By Tristan Edis
AGL is by far the biggest beneficiary because they have recently acquired Macquarie Generation’s Bayswater and Liddell Power stations and also own the Victorian brown coal Loy Yang A (also recently bought for a bargain basement price just in 2012). Loy Yang A, as well as other Victorian brown coal generators, including those probably bought for next to nothing by GDF Suez in 2011 (due to the expected impact of a carbon price which is now no longer) will see large increases in profit because power prices will rise as the more expensive black coal generators set prices in the market.
In addition it is likely to also lead to an uplift in wholesale electricity prices for all generators because NSW black coal is more expensive than Victorian and Qld coal generators and theywill have more opportunities to price their output closer to that of very expensive gas power producers who are the next increment of supply.
Read more here: Business Spectator