August 29, 2024
As Australian companies release the details of their 2023-24 financial year performance, one of the main stories to emerge has been the extraordinary profits enjoyed by the major energy generators and retailers.
Origin and AGL both reported record annual profits, drawing accusations of profiteering from consumer advocates. Origin recorded a statutory profit of $1.4 billion, up from the previous year’s similarly huge $1.1 billion. Meanwhile, AGL’s underlying net profit of $812 million is almost triple their 2023 financial year result.
Both were beneficiaries of the Government’s domestic coal price cap scheme which concluded in June this year, with significantly reduced fuel costs incentivising them to run coal generators like Bayswater and Eraring more than last year. Coupled with the closure of Liddell and higher generation at Loy Yang, AGL’s coal fuel costs were down 7.9 per cent per megawatt hour to $1.80/MWh. Origin chose to increase its coal stockpile before the conclusion of the price caps, devoting $46 million to that endeavour.
As the major players in Australia’s rapidly changing electricity system, Origin and AGL have a responsibility to workers and consumers to play a constructive role in the transition. The decisions they make about the operation and closure of their coal-fired power stations have significant impacts on local communities, alongside major implications for energy supply and security on the Eastern seaboard. It is worth noting that, while raking in these handsome profits, Origin dragged its feet in negotiations with the NSW Government around the extension of Eraring and the stability of its contracts with its traditional coal supplier Centennial. Instead of building up one billion dollars in profits, Origin may have considered making a contribution to a more orderly transition on its own accord, extending Eraring without asking the state government for potential compensation for losses, and supporting the jobs of miners at Myuna and Mandalong.
EnergyAustralia, which is a subsidiary of Hong Kong-listed company CLP Group, recorded half-year earnings of $122 million in the six months to June. This continues the gentailer’s solid 2023 calendar year performance, which saw the company earn $444 million pre-tax, turning around a 2022 loss.