demand for many many years to come.
yes it has been blameshifted to Transpower.
I note that MEL storage and inflows have improved esp in the St Is and the average is now 74% over both islands
but some stats are over 100% of the average so I think dry year risk is receding for now.
It says in the announcement they will be including more PPA's... similair to what they are doing with MCY's windfarms or CEN's geothermal. SNOOPY rightly termed these PPA's as "rent-a-green". You only need to look at what happened to AGL to see the value destruction this creates for the purchaser of these "rent-a-green" agreements.
These PPA's will be value destructive for GNE in the race to share their "wonderful ESG credentials" in the next set of slides they present.
MCY and CEN are 100% without a doubt going to be making money off of GNE with every MW they sell in these locked in PPA's. Why GNE don't use the money they make of their fossil fuel burner Huntly to actually invest in their own future and own the assets outright is beyond me.
"The question that wasn't answered, and is not company specific, is why did the Wholesale Power price (in Australia) collapse post 2018? The hint is that new generation is being underwritten, (by Australian government betting on Solar / Gas-led recovery) regardless of market price indicators. (Italics mine Davexl)
The lesson here is, could the same fate befall Genesis Energy on the NZX, which like AGL, is primarily a fossil fuelled company with rent-a-green generation assets and concomitant contracted power pricing? The answer is, because wholesale power prices do go up and down, this is exactly what will happen to GNE. It is merely a matter of 'when'.
SNOOPY
discl: do not hold AGL or GNE"
Seems to me, the proposal by Contact to create a joint Thermal Power structure in NZ,
https://www.nzherald.co.nz/business/contact-energy-earnings-lift-by-107m-seeks-thermal-asset-consolidation/M4AI2N3C3IHDQKHGO2HLIYS53M/
to isolate Good Power from Bad (Thermal asset Power) is similar to AGL's stated intentions in Aust.
NZ Government backing Onslow is a long term sign of things to come, but what are the Short Term actions to come?
Additional power security regulation, under-writing of grid-scale battery building, solar generation (already happening from the private sector with Sunergise / Todd and Lodestone Energy). The government could force down wholesale rates on its own (except high execution risk!) unless the private sector do more to seize the initiative off government first. eg Sorting out Gas shortages keeping wholesale rates artificially high, building more fast peaking plant? Profitability going forward could be much lower with the government involved even with the risk of a lower govt dividend
I'm not too worried about Onslow given chances are it will be a net consumer of energy. I see distributed solar as a bigger threat given the trends in the past 5 years have shown strong capacity growth in residential, commercial and industrial installations. I think solar has the potential to negate any EV related growth.
Harbour Asset Management :
We had previously been concerned that the Minister of Energy might consider structural changes to the market design or breaking up certain assets held within the co-owned gentailers. The high wholesale prices for an extended period haven’t been helpful either, albeit easy to explain with low lake levels, gas outages and availability of generation plant. However, the terms of reference released by the energy minister to MBIE, specifically excludes any analysis on the ownership structure, governance, or ways to reduce demand of generation investment. This is a relief as you do not fix a market simply by shifting assets around. You need to build more capacity and resilience.
From this mornings Herald...
Forsyth Barr said the August 9 blackouts and subsequent fallout had dominated the month.
There had also been unexpected Cook Strait cable constraints and record carbon prices.
"We are more cautious on the near-term outlook for the electricity sector than we have been historically, with regulatory/political risk rising a notch in August and the spread between dividend yields and market interest rates falling to a record low," Forsyth Barr said.
Forsyth Barr has given Mercury, Meridian and Trustpower an "underperform" rating.
Genesis Energy is the only stock rated as "outperform" by the broker.
August 2021 was "probably the most remarkable month" in the electricity market since it began 25 years ago, with three significant and unusual events - the August 9 blackouts, the level 4 lockdown and constraints on the HDVC link.
These events occurred against a backdrop of improving hydro storage conditions with hydro storage lifting from 109 per cent of average at the beginning of the month to 127 per cent of average by month end.
"Of these events, the blackouts have the potential for the greatest sector-wide impacts, with four investigations taking place," Forsyth Barr said.
In addition to the three wholesale electricity market events, on September the Government held its third NZ carbon unit auction which saw the spot price spike to $59 a tonne.
https://www.bbc.com/news/world-europe-58556073 Price of power and gas rising dramatically across Europe. Begs the question, will it happen here?
Maybe one day all of the world's power grids will be connected to avoid these sort of things.
Australia is doing an underwater cable to singapore.
Low-user electricity tariffs will be phased out over 5 years
https://www.stuff.co.nz/business/126...t-over-5-years
I'm not certain that this move will cause the desired result, namely lower power bills.