EnergyAustralia, one of the country’s big three privately owned “gentailers” that provide generation and retailing services has reported a return to profits in the first half, courtesy of the higher wholesale electricity prices it helped engineer in its key markets.
The company announced late Monday that its net profit for the first half of 2024 was $A119 million, compared to a loss of $A112 million in the same period in 2023. Its operating earnings rose nearly five fold to $432 million from $91 million.
A statement from EnergyAustralia made no mention of the jump in wholesale electricity prices in the June half, and the June quarter in particular, but it was acknowledged by its parent company, the Hong Kong-based CLP.
“Margins for EnergyAustralia’s Energy business improved thanks to higher realised prices for electricity from its power stations,” the CLP statement says.
“During the second quarter, wholesale electricity prices rose substantially due to reduced renewable energy generation and outages of other power plants in the National Electricity Market, particularly in New South Wales.”
But while blaming renewables and outages is the common refrain in mainstream media, the Australian Energy Regulator noted in its report on wholesale electricity price spikes in NSW that it was largely the result of bidding behaviour by the big utilities, including EnergyAustralia.
“While rebidding to maximise profits is permissible under the National Electricity Rules, the behaviour may not have been in the best interests of energy consumers,” the AER wrote at the time, noting that the high prices would likely flow to consumer bills.
Subsequent quarterly reports from both the AER and AEMO noted that without the price spikes in May largely caused by this bidding behaviour, and the slow ramping up of capacity by all three big players, then wholesale electricity prices would have actually fallen in the second quarter, rather than jump by around 25 per cent.
“EnergyAustralia keeps customer satisfaction at the forefront of its business,” CLP writes in the interim report, although it notes that the number of customer accounts had fallen 23,200 in the first half, or around one per cent, as customers chased better deals elsewhere.
It insisted its “churn rate” remained below the market average and said the number of customer accounts supported by its assistance program had increased to over 57,200 as of 30 June.
“Many Australians are feeling the impacts of the rising cost of living. To any EnergyAustralia customer facing difficulties, please call us so we can help,” EnergyAustralia CEO Mark Collette said in a statement.
Among its main assets, EnergyAustralia says its Mount Piper coal fired power generator in NSW improved its output, largely because coal deliveries had improved, and the Yallourn brown coal generator in Victoria is working through its maintenance program.
EnergyAustralia is also boosting its flexible assets, the category that sets most of the high wholesale prices, with the 320 MW Tallawarra B peaking gas station coming into full service in June, and work continuing on its portfolio of storage projects.
EnergyAustralia already contracts the output of a number of big batteries, and will do the same for the 250 MW, 2,000 MWh Kidston pumped hydro project being built by Genex in north Queensland. It has also signed a 12-year ‘virtual toll’ offtake agreement with Akaysha Energy for its huge Orana battery in NSW.
The company is also working on its own battery storage projects, including the 350 MW, 1,400 MWh Wooreen battery in the Latrobe Valley not far from Yallourn, at Mt Piper and at Hallett (50 MW, 200 MWh ) in South Australia. Its proposed Lake Lyell pumped hydro project near Mt Piper has also received state significant status.
