Queensland’s Coal and Gas Plant Profitability Plummets
February 4 2021: Queensland’s coal and gas plant profitability plummets
Findings of a new report released today from the Queensland Audit Office demonstrate why the Queensland Government urgently needs to plan for the transition of the energy system, with profits from state-owned energy companies plummeting $1.5 billion in 2019-20.
Off the back of the results, community group Solar Citizens say the Queensland Government needs to plan for early coal retirement as the influx of cheaper renewable energy means a decline in coal profits is inevitable.
“Coal stations aren’t very flexible, so when Queensland’s hundreds of thousands of solar rooftops are generating cheap energy during the day, they can lose a lot of money,” said Solar Citizens’ Queensland Campaigner, Stephanie Gray.
“Solar and wind projects are the cheapest form of new energy. The transition is here and it’s now being driven by price.
“It’s absurd that the Queensland Government is still expecting coal plants that are bleeding money to run until the end of their technical lives. Taxpayers will be funding polluting coal stations to stay online decades after they’re profitable.
“It’s in the best interest of Queenslanders if the state and federal governments plan for a rapid transition to clean energy. They need to be upfront with the community and provide certainty for workers who will be affected by inevitable generator closures."
Key report findings:
In 2019–20, the energy entities recorded a combined profit of $204 million. This was a decrease of $1.5 billion (88 per cent) from the previous year. This profit reduction was largely due to the generators (CleanCo, CS Energy and Stanwell), because of lower electricity prices.
Due to coal and gas generators being able to recover less than their current value, generators wrote down (decreased) the value of their power stations as follows:
Stanwell: $720 million (19 per cent of total assets)
CS Energy: $353 million (15 per cent of total assets)
Queensland’s wholesale electricity price fell on average by $27 per megawatt hour (33 per cent) compared to 2018–19. This is largely due to more cheap solar and wind energy coming online.