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More capacity existing the market - how will prices change?

Oct 04, 2013

There is speculation that the 980 MW Wallerawang coal power station could be mothballed in 2014.  The station was recently purchased by Energy Australia with the neighbouring Mt Piper station for a paltry $160 million.  Recently, a non-binding notification for the withdrawal of a similar level of capacity was issued - and has remained unchanged post the general election.  More commentary on the issue can be found at Renew Economy and Watt Clarity.

With generators relying on fossil fuels struggling with the combined pressures of the carbon price and increased renewables, it was only a matter of time before excess capacity started to exit the market.  In fact, many generators have already had their capacity curtailed in this new paradigm.  The pricing implcations of these shifts in the energy market will play out over the next few years.

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