By now many would be aware of the unscheduled outage at the Callide Generator in QLD. This has had a detrimental impact on pricing which is not expected to last long.
The impact of Callide has been immediate, with significant increases in spot prices. Futures pricing for Q2 in NSW and QLD is almost double that of Q3, VIC and SA have increased by a margin of roughly 50%, which indicates an expectation of generation stabilising quickly and a restoration of market confidence.
Pricing had stabilised at around $40/Mwh, which historically is a fairly normal position once major events are excluded, this is reflected in retail pricing received across the NEM in the last 6-12 months. The primary reason for this has been due to a reduced demand which has reduced black coal and gas generation and increased generation availability from new renewable generation assets and brown coal. Coupled with reduced demand, these increases in generation capacity have been favourable for pricing.
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