PHILIP HOPKINS
By PHILIP HOPKINS
ENERGY Australia will bring forward $400 million of maintenance work at Yallourn power station to stop falling profits at the plant, which contributed to a $HK5.3 billion ($1 billion) full-year loss for the Hong-Kong-based company.
The Australian Financial Review reported that the heavy operating deficits for the year ended December 31 compared with a loss of $HK83 million a year earlier.
The Hong-Kong-listed parent company, CLP Group, described the past year as one of “unprecedented conditions”, which included a suspension of the National Electricity Market last June, the AFR said.
Melbourne-based Energy Australia, which is Australia’s third-biggest retailer of power and gas, said it would close each of the four units at Yallourn in turn to find out the root causes of the forced outages at the 1480-megawatt generator last year.
Two units will be closed this year, followed by the other two in 2024, CLP said. Energy Australia put the cost of “major scheduled outages” at about $400 million.
In 2021, the company negotiated a secret deal with the Victorian government to keep Yallourn power station operating until 2028.
The AFR said the forced closures had made Energy Australia to cut back its target for forward contracting of power sales at Yallourn to lower its financial exposure from unexpected outages, which badly affected its profitability last year.
The breakdowns of units at Yallourn last year caused shortfalls in Energy Australia’s generation at critical times, forcing the company to incur much higher costs to settle forward sales contracts.
The company also blamed the situation on coal supply issues at the Mt Piper generator in New South Wales.
The Australian business posted an underlying loss of $128 million in earnings before interest, tax, depreciation, amortisation and fair value adjustments, down from a profit of $486 million a year earlier.
“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,” said the managing director, Mark Collette.
Energy Australia was going forward with a plan “to reset our performance over the next two years”, he said.
The company also said it was actively working with governments and gas and coal suppliers to meet the goals of recent interventions on energy prices by both the federal and NSW governments.
The AFR noted that Energy Australia has investments in lower-carbon power, including building a new gas and hydrogen power plant in the NSW Illawarra. The company, which said the $300 million project was on track to start up by next summer, is also developing battery products in Victoria and NSW.
