CS Energy cuts losses with payout for Callide explosion, remains committed to sweating old coal plants

Queensland’s state-owned utility CS Energy has cut its full-year loss after lifting generation by about 1,000 gigawatt-hours, and collecting a one-off insurance payment following an explosion in 2021 at one of its coal-fired power stations.

The 2025-26 annual report shows CS Energy recorded a net loss after tax of $27.4 million, a reduction from the previous year’s net loss of $324.4 million net.

“The improvement was driven by insurance recoveries, reductions in site costs and corporate overheads and lower depreciation,” the report says. Those gains are countered in part by a drop in gross margins as the spread of utility batteries lowered electricity prices.

CS Energy’s underlying EBITDA for the year was $290.9 million, up about 10-fold from the previous year primarily because of the one-off insurance receipt related to its “2021 Callide Unit C4 incident”.

That incident resulted in CS Energy being fined for operating without the required regulatory approval when one of its units blew up in May 2021, nearly crashing the grid in the process.

Renew Economy asked CS Energy about the size of the insurance payout for the 848-megawatt C4 unit. The annual accounts list the payment as among “Other Income” items for the year that totalled a bit more than $236 million.

CS Energy said it generated 10,544 gigawatt-hours of electricity for the National Electricity Market, up from 9538GWh in the 2024-25 year.

Greenhouse emissions totalled 11.393 million tonnes of carbon-dioxide equivalent for the year. Renew Economy asked CS Energy how that tally compared with the previous year’s, although the increase appears to be at least 10%.

Improved availability of CS Energy’s thermal plants was one factor in the increase of both electricity and, presumably, emissions.

Year-on-year thermal plant availability rose to 80.8% for the year, up from 72.1% during 2024-25. During the summer peak, plants were offline 2.9% of the time because of “forced” outages compared with 6.62% a year earlier.

CS Energy spent $187.6m on its existing thermal generation fleet during 2025-26, while it outlayed almost three times as much – at $505.9m – on enterprise, renewable and firming assets.

These includied their Chinchilla and Greenbank batteries, the Brigalow gas peaking plant, and the Lotus Creek and Boulder Creek wind farms.

The company noted batteries, in particular, were making deep market inroads.

“In the December 2025 quarter, renewable electricity and storage assets supplied more than 50% of on-grid NEM demand for the first time and coal-fired generation contribution fell to an all-time quarterly low,” the report noted.

“More than 1400MW of new entrant BESS projects were commissioned in Queensland in the past year, which contributed to a significant reduction in the volatility of electricity pool prices, particularly in the morning and evening peak demand periods,” it said.

As of the end of June, BESS projects totalling a further 900MW were under development or being commissioned in Queensland, CS Energy noted.

“In the [January-March] 2026 quarter, average quarterly gas-fired generation across the NEM was at its lowest since 1999, due in part to the commissioning of BESS assets, it added.

“The state had more than 800MW of new entrant wind generation commenced operation in Queensland during the year, causing a commensurate reduction in dispatch from coal-fired power stations, especially in the overnight periods when wind is highest in Queensland,” the annual report stated.

A further 1.350 GW of wind projects were under development or being commissioned in Queensland.

CS Energy said it remained committed to implementing the Crisafulli government’s energy roadmap that would keep coal-fired power plants in the grid longer.

The company noted there was on-going uncertainty about the physical effects of climate change “particularly regarding the magnitude, timing and geographic distribution of climate impacts such as extreme heat, rainfall and flooding.”

“These impacts may vary across locations and time horizons, and abrupt or non-linear climate effects may not be fully captured in current modelling approaches,” it said.

CS Energy has a new chief executive, with Stephen Harty taking over as of Monday. Harty had been serving as a non-executive director of CS Energy for three years.

Harty brings more than 25 years of experience in the energy industry across Europe, Asia, Middle East, North America and Australia, the company said.

He was chief executive of GLNG from 2019 to 2026, and prior to that held senior leadership roles with ConocoPhillips and Qatargas.

Brian Gillespie, the previous CS Energy CEO, tendered his resignation in March 2026.

CS Energy did not pay a dividend, matching the lack of a dividend during the previous fiscal year.

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