Keep burning coal + pass on carbon tax + take $2- 5 Billion in cash compo from Gillard = Division One Jackpot
Julia Gillard wants to be a global philanthropist, presumably giving away other people's money.
She's doing pretty well right here. Environment Victoria has commissioned financial analysis that suggests that Victoria's privately owned brown-coal power stations could book from $2.4 to $5.4 billion in gifts of free cash from the astoundingly stupid Gillard Government. The money comes on top of the right to business as usual burning coal, a regulatory framework where all the carbon tax costs are passed on ++ to electricity users and where the only deliverable for receipt of the Gillard largessse is a statement on the news that "we're very happy with the compensation package the master negotiator gave us. She was a tough negotiator, tough but fair."
Coal bags carbon profit
- Date February 20, 2013
AUSTRALIA'S highly emitting brown coal power generators will reap $2.3 billion to $5.4 billion in windfall profits from carbon price compensation, an analysis by a leading energy market expert has found.
While brown coal power plants based in Victoria's Latrobe Valley will get billions in compensation, the analysis suggests they have so far been able to pass on all of their extra costs of the carbon price - thus turning the compensation into pre-tax profit.
The analysis carried out by Bruce Mountain, director of consultants Carbon + Energy Markets, looked at half-hourly spot prices for electricity sold from four Victorian brown-coal fuelled power plants - Hazelwood, Yallourn, Loy Yang A and Loy Yang B - over the first six months of the carbon price.
Environment Victoria, which commissioned the analysis, demanded the federal government review the compensation for coal power plants.
Read more here.
Governing and negotiating is easy when you have plenty of other people's money to give away.
For completeness I should add that Greg Combet disagrees with the financial analysis, but he has doesn't say where it's gone wrong. He has no argument with its methodology, its assumptions, its arithmetic, its projections. He says it's wrong because
1. it was based on ideology (which you can't put in the bank)
2. it was designed to further attacks on energy investors
I still reckon the odds are on the side of the brown coal power station operators laughing all the way to the bank as a result of their encounter with the global philanthropist. Wake me when it's over please.