While accepting that combined cycle gas turbines should have an increasing role to play in base-load power, lets not kid ourselves that this will be cheaper than coal. In view of global warming, this is probably a price that consumers will have to bear.

It's difficult to structure private sector finance for "spare" capacity in a pipeline as APIA has correctly said. What is needed is a true PPP whereby the Government supports the finance required for the spare capacity. Unfortunately in NSW, the Government's idea of PPP has been to extract as much cash as possible from the private sector up-front rather than to attempt to structure a feasible long-term financial arrangement.

In a truly competitive national electricity market, prices may or may not be "lower than they would be in a market dominated by government-owned companies", as Origin claimed.

The reality of what happened in the years after the Victorian generators were privatised is that strong union pressure in NSW ensured that uneconomic Government owned stations remained online, probably resulting in lower wholesale prices than might otherwise have been the case. These prices were certainly lower than the Vic Government or the legion of pricing "experts" assumed.

To the extent that these prices affected commercial prices, two results inevitably followed. First, a financial disaster for the purchasers of the Victorian generators and second, the wrong signals for new investment in base-load capacity.

Tony Norris

Chairman

Austral-Powerflo Solutions