Canvassing for Opinion - aka "Blairs Brain on Cannabis"

IMHO prohibition sentiment requires inherent addiction to status quo, an incapacity to visualise beyond the here and now and a desperate desire to know others might feel the same... Reform is not revolutionary, rather it is evolutionary. Having survived banging your head against a brick wall the evolutionist relishes having stopped. / Blair

Friday, March 04, 2005

Cost of coal puts Huntly on hold [NBR]

Power company Genesis says it will defer the development of two coal-fired generators at Huntly, a decision Solid Energy CEO Don Elder said was down to the cost of coal.

The coal is there, he said, but the costs of extracting and moving it made it too expensive in today's electricity market.

"The issue here is about prices. Our reserves estimates have not changed. We have always said there are 200-300 million tonnes of coal in the Waikato, and we stand by that," he said.

Dr Elder said that Solid Energy recently completed work to rank each individual coal reserve in the Waikato into a priority order, from most easily recovered to the hardest and most expensive.

"We shared this information with Genesis. At today's electricity prices they are only comfortable with buying 50 million tonnes of our coal the coal that is most easily recoverable."

Dr Elder said that to recover more of the reserves, there were issues that had to be worked through.

"These include, for example, the location of current and planned state highways. Resolving them will naturally add cost.

"Genesis has taken the view that as of today they are not prepared to pay the higher prices for additional tranches of coal. However, I note in their statement that they are only putting these power stations on hold, not cancelling them. As electricity prices rises, they may well revisit the issue of using more Waikato coal for generation, as indeed may other power companies.

"The physical amount of coal has not disappeared. The issue is the amount of coal people want will always be governed by the end price of electricity, " he said.

(c) National Business Review

-- ends --

also see "CoalFace" http://www.solidenergy.co.nz/newsletters/0604.pdf

Blair Anderson
(643)3894065
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