Off-line generators create supply deficit in QLD
In October 2012 the QLD state-owned corporation Stanwell Corporation advised that it would be scaling back generation in the Tarong Power Station due to falling wholesale electricity prices. It seems that the closure of two 350MW units at Tarong Power Station in Queensland over summer has meant that diminished supply by cheap coal-fired power plants has been replaced by peaking gas and oil fired power plants. This has resulted in the wholesale price of electricity nearing the peak of $12,500/MWh.
The 750MW that went offline with the closure of generation of unit at Tarong has resulted in the baseload requirements of QLD on hot days, when demand is high, to be in deficit. According to the Courier Mail, 8000MW is required to power the state and the closure of generation has left QLD with a baseload capacity of 7600MW. This deficit must be met by expensive generation units.
In late 2012, the Energy Users Association of Australia released a report stating that generators were deliberately withholding generation in peak times to create higher wholesale prices.