Coal power problems plunge EnergyAustralia to $1 billion loss
Breakdowns at Victoria’s Yallourn coal-fired power station in the Latrobe Valley and problems sourcing coal for the Mt Piper generator in NSW have pushed electricity and gas supplier EnergyAustralia to a $1 billion full-year loss.
CLP Group, the Hong Kong-listed parent company of EnergyAustralia, revealed losses from the Australian business had blown out to $HK5.3 million ($1 billion) during 2022, compared with $HK83 million ($15 million) a year earlier.
The heavy losses, which made EnergyAustralia the group’s worst-performing division by far, were largely attributed to unexpected generating unit breakdowns at Yallourn and coal supply shortages curtailing output from its Mt Piper coal-fired generator.
The problems slashed EnergyAustralia’s power output and left it forced to source additional supplies from the grid to supply customers at a time of soaring wholesale prices. In the June quarter, average wholesale electricity prices across the east-coast grid reached $264 a megawatt-hour – more than triple the prior quarter’s average of $85.
“Our financial performance in 2022 was driven by volatile market conditions, asset reliability and coal supply issues,” EnergyAustralia chief executive Mark Collette said.
“This is not where we wanted to be, and we are progressing a plan to reset our performance over the next two years.”
The east coast electricity system was thrown into chaos last year, forcing the Australian Energy Market Operator (AEMO) to seize control of the grid for the first time to stabilise power supplies and avert threats of blackouts in multiple states.
The turmoil was driven by “multiple factors”, AEMO said, including a record level of coal-fired power generators being out of service for that time of the year, forcing expensive gas to fill the gap. Output from gas generators was 27 per cent higher compared with the same time last year, while natural gas prices soared on strong international demand due to the war in Ukraine worsening a global energy crunch.
EnergyAustralia said on Monday energy market conditions remained “challenging”, but stressed the company was committed to working hard to supply affordable and reliable access to energy for its customers. EnergyAustralia is the nation’s third-largest energy utility, supplying power and gas to 1.6 million homes and businesses.
The company said it would bring forward major maintenance shutdowns at Yallourn from 2024 to 2023, and had renegotiated new “multi-mine” supply arrangements with miner Centennial to boost supplies for its Mt Piper plant.
“Increasing reliable energy supply helps our customers by placing downward pressure on electricity price growth and supports an improvement in EnergyAustralia’s performance allowing us to unlock continued investment in the clean energy transformation,” Collette said.
EnergyAustralia’s 1480-megawatt Yallourn power station, which supplies about 20 per cent of Victoria’s electricity needs, is scheduled to close within five years after the company decided in 2021 to accelerate its retirement.
The company said it would invest about $400 million over the next two years on a maintenance program involving major scheduled outages of each of Yallourn’s four generation units.
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Source: Thanks smh.com