After energy prices in Queensland soared close to near record level, even though there was enough spare generating capacity to meet the demand spike, there was much confusion and outrage among major energy users.

Seeking insights to help explain the situation, our CEO, Paul McArdle was quoted by journalist Duncan Hughes from the Australian Financial Review:

“The managing director of market monitor NEM-Watch, Paul McArdle, said major Queensland companies with retail electricity contracts but some spot-price exposure such as Smorgon Steel, OneSteel, zinc smelters and magnesium producers, managed the risk by winding back operations during the peaks.”

Paul went on to explain how recent events in the industry were affecting prices:

“Demand across the National Electricity Market was very modest and there was oodles of capactiy, more than 38,000 MW, available. But with the demise of state-owned Enertrade there are only four significant generators in the state and they have no problems keeping the price above $9000. They are doing their shareholders a good service.”

“Attempts to top up supply from generators in NSW were constrained because the interconnector between the states could only export 200MW, which would have been insignificant for managing prices.“