Yallourn’s$400m maintence job

By PHILIP HOPKINS

ENERGY Australia willbring forward $400 million of maintenance work at Yallourn power station to stop fallingprofits at the plant, which contributed to a$HK5.3 billion ($1billion) full-yearloss for theHong-Kongbased company.

The Australian Financial Review reported thatthe heavyoperating deficitsfor the year ended December 31 compared with aloss of $HK83 million ayear earlier.

The Hong-Kong-listed parentcompany, CLP Group, describedthe past year as one of “unprecedented conditions”, which included a suspension of the National Electricity Market last June, the AFR said.

Melbourne-basedEnergy Australia, which is Australia’s third-biggest retailerofpower 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 willbeclosed this year,followed by the other two in 2024, CLP said. Energy Australiaput the cost of “major scheduled outages” at about $400 million.

In 2021, the company negotiated asecret deal with the Victorian government to keep Yallourn power stationoperating until 2028.

The AFR said the forced closures had madeEnergyAustralia to cut backits target for forward contracting of power salesat 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 companytoincur much higher costs to settle forward sales contracts.

The company also blamed the situationon coal supplyissuesatthe Mt Piper generator in New South Wales.

The Australian businessposted an underlying lossof$128million in earnings before interest, tax, depreciation,amortisation and fair value adjustments, down from aprofit of $486 million ayear earlier.

“The perfect storm of events we experienced in 2022 reinforced that we are now operating in avery different, more uncertain environment at the sametimeasAustralia’s energy transformation is accelerating,”saidthe managing director, Mark Collette.

Energy Australia was going forward with aplan “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 pricesbyboth the federal and NSWgovernments.

TheAFR notedthat Energy Australia has investments in lower-carbon power, including building anew gas and hydrogen power plant in the NSW Illawarra. The company, which saidthe $300 million project was on trackto start up by next summer, is also developing battery products in Victoria and NSW.