Queensland government-owned CleanCo fails to meet its targets

The Queensland government’s much-vaunted renewable energy generator and retailer CleanCo failed to meet its own financial targets in its first year of trading, and did not pay the government a dividend.

Queensland Energy Minister Mick de Brenni. Picture: Steve Pohlner

The Queensland government’s ­renewable energy generator and retailer CleanCo failed to meet its financial targets in its first year of trading, and did not pay the government a dividend.

State-owned CleanCo — a key plank of the government’s 50 per cent renewable energy target by 2030 — started trading on the nat­ional energy market in October 2019 and secured permission to be a retailer in February this year.

Since then, it has struggled with diving consumer demand because of the COVID-19 pandemic and the proliferation of rooftop solar panels on Queensland houses.

The government-owned corporation’s gross profit for 2019-20 was $51.2m, coming in under the $68.6m target forecast in CleanCo’s statement of corporate intent, and its earnings before interest, taxes, depreciation and amortisation was a loss of $49.7m, compared with a $1.1m target.

It employed 68 full-time equivalent staff, instead of 89 as in its target, up from three permanent staff in 2019. However, it spent less on infrastructure (capital expenditure cashflow was negative $46m rather than the negative $223.8m forecast) because CleanCo had expected to start construction of a new renewable energy generator in 2019-20. That has been pushed back to next year.

The corporation did not pay a dividend to the government in 2019-20. Before it pays a dividend in future, CleanCo’s board will consider what funding it needs to ensure the financial viability of the business.

The government’s 2019-20 budget had forecast $519m in dividends from state-owned electricity generators, but collected only $305m.

CleanCo owns 1100 megawatts of renewable generation assets, including the pumped storage hydro-electric generator at Wivenhoe Dam, which it took over from state-owned generators Stanwell and CS Energy. It generated 1.2 million megawatt hours between October 2019 and the end of June.

In its annual report tabled in state parliament, CleanCo says demand fell at the start of 2020 with “retail, commercial and industrial loads affected by COVID-19 related restrictions, partially offset by increased residential consumption as people stayed home during the initial phases of the pandemic … COVID-19 impacts have exacerbated ongoing reductions in Queensland’s daytime demand due to increasing penetration of rooftop photovoltaic. Daytime demand decreased 250MW on average between FY19 and FY20.”

CleanCo said its activities had increased supply to the market and driven down prices for customers, helped along by falling gas prices and plunging consumer ­demand. A spokeswoman said Queenslanders had the lowest wholesale electricity prices in the national energy market.

Currently, renewables make up about 20 per cent of the state’s ­energy mix, and the government is aiming for 50 per cent by 2030.

Despite CleanCo failing to meet its financial targets, Energy Minister Mick de Brenni said he had “full confidence” in the model of “publicly owned electricity generation to deliver cheaper, cleaner energy for Queenslanders”.

“We are successfully seeing costs to households and business fall year on year,” he said.

“Despite all the challenges COVID-19 has posed globally, this year we were able to deliver every Queensland energy user $250 back into their electricity account; this would not have happened without the hard work of Queensland’s publicly owned electricity companies like CleanCo.

“Queensland is well on the way to meeting its 50 per cent renew­ables target by 2030.”