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Business highlights & milestones to 30 June 2021:
- Mark Collette appointed as Managing Director following Catherine Tanna’s decision to retire
- Announced Yallourn power station would retire in mid-2028, underpinned by a multimillion-dollar support package and a commitment to build Australia’s first four-hour utility-scale battery of 350 MW capacity by 2026 in the Latrobe Valley
- Committed to the 300+ MW Tallawarra B power station in New South Wales, which will be Australia’s first net zero emissions hydrogen and gas capable power plant
- Construction began on the 250MW Kidston pumped hydro facility in Queensland, made possible by EnergyAustralia’s Energy Storage Services Agreement
- Grew the Go Neutral community at no additional cost to customers (16 per cent increase in carbon neutral electricity; 89 per cent increase in carbon neutral gas)
- Improved customer advocacy through a 28.6-point increase since 2015
- Assisted more than 20,000 customers experiencing hardship from disconnection through programs, EnergyAssist and Rapid Business Assist, as at mid-July 2021
EnergyAustralia, one of the country’s leading energy retailers, today reported its underlying earnings fell in the first half of 2021 in line with reduced wholesale electricity prices amid rising gas costs. Despite this, the business forged ahead with plans to transition to cleaner forms of energy and continued to provide critical support for customers experiencing hardship during the coronavirus pandemic.
The retailer’s underlying earnings before depreciation and amortisation, interest, tax and fair value adjustments were down 18 per cent to $363 million in the six months ended 30 June 2021 compared to the same period a year ago.
Lower wholesale power prices, the increased price of gas purchase agreements, and a reduction in generation at Yallourn power station following heavy rainfall had the largest bearing on financial performance.
EnergyAustralia’s contribution to CLP’s half year earnings is a loss after tax of $31 million and includes settlement of a long-standing litigation and a provision of $46 million ($65m pre-tax) for ensuring Yallourn’s safe operation following the rainfall event. The company paid $48 million in income tax for the first half of the financial year.
EnergyAustralia Managing Director Mark Collette said:
“This year alone we have announced three projects along Australia’s east coast that will help to achieve EnergyAustralia’s goal of being carbon neutral by 2050 and we grew our Go Neutral community to around 300,000 customers. I’m proud that Go Neutral remains the largest certified carbon neutral program for electricity customers in Australia.
“The Wooreen battery in Victoria, Tallawarra B Project in New South Wales and Kidston pumped hydro storage facility in Queensland will be integral pieces of the modern energy system taking shape in Australia. They demonstrate what is possible when governments and industry work together in the interests of customers.
“We provided the energy market, local community and Yallourn workforce clarity by announcing the plant’s retirement in mid-2028 with seven years’ advance notice. Our approach sought to demonstrate coal-fired power can exit the market in a responsible and respectful way.
“EnergyAustralia continues to support any customer experiencing hardship in response to the coronavirus pandemic by providing a range of assistance in how and when payments are made to ensure their lights remain on.”
In July 2021, EnergyAustralia provided good news for the majority of residential and business customers on a market contract in New South Wales, South Australia and Queensland announcing that its average electricity rates had fallen.
Outlook
Market conditions in the second half are anticipated to remain challenging with intense retail competition and lower realised wholesale electricity prices (coupled with higher gas costs) than in prior periods.
Managing Director Mark Collette said EnergyAustralia continues to advance new energy projects so they can be ready to come online at dates that have been committed to. In the short term, preparation works to support Tallawarra B will begin later this year.
“In the second half we will progress major maintenance programs at our Yallourn, Tallawarra and Mt Piper power stations, ensuring they will be there for customers during the summer peak,” Mr Collette said.
“In addition, the essential work of relieving pressure on the Morwell River Diversion at the Yallourn mine continues, so we can a complete a damage assessment and determine what critical repairs can be made. Maintaining the health and safety of our people will continue to guide our approach to this work.
“We continue to support our communities. Our employees, with matching by EnergyAustralia, have already raised over $1 million for EnergyAustralia’s charity partners through Workplace Giving. This was accomplished in less than three years and shows the commitment of supporting the communities in which our people live and work.”