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First-half highlights:
- Committed to the Energy Charter, a landmark initiative aimed at uniting the energy industry to deliver better service for Australians
- Held electricity prices flat for Victorian households in 2019 by paying more than $15 million worth of increases in supply-chain and other costs
- Simplified the EnergyAustralia suite of energy plans, introducing fixed prices for the term of contracts, eliminating conditional discounting and exit fees and applying discounts off the entire energy bill
- Acquired 49 per cent in solar and LED lighting company, Echo Group, to better cater for industrial and commercial customers with cutting-edge technologies
- Managed gas-fired Newport and Jeeralang assets to generate 65 per cent more energy than the corresponding period last year, providing greater reliability and lower-priced electricity
- Announced plans to invest more than $80 million in upgrades at the Mt Piper power station to expand the plant’s capacity by 60 megawatts (MW), enough electricity to power an additional 55,000 NSW homes
- Began operating utility-scale battery storage systems, Ballarat and the co-located Gannawarra solar farm, representing a combined storage of 80 megawatt-hours
- A survey by consumer advocacy group CHOICE of energy offers for the 12 months to April 2019 found EnergyAustralia offered the most competitively-priced deals of any retailer in New South Wales and South-East Queensland
EnergyAustralia, one of the country’s leading energy retailers, today said it made good progress in the first half of 2019 with ongoing programs to improve customer service and support the modernisation of Australia’s energy system, despite a lower-than-anticipated financial performance.
A competitive retail market and lower output from the Mt Piper and Yallourn power stations were reflected in a contribution of A$148 million in operating earnings to owner CLP Group in the six months ended 30 June 2019, compared to A$375 million a year ago. The company’s corporate tax for the first half was A$191 million.
During the half, EnergyAustralia’s retail business simplified its product offer, implemented a new regulated default price safety net and committed to only working with third-party comparator websites which present the company’s offers in a format that is easily understood and comparable. While customer churn was lower, account numbers decreased by around 2 per cent in the first half. Consequently, both customer accounts and margins reduced.
In generation, EnergyAustralia is addressing constraints at both its major generation assets which materially lowered output. The Yallourn power station in Victoria has operated with restrictions while safety improvements were made following a workplace fatality in late 2018. Meanwhile, the Mt Piper plant in New South Wales has had a significant decline in the quality and quantity of coal deliveries.
An anticipated reduction in future earnings related to the EnergyAustralia retail business, announced in June, led to a one-off, non-cash impairment of goodwill of HK$6,381m. The impairment, prompted by the introduction of the regulated price safety nets, was to the accounting value of customers acquired in 2005 and 2011 in Victoria and New South Wales.
Backing a modern Australian energy system
In the first half EnergyAustralia introduced measures to support vulnerable customers and make it easier and simpler for households and business to find a better power deal.
Meanwhile, EnergyAustralia continues to assess a portfolio of projects, including gas-fired generation and pumped hydro opportunities, to add additional capacity and reliability to the national grid and help ease pressure on wholesale power prices.
Managing Director Catherine Tanna said:
“People want the clean energy transition, but many are struggling with rising power bills. Cost, emissions and reliability – it’s the trilemma
“The community isn’t asking for anything that’s unreasonable or out of reach. All the ingredients for a modern, cleaner energy system already exist, and it’s taking shape; it’s a system underpinned by wind and solar power, supported by storage, like commercial batteries and pumped hydro, demand response, energy efficient technology and flexible generation.
“The challenge isn’t technology, or even engineering – it’s planning.”
Outlook
In an intensely competitive retail market, customer service remains the company’s priority in the second half of 2019. EnergyAustralia will continue its program of encouraging people to consider better energy deals. Around 50,000 EnergyAustralia customers have responded to the campaign since May and have made the switch.
The company is also working with the New South Wales government and Centennial Coal, owner of the sole mine supplying Mt Piper, to source alternate fuels, to ease constraints on the power station. Operations at Yallourn are expected to return to normal during the second half of 2019 as operational and safety improvements are completed.