IES’s NEO data visualisation tool has a special and extremely useful form of processing in its toolbox that generates what we call a premium curve. Such curves can be displayed on a chart of NEM regional spot prices over some period such as a year, along with the fixed and variable costs of a range of supply technologies. In this article IES’s CEO, Hugh Bannister, uses this chart to review and provide some insights into the evolution of NEM prices over the years.
Then, as an exercise, he attempts to use this tool to analyse Snowy 2.0’s place in the system. However, Snowy 2.0 appears as an outlier when analysed from several angles. It’s also very hard to reconcile its commercial operation with Angus Taylor’s target wholesale price target of $70/MWh unless that number is rather short term. Under a premium curve analysis, Snowy 2.0 is a strange case indeed.