The 5-year bear market has come to an end and it would appear that not just spot but forward prices are settling higher with recent movement in the last six weeks of +5-10/MWh across key states of NSW and Victoria.
Over the last two years we have seen in NSW Wallerawang and Redbank close, in SA Northern, Playford close and Pelican Point indicate it has sold its gas to LNG production. In Queensland, Stanwell E has also sold its gas for LNG. These capacity withdrawals have more than offset the additional wind farm capacity of 1.2TW. More importantly the additional capacity has been in Victoria, SA and Tasmania. Markets like NSW has <0.4TW of new wind, yet has lost 1.1TW of coal fired generation.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
