EnergyAust takes big earnings hit

EnergyAustralia’s half-year earnings fell more than half as it battled a competitive market and falling output from power stations.

EnergyAustralia manging director Catherine Tanna. Picture: AAP

Electricity retailer EnergyAustralia’s half-year earnings slumped by more than half as it battled a competitive market and falling output from the Yallourn and Mt Piper power stations.

The Australian unit of Hong Kong’s China Light and Power said it earned $148 million for the half year, against $375m the year before.

The 2017-18 result was flat­tered by soaring wholesale electricity prices sparked by the early closure of the Hazelwood and Northern coal-fired stations in Victoria and South Australia ­respectively. Fellow big three generation and retail giants AGL and Origin Energy are due to report their interim results to the sharemarket from later this week.

EnergyAustralia said it paid corporate tax of $191m in the latest six months, suggesting a tax rate well above the 30 per cent corporate tax rate.

Wholesale prices have moderated since, with a deluge of wind and solar power coming onto the market and making conditions more difficult for coal-fired generators that also battle scheduled and unscheduled maintenance shutdowns to stay in the market.

The federal government has also cracked down on retail pricing, demanding reductions in the default offers to retail electricity consumers.

EnergyAustralia said it made good progress in the first half of this year, with continuing programs to improve customer service and support the modern­isation of Australia’s energy system, despite its lower-than-­expected financial performance.

The company has previously been critical of a lack of integrated energy and environmental policy, and managing director Catherine Tanna said the “trilemma” of ­reliability, price and pollution still needed to be solved.

“People want the clean energy transition but many are struggling with rising power bills,” she said.

“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.”

The company said its retail business simplified its product offer, implemented a new regu­lated default price safety net and committed to only working with third-party comparator websites that present the company’s offers in an easily understood format.

Customer churn was down but account numbers fell about 2 per cent, also lowering margins.

EnergyAustrlaia said the Mt Piper plant in NSW had a significant decline in the quality and quantity of coal deliveries and it was working with the state government and Centennial Coal, owner of the sole mine supplying Mt Piper, to source alternative fuels, to ease constraints on the power station.