Spot prices back to gory days of 10 years ago on the last hurrah of carbon

With the carbon tax machinations in Canberra seeming to be at an end today (at least until they start up again over Direct Action) this snapshot from NEM-Watch reminded me of the lowest price depths achieved early in the last decade when the NEM was also awash with surplus capacity – at least in VIC and NSW:

Opening up NEM-Review to trend price data since the start of the NEM, we see that average monthly prices were seldom all in the twenties simultaneously (levels seen this afternoon in the snapshot above):

We’ll have to look further, later, to see how quickly carbon is unwound out of all bids, but it seems likely that the residual level speculated about here will quickly disappear (after all, who’d want to attract the ire of Clive?).

However that’s not the only factor.  As the trend of declining demand continues, it’s worth highlighting the overall level of surplus scheduled generation across the NEM – as shown here:

This chart speaks of a world of pain to come for generators, before supply and demand are brought back into balance.