EnergyAustralia, one of the big three Australian utilities that is owned by Hong Kong giant CLP, says it is getting closer to making a decision on its first big battery projects as it results improve and it continues its search for a new partner.
The company revealed that its operating losses for the first half had shrunk to $106 million from a massive $1.55 billion in the first half of last year.
EnergyAustralia says its pre-tax results had in fact nearly quadrupled – albeit from a tiny base of $26 million – to $92 million in the latest half. But it is still suffering from intense competition – it lost more than 2,000 customers over the six months – and the impact of legacy contracts.
The company says it expects to make a financial investment decision on its proposed 350MW, four hour (1400MWh) Wooreen battery by the end of the year.
This will partially replace the huge Yallourn brown coal generator that is due to close in 2028, but is to be located next to its Jeeralang gas generator at Hazelwood North in the Latrobe Valley.
EnergyAustralia is also sizing up an opportunity to build a 500MW, two or four hour battery at the site of its Mt Piper coal fired power station, and also a 335MW, eight hour pumped hydro project at the nearby Lake Lyell, although it has just filed planning amendments for that project.
These will be the first big storage projects to be actually built and owned and operated by EnergyAustralia, although it has entered into a series of contracts to operate battery and pumped hydro projects built by other developers.
It has off-take agreements, for instance, with the small Ballarat and Gannawarra batteries in Victoria, as well as the two of the newly-connected Riverina batteries in NSW (150MW and two hours storage).
It also has a similar agreement with the Kidston pumped hydro project in Queensland (250MW and eight hours storage) that is due to be complete by the end of 2024.
“After a difficult 2022, we are focused on strengthening our operational and financial performance in order to fully unlock our participation in the clean energy transformation,” EnergyAustralia managing director Mark Collette said in a statement.
“Our first half result is an early sign that we have emerged from the 2022 energy crisis as a stronger, more resilient business.
“Better operational performance enables us to improve outcomes for our customers including reliability and affordability.
“And as our coal assets approach retirement starting with Yallourn in mid-2028, better financial performance enables us to accelerate the development of renewable and renewables-firming projects that will shape our future and support Australia’s clean energy transformation.”
EnergyAustralia says it will spend $400 million upgrading all four units at Yallourn over the next 12 months, with two units to be out of action for much of the rest of this year, and another two next year. The work is being done to ensure the units can last until the planned closure date in 2028.
Work is continuing on the 320MW Tallawarra B gas and hydrogen peaking power station in NSW and it is expected to go into operation in time for the 2023/24 summer.
The company’s parent CLP has reportedly been scouting for potential joint venture partners, or buyers, for its Australian operations, and newspaper reports suggested that Macquarie Group had been looking at the business before deciding not to go ahead with any deal.
CKP chairman Sir Michael Kadoorie suggested that he company was still looking for partners.
“Understanding the value of partnerships based on our experience across the Group, we continue to evaluate the potential of forging partnership (sic) in Australia to support our strategic priorities in that market,” he said in a statement, without elaborating.
