Energy Business: Genesis Will Seek ETS Recompense After All
July 20th, 2010
Genesis showed more political nous than Contact or Mercury by saying it would not be raising tariffs as soon as the ETS came into force on July 1, but this doesn’t mean the company won’t recoup the impact. Its Statement of Corporate of Intent for 2011-2013 identifies the recovery of carbon costs, along with oil prices and the balance between new generation and electricity demand growth, as a key uncertainty over the period the SCI covers, and foreshadows its own intention to raise tariffs. Genesis says “any failure to recoup the cost of carbon would result in adverse commercial outcomes should carbon-intensive plant run,” referring to the gas and coal-fired 1000MW Huntly plant, which will increasingly only run when hydro storage is low or other factors push up national wholesale energy prices. Genesis expects “modest prices increases will occur across the market to reflect underlying cost pressures (including carbon) and the price of new generation.”
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