CS Energy told to prioritise existing coal-fired power over renewables

CS Energy’s attempts to expand into renewable energy were knocked back by the state government ahead of catastrophic incidents at Callide Power Station.

CS Energy’s attempts to expand into renewable energy were knocked back by the state government over concerns the company should be focusing on safe maintenance and management of coal-fired assets.

Treasurer Cameron Dick confirmed his department knocked back the beleaguered state-owned company’s attempt to break into the renewables sector in 2020 because the government believed it should focus on its core business.

But he maintained the state government was not aware, until recent weeks, of the broken culture at CS Energy laid bare in separate landmark reports into two catastrophic incidents at Callide Power Station.

Forensic engineer Dr Sean Brady, in his final report into the 2021 explosion of Callide Unit C4, the incident was traceable to a failure to implement effective process safety practices.

And consultants HartzEPM found CS Energy had been informed in numerous reports of structural distress at Unit C3’s cooling towers before its partial collapse in 2022.

The Brady report revealed a review in 2019 found CS Energy had a maintenance backlog across all assets, with the company warned a failure to rectify the backlog increased the risk of an incident.

Callide C power station, which at full capacity makes up 15 per cent of Queensland’s electricity generation, is owned in a joint venture between the state government’s CS Energy and privately run IG Power.

In 2020 CS Energy attempted to negotiate with Queensland Treasury to use surplus cash balances for investments in new and existing assets, but was told debt management had to be considered equally with portfolio renewal.

Treasury also imposed limitations on CS Energy’s investment into renewable energy projects.

Treasurer Cameron Dick on Thursday. Picture: David Clark

Mr Dick confirmed this was the only time Treasury had knocked back CS Energy’s funding requests.

“CS Energy at that time when they wanted to expand into renewable energy projects … should have been focusing on its core business,” he said.

“The government’s view was CS Energy should have focused more on safe maintenance and management of their existing coal-fired power stations and not on expanding.”

But Mr Dick insisted the government was not made aware of the troubles within CS Energy, and said there was a clear difference between the role of him and Energy Minister Mick de Brenni as shareholding ministers and the leadership of CS Energy.

“All the evidence is clear about CS Energy now and the organisation and it’s broken culture and that’s what we are working on fixing as a government,” he said.

CS Energy chair Adam Aspinall and chief executive Darren Busine issued a mea culpa on Wednesday for not having maintained the world-class performance expected.

Mr Aspinall also absolved ministers Mick de Brenni and Cameron Dick of blame and instead pointed the finger at their joint venture partner IG Power.

“I acknowledge that the information which CS energy used to brief the government was ambiguous and did not include commentary on the maturity of CS Energy’s process safety management systems or details of the maintenance backlog,” he said.

“For this I also extend my apologies to the government.

“I confirm that all funding requests for maintenance and capital expenditure on our generation assets have been approved unadjusted by shareholding ministers.”

Documents filed by CS Energy in its fight with its insurers had previously revealed the state-owned company lost $317.8m in profits from Callide C being down as of August 2023.

And the cost of rebuilding Unit C4 was about $102m as of mid-2023.

Originally published as CS Energy told to prioritise existing coal-fired power over renewables