A unique opportunity to listen to Dr. Paul Simshauser, one the leaders in Australia's National Electricity Market, speak about investment issues in power generation infrastructure. Paul will be touching some of the most pressing problems with the current electricity market design and proposing ways it can be improved.

Place: Room 621/622, GP South (Building 78)
Time: Thursday 7th Dec, 10:30 morning Tea, 11:00am seminar

Speaker: Dr Paul Simshauser, Chief Executive Officer, Babcock & Brown Power
(BBP) (http://www.bbpower.com/)

Title:  The dynamic efficiency gains from introducing capacity payments in the National Electricity Market

Abstract:  By any standards, Australia's National Electricity Market (NEM) has been a beacon for those Governments in the Asia-Pacific region considering reforming their power generation industry.  Since the NEM commenced, plant availabilities have risen to world benchmark levels, generator cost structures have fallen sharply, prices are among the lowest in the world, and the oversupply of generating plant has virtually cleared. What makes this outcome so impressive is the perilous state that Eastern Australia found itself in at the onset of reform during the mid-1990s. However, while the energy-only gross pool market has served Eastern Australia well over the past decade, deep structural faults on the supply-side remain, and appear to be deteriorating.  The reason for this outcome is that competitive energy-only markets do not have a definable equilibrium solution unless reliability constraints are violated, or market power is exercised.  The densely compressed marginal running cost curves of the base, intermediate and peaking plant stock make cost recovery an almost impossible task for all plant, and particularly for peaking plant.  Without policy intervention, the NEM is headed for periods of supply shortages and unacceptable levels of load shedding.  This represents a political hazard for State Governments, who are ultimately held accountable for the performance of the deregulated NEM.  This research finds that by reducing
the Value of Lost Load and introducing a Capacity Payments Pool, a tractable equilibrium can be established that will ensure the timely entry of new plant.

Speaker Bio:
Dr Simshauser is the Chief Executive Officer of BBP. Dr Simshauser joined Babcock & Brown in September 2006. Prior to his appointment, Dr Simshauser was the Chief Executive Officer of NewGen Power, the joint venture between Babcock & Brown and the ERM Group, and was responsible for NewGen's interests in Braemar and NewGen Kwinana. Before joining NewGen, Dr Simshauser was General Manager, Marketing & Trading, at Stanwell Corporation, following a range of positions in corporate finance within the electricity supply industry in Queensland.

Dr Simshauser has a Bachelor of Economics and a PhD in Economics from the University of Queensland, and graduated from Griffith University's Business School with a Bachelor of Commerce and Master of Commerce (Accounting and Finance), and is Adjunct Professor of Finance at Griffith University.