Australie : July 16, 2008

The last twelve months have seen dramatic increases in both average pool and contract market prices across the Australian electricity market.

The main reason cited is the on-going drought as it relates to hydro-generation capacity. There are also problems for coal-fired power stations as they have reduced access to the vast amounts of water required to generate their power. Recently, fears of continued increased pricing were somewhat allayed with an abundance of rainfall in New South Wales and Queensland over the past summer. Temperatures were also milder during this time.

A spokesman for Country Energy advised that forward pricing is increasing due to the expected generation supply shortage in the future, increasing national consumption and confusion about green house gas (GHG) emission targets. The National Greenhouse & Energy Report Act (NGER Act 2007) is now in place. The Act will start from 1 July 2008 with its intention being to remove the level of duplication which currently exists amongst various State and Federal emissions reporting schemes. The Act lays the foundation for national reporting of gas emissions, abatements and energy production for industry stake holders. It is hoped that the information collected will streamline the process and shorten the time required for the allocation of permits and incentives for abatement action.

An organization or individual location will be required to report on GHG emissions or energy consumed which is equal to or greater than the specified quantity per financial year. An individual location with emissions greater than 25 kilo tons or that produces/consumes 100 terajoules or more of energy per year will need to report. There is no indication at this stage as to what the increased costs will be under the Act, but it is hoped that consumers will not have to pay too much more for carbon credits on top of the increases they have had to pay for electricity rates.