A key issue for NSW coal fuelled generators is that they must compete against exports for coal. Average prices paid for coal are lower than export prices because (i) the coal quality is at discount to export spec coal. NSW generators are designed to run on high ash, lower calorific coal (call it crap coal if you like, certainly I wouldn’t want to live next to a generator burning it) (ii) Generators are protected by historic contracts. For virtually all four generators those contracts will have expired by 2025 and for Vales Point B and Eraring earlier. Mt Piper is entirely dependent on Springvale and will need a coal unloader to access additional coal supply.
ITK coal price forecasts are restricted to paying clients. Still we make the following information available. We also offer up that in our view a new mine requires a coal price of at least A$100/t to earn a return on capital. Even then it would probably want some semi coking coal in the mix
On this page you can see that even though only 26/196 mt of coal produced in NSW goes to the NSW electricity generation sector nevertheless there are a number of mines heavily dependent on the generators. This dependency is mitigated in that basically Centennial, Glencore and Peabody are the major owners in NSW and can manage individual mine risk
The new coal mine proposals for NSW are extracted from Lock the gate page, the coal mine production is from the Dept of Mines and the analysis is ITK. Chain Valley and Sprinvale are currently the coal mines with the most issues.
A key issue for NSW coal fuelled generators is that they must compete against exports for coal. Average prices paid for coal are lower than export prices because (i) the coal quality is at discount to export spec coal. NSW generators are designed to run on high ash, lower calorific coal (call it crap coal if you like, certainly I wouldn’t want to live next to a generator burning it) (ii) Generators are protected by historic contracts. For virtually all four generators those contracts will have expired by 2025 and for Vales Point B and Eraring earlier. Mt Piper is entirely dependent on Springvale and will need a coal unloader to access additional coal supply.
ITK coal price forecasts are restricted to paying clients. Still we make the following information available. We also offer up that in our view a new mine requires a coal price of at least A$100/t to earn a return on capital. Even then it would probably want some semi coking coal in the mix
On this page you can see that even though only 26/196 mt of coal produced in NSW goes to the NSW electricity generation sector nevertheless there are a number of mines heavily dependent on the generators. This dependency is mitigated in that basically Centennial, Glencore and Peabody are the major owners in NSW and can manage individual mine risk
The new coal mine proposals for NSW are extracted from Lock the gate page, the coal mine production is from the Dept of Mines and the analysis is ITK. Chain Valley and Sprinvale are currently the coal mines with the most issues.