EnergyAustralia, one of the country’s big three energy generator and retailers, has plunged to a $1 billion loss for the 2022 calendar year, as it battered volatile markets, a lousy coal supplyand numerous outages at its two coal generators.
The company, a subsidiary of Honk Kong energy giant CLP Holdings, reported a $HK5.3 billion operating loss ($A1 billion) that it blamed on unplanned outages at its ageing Yallourn brown coal generator in Victoria, and insufficient coal supplies at its Mt Piper black coal generator in NSW.
This caused it to generate much less than planned, forcing it to go to market at a time of high prices to make up the supply for the contracts it had entered into with customers. It turned into a financial disaster, or what the company describes as the “perfect storm”.
“Our financial performance in 2022 was driven by volatile market conditions, asset reliability and coal supply issues,” EnergyAustralia managing director Mark Collette said in a statement.
“This is not where we wanted to be, and we are progressing a plan to reset our performance over the next two years.
“The perfect storm of events we experienced in 2022 reinforced that we are now operating in a very different, more uncertain environment at the same time as Australia’s energy transformation is accelerating.”
EnergyAustralia is due to close Yallourn in 2027 under a secret deal with the Victoria state government, and the Mt Piper coal plant is likely to close in the mid 2030s.
They will be replaced by bulk wind and solar, and by a series of large scale battery and pumped hydro storage that the company will contract or build itself.
It has already contracted for the output of the Riverina and Darlington Point batteries in NSW, with a total of 90MW and 180MWh, and the Kidston pumped hydro project in Queensland (200MW and eight hours storage) the first such project to be built in Australia for more than four decades.
It is also looking at its own 500MW, four hour big battery at Mt Piper, along with the Lake Lyell pumped hydro project nearby (350MW and eight hours), and another big battery (335MW and four hours of storage) at Wooreen, not far from Yallourn.
In the immediate term, EnergyAustralia has to spend $400 million to solve its coal reliability issues, particularly at yallourn where it will progressively close down each of the coal generator’s four units this year and next to ensure they are capable of lasting until 2027.
In the last year it said unplanned outages were driven by “latent and emerging age-related degradation” including multiple tube leaks at its generation units.
At Mt Piper, it is hoping that a new supply agreement with Centennial can guarantee it will get enough coal to throw into its boilers, while it also seeks to absorb the new price caps on gas and coal imposed by the federal and state governments.
“Our plan for 2023 focuses on actions to improve energy supply reliability from our major generation assets at Yallourn and Mount Piper,” Collette said in a statement.
“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.”
It says its Tallawarra B gas plant in NSW remains on track to be complete in late 2023, despite the collapse of its major contractor (Clough Engineering). It says it will be Australia’s “first carbon offset hydrogen and gas-capable power plant.”
