Some observations on new projects

There is currently a lot of discussion about energy prices. Most people seem to agree that the easiest way to reduce pricing pressures in any market is to add more supply. One of the interesting observations that is not generally making its way into the debate is the amount of new generation capacity that has been committed to or is under construction.

The Clean Energy Regulator publishes a database of these projects. It is really interesting to note that around 2,490 MW of projects are under construction or committed. The database is well worth a look at.

A policy that provides investment certainty, such as a Clean Energy Target (CET), will allow even further investment. When combined with many of the other recommendations of the Finkel Review, it will provide for a more orderly transition to a modern electricity system.

One Response

  1. bushwalker

    Dear Tim,
    Three paragraphs, all ambiguous:
    para 1: It’s not sufficient to add any old supply, it has to be supply at a lower price than the current price. This makes me wonder what’s going on in SA where the SA gov and Alinta are hellbent on building new gas-fired supply and AGL is refurbishing Torrens Island.
    para 2: 2.5 GW sounds like a lot, almost a nominal Liddell. But because it’s renewable it’s really only worth about 1 unit of Liddell.
    para 3: Investment certainty was destroyed when governments distorted the NEM to satisfy ethical considerations rather than financial ones. I fear your “modern electricity system” will be both less convenient and less affordable for all consumers than that of the much maligned previous era.


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