2005 ANNUAL REPORT 2006 CONTENTS HIGHLIGHTS AND CHALLENGES 2005/2006 IN PERSPECTIVE
2005/2006 in Perspective 1 S ENERGY IS A QUEENSLAND GOVERNMENT-OWNED electricity gen- CS Energy Locations 2 erator with more than 500 employees and a generating About CS Energy 3 Ccapacity of 2,460 megawatts. It meets approximately Business Strategy 4 30 per cent of Queensland’s electricity demand and uses a Chairman’s Review 6 diverse mix of energy sources including coal, natural gas, coal Chief Executive’s Review 9 seam methane and landfi ll gas. 1 Operations 10 The Company’s vision is to be the leading generator in the 2 Major Projects 18 Australian electricity market. CS Energy’s 10-year plan is the 3 New Business 22 vehicle for achieving this vision and was developed following 4 Organisational Development 24 a signifi cant review of the Company’s business strategy in 5 Corporate Governance 28 2004/2005. This annual report is the second to outline pro- Directors’ Profi les 32 gress against the 10-year plan and covers the 2005/2006 Senior Management Team Profi les 34 fi nancial year. Statement of Corporate Intent 36 Financial Report 37 Glossary 89
PEOPLE ROLLED OUT A NEW LEADERSHIP FRAMEWORK AND REFRESHED PERFORMANCE REVIEW SYSTEM, ROLE PURPOSE STATEMENTS AND COMPLEMENTARY TRAINING.
• Appointed Bill Pike as Site Man- ager of Kogan Creek Power Station and established his operational team following a national and in- ternational recruitment drive. • Introduced the Safe Move inter- nal campaign to increase safety awareness. • Appointed Paul Hyslop as General Manager of New Business.
Lost time injury frequency rate Employee numbers 5.1 4.6 11.3 530 461 467 2005/06 2004/05 2003/04 2005/06 2004/05 2003/04
Apprentice, Trainee Leadership Principles training and Graduate numbers 460 22 0 41 39 29 2005/06 2004/05 2003/04 2005/06 2004/05 2003/04
Image (above) Stephanie Huhs, Water Treatment Technician.
Scope and Purpose of the Annual Report The Annual Report is written to provide information to CS Energy Limited’s (CS Energy’s) stakeholders including Ministerial shareholders, customers, community, partners, unions, industry, employees, suppliers, environmental groups and the media. The report is also available on-line at (www.csenergy.com.au). HIGHLIGHTS AND CHALLENGES 2005/2006 IN PERSPECTIVE
FINANCE
Profi t after tax $000 RETURNED A $56.5 MILLION 56,468 40,630* 30,397 2005/06 2004/05 2003/04 NET PROFIT AFTER TAX FOR 2005/2006—AN INCREASE OF Return on productive assets % 39 PER CENT FROM 2004/2005. 7.3 5.2 5.3 2005/06 2004/05 2003/04 • Generated 13,110 gigawatt hours Image (left) (GWh) of electricity for 2005/2006 Che Caldwell, Graduate Engineer. and produced total revenue of Qld average pool price $/MWh $528 million. 28.12 28.99 28.19 • Created approximately half of the 2005/06 2004/05 2003/04 total Gas Electricity Certifi cates for Queensland from the Company’s Gearing % gas-fi red plant. 39.3 40.9 30.6 • Received an equity injection of 2005/06 2004/05 2003/04 $250 million from the Queensland Government in June 2006, further strengthening CS Energy’s balance sheet.
* Restated to refl ect International Finance Reporting Standards.
OPERATIONS • Applied for Federal Government and Image (left) industry funding to demonstrate the Natasha Butler, Total energy sold GWh Electrician. feasibility of oxy-fi ring clean coal 13,110 12,494 12,429 technology, in conjunction with eight 2005/06 2004/05 2003/04 partners. • Achieved three years and fi ve months without a lost time injury Reliability % at Mica Creek Power Station by 30 93.4 94.74 95 June 2006. 2005/06 2004/05 2003/04 • Signed a Joint Development Agreement with Australian Gas Light Company to investigate the upgrading of Mica Creek Power Station. Greenhouse intensity tCO e/GWhso • Spent $41 million on overhauls, including Australian fi rst overhauls 2 851 855 899 of an Alstom GT26 gas turbine at Swanbank E and a supercritical 2005/06 2004/05 2003/04 coal-fi red boiler at Callide C.
Signifi cant PROGRESSED THE $1.2 BILLION environmental incidents 0 00 750 MEGAWATT 2005/06 2004/05 2003/04 KOGAN CREEK POWER PROJECT TO ALMOST 87 PER CENT COMPLETE AT YEAR-END.
1 CS ENERGY LOCATIONS
Key
1 Mica Creek Power Station, Mount Isa 2 Callide Power Station, Biloela 3 Kogan Creek Power Station, Chinchilla 4 Swanbank Power Station, Ipswich
CURRENT OPERATIONS (AT 30 JUNE 2006)
Plant Fuel Total capacity CS Energy owned (MW) capacity (MW)
In Operation Swanbank Swanbank B Coal-fi red 480 480 Swanbank E Gas-fi red3 385 385 Callide Callide A1 Coal-fi red 120 120 Callide B Coal-fi red 700 700 Callide C Coal-fi red 900 450 Mica Creek Mica Creek A (Units 1,2,3,4) Gas-fi red 132 132 Mica Creek A (Units 5,6,7) Gas-fi red3 103 103 Mica Creek B Gas-fi red3 35 35 Mica Creek C Gas-fi red3 55 55
Under Construction Kogan Creek Power Project Kogan Creek2 Coal-fi red 750 750
Total capacity 3,660 3,210
1 Callide A was placed in storage in December 2001 2 Kogan Creek Power Project is due for commissioning in September 2007 3 Combined cycle
2 ABOUT CS ENERGY
S ENERGY’S MISSION IS TO develop the Company into a large, low cost, multi-fuel generator, operating across the National Electricity Market. Our long-term vision is to be the leading generator in the CAustralian energy market. To achieve this, we are developing the skills of our people, providing the technology and systems to support their work and fostering a corporate environment with six key values: safety, commercial approach, environmental responsibility, teamwork and mutual trust, innovation and creativity, and integrity.
CORPORATE VALUES
Image (centre) Scott Walker, SAFETY COMMERCIAL Mechanical Engineer. APPROACH We will operate in a manner that does not harm our Build value for our people or our plant. shareholders, whilst striving to be the partner of choice in our commercial arrangements.
Image (left) Leonie Sandell, ENVIRONMENTAL Administration Trainee RESPONSIBILITY Brad Jones, Overhaul Coordinator. Take a socially responsible approach to managing the Image (right) impact of our operations on Simon Dunlop, the environment. Mechanical Fitter.
Image (centre) Diane Everson, TEAMWORK AND INNOVATION Environment and MUTUAL AND CREATIVITY Chemical Offi cer. TRUST Develop an environment in which innovation is Work constructively encouraged and lessons are together, respecting the learnt without recrimination. unique backgrounds and skills of CS Energy staff.
Image (left) Rachel Hoffmann, INTEGRITY Electrical Apprentice.
Maintain the highest ethical Image (right) standards in all of our Brian Pollock, relationships. Production Control Offi cer.
3 BUSINESS STRATEGY
S ENERGY’S AMBITION IS TO BE a signifi cant multi-fuelled electricity generator in the National Electricity Market by 2014. During 2005/2006, CS Energy continued implementing its 10-year plan to drive Cthe Company forward. Image (right) Regular condition monitoring, such as Fitter Con Constantinou’s check of the C2 cooling tower fan at Mica Creek, is an important part of CS Energy’s maintenance approach.
Key (below right)
O: Outcomes 2005/2006 P: Plans 2006/2007
STRATEGIES OUTCOMES 2005/2006 AND PLANS 2006/2007
THE BUSINESS IS SAFETY Ensure no one is injured O: Developed safety action plan for Kogan Creek Power Pro- PEOPLE... at a CS Energy work site. ject, introduced safety survey to track safety leadership and rolled out new safety awareness campaign to all sites. P: Develop safety action plans for all sites, roll out high visibility and fl ame retardant clothing to operations sites, introduce a Chairman’s reward program for safety milestones and start random drug and alcohol testing at all sites. STRUCTURE Systems must em- O: Implemented new organisational structure; enhanced HR power and support staff to achieve systems for feedback, performance review and career dev- business objectives. elopment; and started developing role purpose statements for all staff. P: Bed down performance review system, introduce document management system, fi nalise procurement review and im- plement changes, and conduct ongoing improvements to ensure the structure supports the organisation. LEADERSHIP Leadership must O: ‘Leadership Principles’ training delivered to all staff, pre- be effective at all levels. dominantly by CS Energy leaders; and started auditing impact of Leadership Principles on CS Energy’s business outcomes. P: Induct new staff in Leadership Principles, conduct second round of the training for leaders, and respond to outcomes of audit into the effectiveness of the program. TRAINING Industry and Company O: New Kogan Creek Power Station Team appointed and resource pools must be deep commenced training and Graduate Development program enough to support CS Energy’s expanded. growth ambitions. P: Complete tailored operator and frontline management train- ing programs for Kogan Creek and other site staff.
4 BUSINESS STRATEGY
STRATEGIES OUTCOMES 2005/2006 AND PLANS 2006/2007 MAINTENANCE Maintenance O: Revised Maintenance Process Model, developed Corporate ...SECURING must be effective and timely to Asset Management Framework and formed the Portfolio Ser- FOUNDATIONS... maximise value from the portfolio. vices team to lead overhauls and other signifi cant projects. P: Complete scoping work for Callide B mid-life refi t, apply asset management framework to Kogan Creek and implement at operational sites, complete building Portfolio Services team. AVAILABILITY The market re- O: Focused on combustion and coal quality issues at Callide wards production, not capacity, so C to maximise availability, conducted overhauls at Swanbank E CS Energy must maximise the and Callide C and applied lessons learned to Kogan A. availability of its plant. P: Achieve improved availability from Callide C and complete asset and plant strategies for all power stations. FUEL MANAGEMENT Upstream O: Appointed General Manager New Business, developed integration into fuel resources will portfolio fuel strategy, and began earthworks at Kogan Mine. strengthen the market advantages P: Finish building New Business team, progress Kogan Mine, inherent in a portfolio operation. and continue to secure sources of competitively priced gas.
WATER Water use must be care- O: Completed Stag Creek Pipeline and participated in Western fully managed, to satisfy economic Corridor Recycled Water Scheme. and community needs. P: Start up Kogan A as an air-cooled unit, and prepare Swanbank Power Station to receive recycled water.
FINANCIAL STRENGTH Financial O: Received equity injection of $250 million in June 2006 capacity must support growth as- that further strengthened CS Energy’s balance sheet. ...FOR GENERATIONS pirations. P: Examine fi nance options to support future projects. TO COME ENVIRONMENT CS Energy must O: Completed oxy-fi ring feasibility study, applied for Federal manage its business to minimise Government funding and signed Memorandum of Understanding its impact on the environment. with partners; complied will all environmental regulations, and maintained ISO 14001 certifi cation at Swanbank and Corporate Offi ce. P: Pending Low Emissions Technology Demonstration Fund funding, execute joint venture agreement between oxy-fi ring partners and complete detailed design to enable construction in April 2007; and arrange external audits of Callide and Mica Creek power stations to maintain ISO 14001 certifi cation. COMMUNITY CS Energy must be O: Developed community relations plans for all sites to re- considered a welcome corporate focus sponsorship activites and maintain meaningful com- neighbour. munity contributions, and passed audit of noise mitigation effectiveness at Callide. P: Maintain communication channels with the community on power station operations and new projects such as oxy-fi ring and Kogan A. GROWTH CS Energy will be a O: Undertook feasibility work on second unit at Kogan Creek multi-fuelled generator with scale and additional gas-fi red generation at Swanbank. and diversity across the NEM. P: Complete joint feasibility study with Australian Gas Light Company into expansion of Mica Creek Power Station.
5 CHAIRMAN’S REVIEW
HIS YEAR, CS ENERGY MADE SIGNIFICANT progress Australian Gas Light Company to investigate the up- in positioning the Company for a profi table grading of Mica Creek Power Station. Work has now T future while responding to the challenges of commenced to gauge customer expansion plans the present, such as low pool prices and several and future gas supply options to determine the unplanned outages. feasibility and scale of the upgrade of Mica Creek. Image (right) CS Energy delivered a strong Another highlight of the year was Stephen Lonie, Chairman. fi nancial performance in 2005/2006, the commencement of detailed en- recording a profi t after tax of $56.5 gineering and design work for the million, its best result in four years oxy-fi ring clean coal project, following and an increase of 39 per cent over promising results from the feasibility the 2004/2005 result. The advan- study. CS Energy also applied to the tage of CS Energy’s diverse portfolio Federal Government’s Low Emissions of generating assets is visible in this Technology Demonstration Fund for result. While there were continuing fi nancial support for demonstrating reliability issues at Callide C, CS Energy’s other the technology, as part of stage two. Their decision stations increased generation to their customers. is expected in 2006/2007 and, if successful, will Generation at Swanbank E and Mica Creek played allow CS Energy, and its project partners, to progress an important role in CS Energy’s overall profi t this important work to reduce greenhouse gas result, including capturing the benefi ts of the emissions from coal-fi red electricity generation. Queensland Government’s 13 per cent Gas Elec- Refl ecting the growth of Queensland’s domestic tricity Certifi cates Scheme. gas industry, Swanbank E took delivery of fi rst gas Image (far right) The 750 megawatt Kogan Creek Power Project, from Tipperary Oil and Gas in November 2005, from The Kogan Creek under construction near Chinchilla, drove a large Arrow Energy’s Kogan North coal seam gas project boiler house reached its full height of amount of activity at CS Energy during the year. in January 2006 and Queensland Gas Company’s 75 metres in the By year-end, the project was almost 87 per cent Berwyndale South gas fi eld in April 2006. Planning fi rst quarter of 2005/2006. complete and its operational team was appointed for a second gas-fi red plant at Swanbank also and preparing to move to site in October 2006. progressed during the year, with the completion of Kogan Creek is a critical element in securing the feasibility work into plant options and demolition Company’s future, due to its effi cient design and continuing of the old Swanbank A power station. location adjacent to signifi cant coal reserves Looking ahead, CS Energy will continue with its owned by CS Energy. Feasibility studies into a plans to improve the performance, and expansion second unit at Kogan Creek were also undertaken of, its generating assets. The Company’s immediate during the year. focus over the next year will be the completion of CS Energy continued its contribution to the Kogan Creek in readiness for commencement of development of the Chinchilla region through its commercial operations in September 2007. community benefi ts trust, jointly managed with the In closing, I would like to acknowledge the efforts Chinchilla Shire Council. This year, over $122,000 of my fellow Directors and all of my colleagues at was distributed to community groups for a range CS Energy. We are in a challenging but essential of local improvement projects. This trust has growth phase of the Company and I look forward to proven successful in empowering local residents seeing the fruition of our combined efforts in the to develop practical projects that benefi t the wider coming years. community. As the sole supplier of power to the North West Minerals Province, CS Energy’s Mica Creek Power Station plays an important role in the Company’s Stephen Lonie future growth strategies. During the year, CS Energy Chairman signed a Joint Development Agreement with the
6 AT YEAR-END, KOGAN CREEK POWER PROJECT WAS ALMOST 87 PER CENT COMPLETE. CHIEF EXECUTIVE’S REVIEW
14 50 VIC QLD NSW
12 45
10 40
8 35
6 30
4 25
2 20
2001/02 2002/03 2003/04 2004/05 2005/06 2001/02 2002/03 2003/04 2004/05 2005/06
Lost time injury frequency rate Time weighted average pool price by region ($/MWh)
13,500 960
13,000 940
12,500 920
12,000 900 11,500
880 11,000
860 10,500
10,000 840
2001/02 2002/03 2003/04 2004/05 2005/06 2001/02 2002/03 2003/04 2004/05 2005/06
Energy sold (GWh) Greenhouse intensity (tC02e/GWh sent out)
84% 16%
98
Generating capacity by fuel source 2001/2002 (MW) 96 Coal Gas and renewables 94
92
90
74.4% 25.6% 88
86 Generating capacity by fuel source 2005/2006 (MW) 84 Coal Gas and renewables 82
80
2001/02 2002/03 2003/04 2004/05 2005/06
Reliability (%) For all CS Energy plant
8 CHIEF EXECUTIVE’S REVIEW
HE 2005/2006 FINANCIAL YEAR was a period of As work progressed on CS Energy’s oxy-fi ring intense activity at CS Energy as the Company clean coal project this year, its profi le also increased T consolidated its new organisational structure, as national debate about Australia’s future energy managed major planned maintenance outages at all options occupied the media. The benefi ts of oxy- sites and implemented a leadership framework to fi ring technology are its near-zero greenhouse gas increase organisational effectiveness. emissions and ability to be retrofi tted Image (left) Since its inception in 1997, CS to existing coal-fi red power stations. Mark Chatfi eld, Chief Executive. Energy has pursued a growth strategy Turning this project into a reality is to retain its edge in an increasingly essential to securing a sustainable competitive electricity market. This future for coal-fi red electricity. competitiveness will be tested into This year, CS Energy placed a high the future as the retail electricity sec- priority on ‘people work’ as a critical tor in Queensland is restructured in element in our business success. 2006/2007. The Company’s new organisational The Company’s profi t performance this year was structure, which separates operations and main- strong and efforts to rectify plant issues affecting tenance, allowed greater specialisation in each area Callide C’s reliability should place CS Energy on and proved successful during the busy overhaul a fi rm footing for an even better result next year. calendar. Rollout of the Leadership Principles Tube leaks, coal quality and furnace fouling issues framework provided staff with the support they affected the performance of Callide C during the needed to respond to performance targets. Look- last 18 months. Two planned overhauls this year ing ahead, succession planning and further train- included plant improvements to address these ing and leadership development activities will be issues and should result in improved performance important people work priorities. from C station in 2006/2007. The buoyant economic environment in CS Energy’s safety performance at its oper- Queensland presented numerous challenges in ational sites improved on last year, with only fi ve 2005/2006 as industries competed to attract lost time injuries (LTIs) in 2005/2006. Mica Creek and retain skilled staff. Resource companies, Power Station was again the best safety performer, experiencing high product prices, are increasingly achieving three years and fi ve months without an targeting the competent staff in our industry, where LTI by year-end. We also introduced a new safety low electricity prices limit our ability to compete awareness campaign and a grants program to on dollar terms in the labour market. However, site safety committees to achieve a more con- the Company continues to offer its people an sistent performance across the Company. Con- attractive and safe working environment in which tractor safety performance remains a challenge their achievements are valued and recognised. though. At the Kogan Creek Power Project con- 2006/2007 promises to be an exciting year, struction site, there were nine LTIs during the with the Kogan Creek commissioning, moving the year. CS Energy actively managed this issue with oxy-fi ring project to demonstration stage and contractors Siemens-Hitachi and is hopeful its improving Callide C’s performance emerging as new safety initiatives will bring an improved safety CS Energy’s major priorities. The Company’s work performance in the contractor workforce. with Australian Gas Light Company on a potential An Australian fi rst overhaul at the gas-fi red upgrade of Mica Creek Power Station will also Swanbank E Power Station in April 2006 generated occupy many staff. In closing, I would like to thank much interest in the industry and resulted in the all staff for their efforts over the past year and I station moving from six to seven days a week look forward to another challenging year delivering operation. The reliability of Swanbank E, and the reliable, competitively priced electricity. Company’s other gas-fi red power station at Mica Creek, continued to enhance CS Energy’s revenue from the Queensland Government’s 13 per cent Gas Electricity Scheme. Mark Chatfi eld Chief Executive
9 OPERATIONS
PROGRESS AND LOOKING FORWARD
2005 2006 • Successfully completed overhauls at all three power stations. • Mica Creek achieved more than three years without a lost time injury. 2006 1 2007 • Scope mid-life refi t of Callide B and achieve improved reliability from Callide C. • Conduct six overhauls at Mica Creek. • Finish building Portfolio Services and complete asset and plant strategies for all sites.
POWER STATION PERFORMANCE
CALLIDE POWER STATION In 2005/2006, Callide Power Station completed following these major overhauls.There were no lost two major overhauls, welcomed the completion of time injuries (LTIs) during the overhauls and only a major water-saving initiative and began a mid- two LTIs during the year on site. life review of two of its units. The Callide complex Callide B performed solidly in 2005/2006, has a capacity of 1720 megawatts and comprises recording a reliability rate of 96.5 per cent. As Callide A (which is in storage for future use in Callide B was commissioned in 1988, a mid-life CS Energy’s oxy-fi ring clean coal project), Callide review of the station commenced to ensure it will B and Callide C. CS Energy has 100 per cent run economically and reliably for the remainder of ownership of A and B stations and owns C station its commercial life. Work began on assessing the in a 50/50 joint venture with InterGen Australia. refurbishments needed and these will be scheduled The overhaul of unit C4 in September 2005 was in overhauls between 2007 and 2010. the fi rst major overhaul of a supercritical boiler in The completion of the water-saving Stag Creek Australia and was followed by an overhaul of C3 in pipeline in December 2005 marked a major mile- May-June 2006. In addition to routine maintenance stone for Callide Power Station’s water management. and repair work, the overhauls included special The 15-kilometre pipeline carries water to Callide projects to address boiler-fouling issues that had Dam and reduces natural water losses, saving affected plant reliability. Furnace cleaning systems approximately 3,000 megalitres per year. CS Energy and modifi ed burners were installed on both units jointly funded the project with InterGen Australia and to improve reliability and enable the plant to sup- bulk water provider SunWater oversaw its design port increased generating loads. Modifi cations and construction. were also made to the submerged chain conveyor Callide conducted civil improvement works to on C3 to reduce ash spillage. improve its ash dam management and began Boiler tube leaks prompted a forced outage scoping rehabilitation trials for the ash dam area. at C4 just as the C3 overhaul was to start in May A review was also conducted of site oil manage- 2006. In response, areas of the C4 waterwall were ment systems to comply with the revised AS1940 replaced and by mid-June 2006 both units were standard. back on line. A total of 115,518 hours were worked Callide ran its second annual World Environ- on the two C station overhauls by Callide staff and ment Day staff competition, which proved so popu- 550 contractors who assisted on site. Callide C is lar it was expanded to all CS Energy sites. The expected to have improved reliability in 2006/2007 competition encourages staff to suggest ideas for
10 OPERATIONS
improving the company’s environmental perform- Mica Creek’s maintenance activities included ance and provides energy or water-saving household an overhaul of the C Station gas and steam equipment as prizes. The winning entry from the fi rst turbines and a combustor inspection of unit A7 in Callide competition was put into practice on site early 2005/2006. Following a residual vibration during the year and involved design improvements issue on unit C2 after the overhaul, CS Energy to coal-pulverising mills. lodged a latent defect claim with the original Results from noise monitoring adjacent to Callide equipment manufacturer. The claim was settled that found the power station’s noise impact was and repairs are scheduled for August 2006. relatively low were endorsed by the Environmental Other units overhauled were A1 in August 2005, Protection Authority. Callide A4 from October to December Image (left) also presented the results 2005 and B station, which Modifi cations to the angle of the at the fi rst of a planned underwent a combustor in- submerged chain series of community infor- spection and generator stator conveyor at Callide C Station have helped mation sessions designed to rewind in April 2006. The B improve reliability. increase links with the local station rewind experienced community. some delays and the unit is During 2006/2007, Callide expected to be back online in will conduct a minor overhaul early 2006/2007. of unit B2 in April 2007, CS Northwest, the CS closely monitor Callide C’s Energy subsidiary that oper- reliability, continue prevent- ates Mica Creek Power ative maintenance, select Station, became a licensed a ‘frontline environmental asbestos removal company offi cer’ in each workgroup and complete recertifi - under the Workplace Health and Safety Act (1995) cation to the revised ISO 14001 standard. during the year, in response to a recent law change. Like all old Queensland power stations, MICA CREEK Mica Creek contains some Image (left) POWER STATION asbestos insulation, which Environment Coordinator Wayne A major safety milestone, six is progressively removed dur- Estreich monitors overhauls and the announce- ing overhauls. Improvements improvements to Mica Creek’s bulk acid ment of future expansion were also made to the bulk handling system. plans were the highlights of acid handling system at Mica a busy year for Mica Creek Creek to improve safety and Power Station. Mica Creek is reduce spillage risks. a gas-fi red power station com- Mica Creek provided ap- prising 10 units of various prenticeships and trainee- ages and sizes and is capa- ships that offered real skills ble of generating 325 MW development opportunities of electricity. Despite some and the chance to learn from issues with two units during experienced mentors. This the year, the power station continued to be a approach was rewarded when Mica Creek won the consistent performer in CS Energy’s portfolio and Large Host Trainer of the Year Award at the Migate recorded an overall reliability fi gure of 99.49 per Training Awards in Mount Isa in late 2005. cent in 2005/2006. Mica Creek Power Station used its sponsorship In January 2006, Mica Creek Power Station activities in 2005/2006 to increase the profi le of celebrated three years without a LTI and the 45th the power station in the Mount Isa community and anniversary of the offi cial opening of the station in position CS Energy as an employer of choice in an 1961. By year-end, the power station was nearing increasingly competitive jobs market. Sponsored three and a half years without a LTI.
11 OPERATIONS
events such as the Mount Isa Business Awards year of reliable electricity supply to the national proved successful in meeting these twin aims. grid, recording an overall reliability rate of 96.9 In May 2006, CS Energy joined forces with per cent. In safety reporting, there were three lost Australian Gas Light Company (AGL) in a Joint time injuries at Swanbank during the year. Development Agreement (JDA) to investigate up- As south-east Queensland residents reduced grading Mica Creek. Under the terms of the JDA, their water usage in response to drought conditions, CS Energy will oversee a redesign and repowering Swanbank investigated using recycled water from study and will operate the upgraded power station, the planned Western Corridor Recycled Water which is planned to be expanded by 70 to 100 MW Scheme. Swanbank has also decreased its water by 2010. AGL will take the lead role in procuring usage by 22 per cent over the last fi ve years. A and transporting the additional long-term gas signifi cant proportion of this saving was due to supply needed for the expansion. replacing the old Swanbank A plant with the gas- Priorities for 2006/2007 include six scheduled fi red Swanbank E in 2002. Other projects that have overhauls and modifying Mica Creek’s environmen- increased Swanbank’s water effi ciency include im- tal management system to meet new ISO 14001 provements to the site sewerage system and reuse requirements. of stormwater collected from E station. Swanbank’s environmental management sys- Image (right) SWANBANK POWER STATION tem was recertifi ed to the ISO 14001 standard in Over 100 staff and Swanbank Power Station was the scene of an May 2006 following an external audit. The station contractors worked on the Swanbank E Australian fi rst in 2005/2006 when the 385 also reviewed future ash dam storage and at year- overhaul in April 2006. megawatt, gas-fi red E station underwent its fi rst end was assessing three options involving both on major overhaul since commissioning in 2002. The and off-site storage. plant is powered by an Alstom GT26 gas turbine— Site environment offi cers responded immedi- the only turbine of its type in Australia. Over 100 ately to the presence of dead eels in Swanbank staff and contractors worked on the overhaul, Lake in March 2006. Subsequent independent including 30 Swiss trades and engineering staff laboratory tests found the eel deaths were un- from Alstom Power Switzerland. The overhaul was related to the power station’s operations. Further successfully completed in May 2006 after 70,000 investigations found similar eel deaths had oc- hours were worked. Following the overhaul, curred in Victoria and New South Wales. Swanbank E’s operation increased from six to Swanbank maintains a close link with the local seven days a week and it has an improved plant community through a joint Community Reference effi ciency that equates to taking 2,500 cars off Group (CRG) with neighbour Thiess Services. The the road each year. Swanbank E’s overall reliability CRG has been operating for six years and provides rate for the year was 94.3 per cent. valuable feedback on the station’s operations The Swanbank site also includes the coal-fi red and potential community issues. The station also Swanbank B power station, which has a capacity sponsored local events in 2005/2006. More in- of 480MW, and the retired Swanbank A plant that formation on these and other CS Energy community is being demolished. Two successful overhauls activity can be found on page 26 of this report. at B Station were completed on units 3 and 4 During 2006/2007, Swanbank will focus on in 2005/2006. The B3 overhaul in September safety, prepare to receive recycled water, overhaul 2005 involved maintenance on all parts of the B1 and conduct general maintenance of other plant, while the B4 overhaul in May 2006 included units at the site. For information on the Swanbank tests for condenser leaks and refurbishment of a A demolition project, please see page 20 of feedwater heater. Swanbank B provided another this report.
12 MAINTENANCE CREWS WORKED 70,000 HOURS ON THE SWANBANK E OVERHAUL. OPERATIONS
CORPORATE PERFORMANCE
MARKET PERFORMANCE CS Energy derives its revenue from the sale of 13 per cent of the electricity they sell in Queensland. electricity into the National Electricity Market (NEM) CS Energy sold Queensland’s fi rst GEC in January and long-term electricity supply contracts at its 2006 and by fi nancial year-end had created approx- Mica Creek Power Station in Mount Isa. imately half of the GECs created in Queensland. In 2005/2006, continuing low NEM pool The market outlook is for pool prices to remain prices and lower than forecast generation placed below sustainable levels in the short term, but signifi cant pressure on CS Energy’s revenue forecast growth in demand will deliver improved stream. The Queensland time weighted average market conditions in the medium term and profi t- pool price for electricity in 2005/2006 was able opportunities for CS Energy. $28.12/MWh, compared with $28.99 during In off-grid activities, Mica Creek Power Station 2004/2005. CS Energy’s electricity revenue was in northwest Queensland experienced steady de- enhanced by its hedging activities, contributing to mand during 2005/2006 and continued to make the strong overall profi t result. a valuable contribution to CS Energy’s profi t. During the year, CS Energy made a large con- This demand is expected to increase in line with tribution to the Queensland Government’s 13 per continued mining development in the region. In cent Gas Electricity Certifi cates Scheme (GECS), response, CS Energy joined with Australian Gas through its Swanbank E and Mica Creek gas-fi red Light Company in May 2006 to investigate ex- power stations. The scheme requires electricity panding Mica Creek’s capacity by 70 to 100 retailers to purchase Gas Electricity Certifi cates for megawatts by 2010.
FINANCIAL HIGHLIGHTS
2005/06 2004/05* 2003/04 2002/03 2001/02
PAT $000 56,468 40,680 30,397 39,716 60,692 ROPA % 7.3 5.2 5.3 6.8 9.5 Gearing % 39.3 40.9 30.6 52.7 55.1 Assets $M 2,121 1,734 1,620 1,610 1,663 TWA pool price $/MWh 28.12 28.99 28.19 37.54 35.40 Green energy products $000 23,024 11,133 1,799 0 0 Total electricity sales $000 505,131 456,229 444,314 460,428 476,137 Costs (excl interest) $000 434,011 398,529 394,860 380,536 378,759 Dividends payable $000 40,170 29,151 28,877 37,730 51,657 Capital investment in power stations $000 490,795 248,696 46,655 61,813 214,289
* Figures restated to International Finance Reporting Standards.
14 OPERATIONS
PORTFOLIO SERVICES OPERATIONS SUPPORT Portfolio Services links technical staff across Operations Support works across CS Energy CS Energy’s sites in engineering, environment, to ensure systems and processes support the science, and asset and overhaul management. Company’s business objectives. During 2005/ The Portfolio Services team is based in Brisbane 2006 the unit focused on improving CS Energy’s corporate offi ce and works in partnership with maintenance, procurement, reporting and operator these site technical staff. training systems. Portfolio Services provides a coordinated ap- Reliability is the cornerstone of CS Energy’s proach to managing its asset portfolio and fostering performance and one of the best lead indicators technical excellence. The team is responsible for for reliability is maintenance effectiveness. Fol- long-term asset management lowing an external mainten- Image (left) Portfolio Services and responding to plant per- ance audit in April 2005, helped manage boiler formance issues. This team Operations Support estab- waterwall repairs at aims to deliver improved re- lished an operations and Callide C Station. liability and commercial per- maintenance group to facili- formance at CS Energy power tate a coordinated approach stations. to maintenance improvement In 2005/2006, Portfolio and ensure the Company Services introduced a more maintains best practice in structured approach to over- this area. haul planning and implemen- A Strategic Sourcing Pro- tation. The team successfully ject began reviewing 80 per applied this approach to over- cent of CS Energy’s pur- hauls at Swanbank E in April chasing and is anticipated to and Callide C in May–June. deliver signifi cant savings on Portfolio Services initiated the Company’s total spending a mid-life review of Callide B on materials and services. to identify the refurbishments Working with end users, necessary to keep the power Operations Support review- station running economically ed CS Energy’s performance and reliably for the remainder reporting during the year, of its commercial life. Areas examining its ability to sup- of the plant needing investi- port decision making at all gation have been identifi ed and a project is underway organisational levels. A new system, to be rolled to determine the scope of refurbishments required. out during 2006/2007, includes the measures Repair and refurbishments will be scheduled in that help the organisation identify progress to- overhauls between 2007 and 2010. wards its goals as well as measures staff need to During 2006/2007, Portfolio Services will manage day-to-day operations effectively. continue scoping work for the Callide B mid-life refi t, develop an asset management strategy and fi nalise technical support arrangements for Kogan Creek Power Station.
15 OPERATIONS
In preparation for the operation of Kogan External audits of Swanbank Power Station Creek Power Station, Operations Support, Human and the Brisbane corporate offi ce in 2005/2006 Resources and site operations staff worked with a resulted in their certifi cation to meet recent specialist supplier to develop an operator training revisions to the ISO 14001 international Environ- Chart (right) package during 2005/2006. ment Management Systems Water consumption intensity (ML/GWhso). Including classroom and on standard. External audits of 2.5 the job training, the fi rst 22 Callide and Mica Creek power In 1997/1998 CS Energy’s water participants commenced the stations are scheduled for consumption intensity 12-month, full-time program 2006/2007. was 2.7ML/GWhso. in June 2006. 2.0 CS Energy’s oxy-fi ring re- During 2006/2007, Oper- search project places it at ations Support will focus on the forefront of clean coal the Company’s people sys- initiatives in Australia and tems, particularly in the 1.5 supports its business objec- areas of workforce and suc- tive to reduce greenhouse cession planning, and pre- gas emissions whilst meeting
pare to assimilate Kogan 2001/02 2002/03 2003/04 2004/05 2005/06 future energy demand. This Creek Power Station into CS project is explained in more Energy’s portfolio. detail in the Major Projects section of this report. The coal-fi red Swanbank B Power Station uses Chart (right) ENVIRONMENTAL landfi ll gas piped from the CS Energy’s PERFORMANCE adjacent Thiess Services Environmental Performance summary CS Energy integrates environ- landfi ll site as a supplemen- for 2005/2006. mental management with its tary fuel, as part of the on- health and safety and risk going ReOrganic Project. In management systems to en- 2005/2006 Swanbank B sure a corporate culture of generated 30 gigawatt hours environmental responsibility of renewable energy from and position the Company landfi ll gas, which equates for a sustainable future. The to taking 1,200 cars off the Company’s environmental road each year. management system is based on the ISO 14001 WATER MANAGEMENT international standard and Water effi ciency has always is assessed through annual been a priority for CS Energy, audits. but drought conditions in In 2005/2006, CS Energy parts of Queensland during continued its approach of the year heightened the providing staff with the sys- Company’s efforts to reduce tems and skills they need water use. The completion of for meeting environmental the Stag Creek Pipeline in requirements, promoting a December 2005 added to culture of accountability and Callide Power Station’s water maintaining open communication with neighbours effi ciency efforts (see page 10 of this report) and and stakeholders. Swanbank Power Station is one of several pro- The CS Energy Environment Policy guides all posed customers of the Queensland Government’s environmental decision-making and work prac- Western Corridor Recycled Water Scheme. tices and is the foundation of the Company’s environmental management system.
16 OPERATIONS
Image (left) Callide Power Station carried out plant and civil improvement works to enhance its ash management.
CS Energy’s other two operating sites also AWARENESS contribute to the Company’s commitment to CS Energy encourages its employees to show improving overall water effi ciency. Since November individual commitment to responsible environmen- 2004, Mica Creek Power Station has provided tal management. Environment and safety risk as- effl uent water for reuse by nearby Xstrata mining sessments are conducted for all relevant tasks on operations, with 380 megalitres provided in site. Regular training, briefi ngs, staff newsletters 2005/2006. The completed Kogan Creek Power and internal events such as World Environment Station near Chinchilla will use dry cooling tech- Day competitions all contribute to increasing nology, resulting in 90 per cent less water use staff awareness of the environment and their than conventional coal-fi red generators. responsibilities. CS Energy is committed to open dialogue with WASTE MANAGEMENT its neighbours. At Swanbank Power Station, a joint At Swanbank and Callide power stations, there community reference group (CRG) with Thiess were ongoing review and upgrades of ash man- Landfi ll Services enables the power station to agement systems during the year. Swanbank inform local residents about environmental and investigated future ash management storage other news at site. In November 2005, Callide options and funded further research into ash dam Power Station held an inaugural community forum rehabilitation. CS Energy also worked with the to provide similar information, while a CRG at Cooperative Research Centre for Coal in Sus- Chinchilla based on the successful Swanbank tainable Development and the Ash Development model entered its second year. Association of Australia to identify further oppor- tunities for using fl y ash. Callide Power Station conducted civil improvement works to enhance ash dam management and began scoping re- habilitation trials for an area of the ash dam. It is intended that all Callide ash will be managed using dense phase technology during 2006/2007.
17 MAJOR PROJECTS
PROGRESS AND LOOKING FORWARD
2005 2006 • Submitted oxy-fi ring clean coal research project for Federal Government funding. • Progressed Kogan Creek Power Project to more than 87 per cent complete. 2006 2 2007 • Conclude detailed design of oxy-fi ring project and move to demonstration phase. • Commission Kogan Creek Power Station. • Complete Swanbank A demolition project.
KOGAN CREEK POWER PROJECT Construction at the Kogan Creek Power Project site each weighing over 100 tonnes, were installed. near Chinchilla reached its peak in 2005/2006. Installation of the remaining boiler pressure parts The year began with site crews standing the fi rst took place over the rest of the year and hydro structural steel and by year-end, construction work testing was scheduled for early July 2006. had transformed the site so much that the boiler The steelworks on the turbine house and air- house and chimney had become local landmarks. cooled condensers were nearing completion at A viewing area was opened nearby to allow the year-end and all major concrete pours had been public to view the site up close. completed, including the 153m chimney wind- Kogan Creek Power Project will be the largest shield that supports a 160m fl ue. Major plant single generating unit in Australia and comprises a components that arrived on site included the 298- 750 megawatt power station, a coal mine, a water tonne generator transformer installed in January supply pipeline and a transmission interconnection 2006 and the 320 tonne generator stator, which to the National Grid. It will operate as a base load arrived on 29 June 2006 and was installed on 3 power station and will generate enough electricity July. All major turbine components also arrived to power almost one million homes. and will be fully installed in the second quarter of A consortium of Siemens and Hitachi is con- 2006/2007. structing the Kogan Creek Power Project on behalf In February 2006, CS Energy appointed Golding of CS Energy and at 30 June 2006, it was almost Contractors to develop and operate the Kogan Coal 87 per cent complete and on target to meet its Mine, which is located four kilometres east of the commercial load date of September 2007. The power station. The mine will provide up to 2.8 million site workforce peaked at 900 in June 2006 and tonnes of black coal annually and be developed over 1.8 million hours had been worked since using modern open cut mining methods. At the construction began in September 2004. end of 2005/2006, site crews had commenced The boilerhouse was the focus of activity for exploratory drilling and stripping of topsoil and over- much of the year as site crews prefabricated boiler burden. Mine equipment had also begun arriving pressure parts on the ground and installed them on site. with large cranes. By the end of the fi rst quarter Kogan Creek Power Station features advanced of 2005/2006 the boiler house reached its full supercritical steam and dry cooling technologies height of 75 metres when the two top steel girders, that will ensure minimum water use and produce
18 MAJOR PROJECTS
Image (left) Kogan Creek Power Project was almost 87 per cent complete by the end of June 2006.
one of the lowest environmental emissions, per The project, carried out through the Cooperative gigawatt hour, of any coal-fi red power station in Research Centre for Coal in Sustainable Develop- Australia. The good quality of Kogan coal elim- ment (CCSD), and under the umbrella of the inates the need for washing, further reducing pres- Australian Coal Association’s COAL21 program, sure on the valuable local water supplies. examined the commercial and operational feasi- A total of nine lost time injuries for 2005/2006 bility of converting one of CS Energy’s 30MW made safety improvement a priority at the Kogan Callide A units. Creek site. CS Energy actively managed this Oxy-fi ring technology has the potential to pro- issue with Siemens Hitachi throughout the year, duce near-zero emissions through a combination which resulted in new initiatives to improve safety of oxygen combustion and carbon dioxide (CO2) performance. These included supervisor training, capture. Coal is normally burned in air, which a safety observation programme, workgroup contains a variety of gases, of which CO2 comprises member signoff on Job Safety Environment Analysis approximately 15 per cent. Firing coal in oxygen sheets and multiple control methods on high risk concentrates the CO2 to around 80 per cent making activities, such as working at heights. In addition, it more economical to capture. Once captured, the the consortium introduced a policy of issuing stop gas can be liquefi ed for geological storage. work notices for safety breaches. Work completed during the year in a pilot 2006/2007 marks the fi nal year of construction oxy-fuel facility in Japan confi rmed the design of Kogan Creek Power Project and the beginning of parameters developed for the proposed oxy-fuel commissioning and transition activities in readiness demonstration plant, including the improved com- for commercial operation in September 2007. bustibility of coal and signifi cant reduction in other emissions such as oxides of nitrogen and CLEAN COAL RESEARCH oxides of sulfur. Studies conducted through the CS Energy reinforced its position at the forefront Cooperative Research Centre for Greenhouse Gas of Australia’s clean coal research during 2005/ Technologies (CO2CRC) identifi ed and assessed 2006. The Company completed a feasibility study underground sandstone formations within 350 into the potential for a combination of oxy-fi ring and km of Callide, which could potentially store CO2 carbon capture and storage to reduce the green- produced from the demonstration project. house impact of electricity generation from coal.
19 MAJOR PROJECTS
Following the positive results obtained from During 2005/2006, CS Energy also con- the two-year feasibility study, a partnership was tributed research fi ndings and in-kind support to established in March under a Memorandum of the CCSD’s work on co-fi ring biomass with coal Understanding between CS Energy, IHI Engineering and utilisation of coal combustion by-products Australia, Xstrata Coal, Schlumberger, JCoal, IHI such as fl y ash. CS Energy also worked with the
(Japan), JPower, CCSD and CO2CRC to undertake Queensland Sustainable Energy Industry Devel- front end engineering design and to develop pro- opment Group to develop professional workshops ject agreements for the oxy-fuel demonstration on installing renewable energy technology in re- project. This was followed up by an application gional Queensland. for Federal Government funding through the Low
Image (right) Oxy-fi ring and geosequestration process.
Emissions Technology Development Fund (LETDF). SWANBANK A DEMOLITION Successful applicants will be advised in the second The project to demolish the 40-year-old Swanbank half of calendar 2006. The project has received A coal-fi red power station made major progress conditional funding support from the Australian in 2005/2006. The demolition is a key part of Coal Association through the $300 million COAL21 preparing the Swanbank site to take advantage fund, announced in February 2006. of future generation opportunities, while at the Should the LETDF application succeed, plans for same time removing the many hazards existing in 2006/2007 include execution of an incorporated a plant of this age. joint venture agreement between the partners and Trio Industries was appointed in April 2005 conclusion of detailed design, to facilitate con- as the contractor to demolish the station and to struction at Callide from April 2007. dispose of all materials from site. The contract was
20 MAJOR PROJECTS
extended in February 2006 to include the demolition and safer than the conventional method of re- of Swanbank A’s cooling towers and three concrete moving furnace casings in multiple pieces and chimney stacks. The scheduled completion date is was used to demolish the remaining boilers in December 2006. June 2006. Commissioned in 1966 and comprising six 68 All boiler asbestos insulation has been re- megawatt units, Swanbank A’s size, location and moved from site and disposed of according to age all presented challenges for the demolition Workplace Health and Safety regulations and the contractor. Swanbank A contains asbestos, like National Code of Practice for the Safe Removal other power stations of its era, and is located of Asbestos. The transformers on site contained adjacent to the operating Swanbank B power low level PCB contaminated oil and these were station. Trio Industries’ exper- also removed and disposed Image (left) tise in demolishing large of according to regulatory CS Energy Project Manager David Collins industrial sites has result- requirements. (left) tracks progress ed in the successful man- The site workforce peaked at the Swanbank A demolition site with agement of these challenges at 50 during 2005/2006 be- Trio Industries to date. fore decreasing to a crew of Site Manager Lester Stewart. The demolition process 21 at year-end, with 82,382 involves cutting the equip- hours worked. Two lost time ment and buildings into injuries occurred during the sections using the ‘cut year, which is a solid safety and drop’ method, which result considering the risks in- minimises workers’ exposure volved in the demolition job. to risk. The sections are then cut into smaller pieces using NEW PROJECTS oxy torches and hydraulically CS Energy is continuing to powered mechanical shears, examine opportunities for the and sorted and stockpiled on next major generation devel- site before being taken away opment in Queensland. The for recycling. A small amount Kogan Creek Power Station of equipment from the power site has the capacity to station was sold following accommodate a second unit calls for Expressions of and during 2005/2006, CS Interest, including coal pul- Energy commenced a feasi- veriser mills and several boiler feed pumps. bility study for Kogan B. CS Energy has also At 30 June 2006, the project was progressing completed feasibility on plant options for ad- on schedule and the majority of equipment had ditional gas fi red generation capacity in south-east been removed, including all turbo-generators, Queensland. During 2006/2007 the Company will transformers, precipitators, fabric fi lters, coal review market conditions to determine the timing bunkers, conveyors, boilers, air pre-heaters and to progress either of these projects for approval by economisers. The demolition of a 300 tonne shareholding Ministers. boiler furnace in May 2006 marked the fi rst time a furnace of its size had been cut and removed in a single controlled ‘drop’ by a pre-engineered hanger cutting sequence. This method is quicker
21 NEW BUSINESS
PROGRESS AND LOOKING FORWARD
2005 2006 • Signed Joint Development Agreement with Australian Gas Light Company to investigate upgrading Mica Creek. • Took delivery of fi rst gas from three suppliers. 3 2006 2007 • Advance the proposed redevelopment and expansion of Mica Creek. • Finalise arrangements for using recycled water at Swanbank.
Image (right) EW BUSINESS INCLUDES the business develop- RESOURCES CS Energy joined ment, resources (fuel and water) acquisition CS Energy sources conventional and coal seam forces with AGL in May 2006 to investigate Nand related management functions. Com- gas and has long-term agreements in place with a expanding Mica Creek bining these functions has been a strategic number of suppliers. Swanbank E took delivery of Power Station. decision of CS Energy as, increasingly, success- fi rst gas from Tipperary Oil and Gas in November ful development in the power sector is heavily 2005, from Arrow Energy’s Kogan North coal seam contingent on access to and control of key re- gas project in January 2006 and Queensland Gas source inputs. Company’s Berwyndale South gas fi eld in April CS Energy continued to examine the next major 2006. CS Energy has also supported the PNG Gas generation development in Queensland during Project since its inception, signing a Conditional the year. The Company considered a second Terms Sheet with PNG Gas Marketing Group in unit at Kogan Creek and a gas-fi red development 2004 and continuing negotiations on a formal gas in south-east Queensland. For information on supply agreement throughout 2005/2006. feasibility planning for these projects see page 21 Coal is sourced from a number of suppliers for of this report. use at Swanbank B and Callide power stations. In In May 2006, CS Energy and Australian Gas Light 2005/2006, CS Energy, Callide Power Management Company (AGL) executed a joint development agree- and Anglo Coal continued a value management ment (JDA) to investigate upgrading the 325MW, study to enhance the combined operation of the gas-fi red Mica Creek Power Station. The expansion mine and Callide Power Station, following some of Mica Creek aims to provide competitively priced instances of coal clinkering. power to existing customers and to cater for In 2006/2007 the New Business team will anticipated growth in energy demand, in line with advance the proposed redevelopment and expan- expected future development of the Carpentaria sion at Mica Creek and continue to seek other Minerals Province around Mount Isa. new business opportunities. Under the terms of the JDA, CS Energy will over- see the redesign and repowering study and operate the upgraded power station. It is planned to expand Mica Creek by up to 100 MW at a projected cost of $150–200 million by 2010. AGL will procure and transport the additional long-term supply of gas for the power station, which will be sourced as part of AGL’s wholesale gas activities.
22 MICA CREEK POWER STATION SERVES THE ENERGY NEEDS OF THE NORTH WEST MINERALS PROVINCE.
23 ORGANISATIONAL DEVELOPMENT
PROGRESS AND LOOKING FORWARD
2005 2006 • Introduced ‘Safe Move’ awareness campaign to improve safety performance. • Expanded graduate development program and introduced tailored training and professional development opportunities. 4 2006 2007 • Implement human resources program for Kogan Creek Power Station. • Roll out high visibility and fl ame retardant clothing for all operational sites.
SAFETY In 2005/2006, CS Energy celebrated signifi cant campaign proved to be a simple and effective way safety milestones, while also responding to the to minimise risks and incorporated CS Energy’s challenges presented by a diverse portfolio of established Job Safety Environment Analysis and power stations, a major construction project at Permit to Work systems. Kogan Creek and a complex demolition of the old CS Energy implemented a quarterly Safety Swanbank A power station. The company also Leadership Survey to report on the safety perform- implemented a new safety awareness campaign ance of its leaders and identify areas for im- across all sites. provement. Survey results to date indicate a 15 The achievement of three years without a lost per cent improvement in staff perceptions of time injury (LTI) at Mica Creek Power Station in the safety focus of their manager. The survey January 2006 set an extraordinary standard for highlights that leaders set the example for safety health and safety at CS Energy and across the in the workplace and complements CS Energy’s power industry. By 30 June 2006, Mica Creek Leadership Principles framework outlined on page was nearing almost three and a half years without 25 of this report. an LTI. Replicating Mica Creek’s excellent safety CS Energy trialled high visibility and fl ame re- record at CS Energy’s other sites is now a priority tardant clothing at its power stations to test its for the company. wearability and suitability for site conditions. Overall, there were 16 LTIs across all CS Energy Improvements were made to the clothing samples sites in 2005/2006 and the corresponding Lost in response to staff feedback and a fi nal option Time Injury Frequency Rate was 5.1. These fi gures will be rolled out to all sites in 2006/2007. include CS Energy employees and contractors. CS Energy also led an agreement with other Nine of the LTIs occurred at the Siemens-Hitachi Queensland generators to establish an industry controlled Kogan Creek Power Project, which is the standard for fl ame retardant clothing for electrical largest construction site in Queensland and had a work at power stations. peak workforce of 900 people. CS Energy worked CS Energy benchmarked its crisis and emerg- with Siemens-Hitachi throughout 2005/2006 on ency response plans against industry best practice, measures to improve site safety. conducted staff training and crisis simulations, and CS Energy introduced the ‘Safe Move’ aware- improved reporting and documentation procedures. ness campaign at all sites in early 2006 to Emergency Response Teams at Callide and emphasise the importance of risk management Swanbank power stations also underwent additional for any work and improve safety performance. The training to maintain their specialised skills.
24 ORGANISATIONAL DEVELOPMENT
One of the more unusual sponsorships CS OUR PEOPLE Energy provided this year enabled the Rural CS Energy employs over 500 staff at four sites Doctors Association of Queensland to run a crisis across Queensland – Swanbank, Callide and Mica simulation as part of their annual conference at Creek power stations and Brisbane corporate Chinchilla. As the conference was located near offi ce. By 30 June 2006, a further 30 operational Kogan Creek Power Project, CS Energy saw an team members were training and preparing for opportunity to provide local emergency services the commissioning of Kogan Creek Power Station with an opportunity to test their skills in partnership in late 2006. with doctors from around Queensland. CS Energy continued rolling out its leadership Other safety focussed activities in 2005/2006 framework introduced in the previous year, with a included: focus on establishing the right structure and • Working with other gener- working arrangements to Image (left) ators to provide consistent underpin organisational ef- Kogan Production Control Offi cer Alan standards across industry fectiveness. By June 2006, Howieson (right) tests for high risk work such most employees had partici- his operator training with Swanbank as working in confi ned pated in workshops about the Senior Operator spaces and working at leadership framework and Michael Grice. heights; its application to CS Energy’s • Providing a $100,000 structure, job roles and every- grant to each site health day working relationships. A and safety committee to Frontline Management train- implement staff health ing program for supervisors and safety suggestions; was also being prepared • Introducing a defensive at year-end to provide ad- driving course for staff ditional skills development who regularly drive to opportunities for leaders. Kogan Creek Power Pro- To support the leadership ject and other sites; framework, CS Energy re- • Implementing gas safety viewed and redesigned a management plans at number of its people sys- each site in response to tems. One example was the new legislation. introduction of new Role Pur- In 2006/2007, CS Energy pose Statements to better will: defi ne roles, set clear expec- • Expand the Safe Move program to promote key tations and defi ne the measures of employee risk areas; effectiveness. An improved performance review • Introduce a Chairman’s Rewards Program to system was implemented, with Role Purpose recognise signifi cant safety innovations and Statements serving as the guiding document for milestones; measuring and improving performance. CS Energy • Rollout high visibility and fl ame retardant also worked to ensure its electronic human res- clothing to all power stations; ource information systems were geared to support • Complete a pandemic plan to increase CS these new processes and provide employees and Energy’s emergency preparedness; and supervisors with ready access to information. • Introduce an ‘Over 50s Club’ offering free health assessments to all employees aged over 50.
25 ORGANISATIONAL DEVELOPMENT
In January 2006, CS Energy conducted a major During 2006/2007, CS Energy will update its recruitment drive for 37 operational staff for the fi ve-year Equal Employment Opportunity Manage- Kogan Creek Power Station near Chinchilla. The ment Plan, train new staff in the leadership program high number and calibre of applications from and rollout its human resources framework for the Queensland, interstate and overseas was encour- Kogan Creek Power Station. aging given the tight labour market conditions. A range of induction, employee relations, training and COMMUNITY relocation processes were developed to support CS Energy strives to be an active participant in the new staff and ensure a successful start to the the four communities that host its operations – power station. Ipswich, Biloela, Mount Isa and Chinchilla. More In response to the ongoing skills shortage in the than 85 per cent of the Company’s staff live power and resources industries, CS Energy stepped and work in these towns, contributing to local up efforts to attract and retain quality staff. These economic and social life. CS Energy’s sponsorship efforts included revamping careers promotional strategy is to support projects that make a lasting material, an increased presence at careers fairs contribution to these communities and address and expanding the graduate development program lifestyle issues in regional Queensland. to include three new professions. Adding to these A particular focus area is providing skills and efforts was ongoing sponsorship of the Queensland personal development opportunities for local youth. Electricity Transmission and Distribution Bursary One of the most successful results of this approach and collaborative work with other generators and is the long-running Moving Opera! partnership be- universities to investigate post-graduate engineer- tween CS Energy and Opera Queensland. Moving ing professional development options. CS Energy Opera! is a fi ve-day workshop that gives secondary also continued to provide apprentice and trainee students the chance to develop their performance opportunities at all of its power stations, and a and vocal skills under the tutelage of Opera joint community based apprenticeship scheme Queensland artists. At the end of the week the with Downs Group Training in readiness for when students stage a free community concert to dis- Kogan Creek is operational. play what they’ve learned. For some students the Communicating to staff based in four locations program is the fi rst step in a musical career, but presents its own set of challenges. A staff news- for most it is a once in a lifetime opportunity that letter, quarterly presentations and regular updates boosts their self-esteem and confi dence. by the Chief Executive all keep staff informed of Moving Opera! returned to Mount Isa and key news, the company’s performance and future Ipswich in early 2006 after initial workshops in direction. CS Energy also initiated a communi- these communities several years ago. The success cations review during the year to evaluate com- of the earlier workshops had increased awareness munication in the Company and identify areas for of the program and resulted in several repeat par- improvement. A market research fi rm conducted ticipants. CS Energy and Opera Queensland also qualitative and quantitative research in early 2006 commissioned an eight-minute DVD during the year and the fi ndings indicated satisfaction with current to highlight to staff and potential sponsors the meta- communication tools and processes, but also found morphosis students undergo in Moving Opera! several communication issues that are common Other sponsorships that provided opportunities to large, geographically dispersed organisations. for youth included the Boonah Arts Festival and Implementing key recommendations from this audit Ipswich Kids Kingdom, where CS Energy funded per- is a priority for 2006/2007. formances of CSIRO’s educational ‘Electricity and With the assistance of its employees, unions Magnetism’ show. The Company also supported and industry stakeholders, CS Energy successfully the national endurance horse-riding event, the negotiated new Enterprise Bargaining Agreements Tom Quilty Gold Cup, which returned to Boonah for for Swanbank and Mica Creek power stations. the second time in six years and is popular with riders across a range of ages and skill levels.
26 ORGANISATIONAL DEVELOPMENT
CS Energy continued to support the economic In other community activities, CS Energy part- development of the communities in which it oper- nered with Chinchilla Shire Council to fund the ates. All power station managers participated in second round of its Chinchilla Community Benefi ts local business development bodies such as the Trust program, which aims to support charitable Ipswich Business Network, the Mount Isa Chamber projects of benefi t to the region. Twelve sport- of Commerce and Enterprise Biloela. Mica Creek ing, education and agricultural community groups Power Station also sponsored the Mount Isa shared more than $122,000 in funding announced Business Awards in October 2005, which were in November 2005. The main criterion is that the designed to foster business confi dence in the successful projects benefi t a wide cross-section remote northwest and reward excellence. of the community. Like many Queensland companies, several CS School, university and TAFE groups toured CS Energy staff members have a family member or Energy’s power stations during the year and the friend who has been affected by cancer. This year Company’s staff gave presentations at schools a combined effort across sites saw the Company and local careers days. The largest tour group reach a fundraising high for the Leukaemia Foun- numbers came from CS Energy’s partnership with Image (left) Ipswich students staged a memorable performance as part of CS Energy and Opera Queensland’s Moving Opera! program.
dation’s World’s Greatest Shave for a Cure. Over Keep Australia Beautiful Queensland (KABQ) and 30 staff participated in the event and raised over Thiess Services at Swanbank. In 2005/2006, $3,600. 449 primary and secondary school students com- Community reference groups at Ipswich and pleted KABQ’s environmental education program Chinchilla continued CS Energy’s tradition of open at Swanbank Power Station. dialogue with its neighbours. These groups have an In 2006/2007, CS Energy will work with local independent chair and local members elected by communities on priority initiatives such as the oxy- the public. They meet regularly to share information fi ring clean coal project and the commissioning of and address any concerns relating to Swanbank the Kogan Creek Power Station. The Company will Power Station or the Kogan Creek Power Project. also continue to seek new ways to make mean- In November 2005, Callide Power Station held ingful contributions to the communities in which the fi rst of a series of public information sessions it operates. to brief the Biloela community about its operations, while in Mount Isa, planning is underway for a com- munity newsletter about Mica Creek Power Station.
27 CORPORATE GOVERNANCE
PROGRESS AND LOOKING FORWARD
2005 2006 • Completed Board Evaluation Review facilitated by independent corporate governance specialist. • Conducted risk assessment workshops to identify and manage risks across the organisation. 2006 5 2007 • Implement recomendations of Board Evaluation Review. • Establish a self-insurance company to manage the risks of the insurance market.
S ENERGY WAS ESTABLISHED IN 1997 under the setting CS Energy’s strategic direction, reviewing and Government Owned Corporations Act 1993 approving plans by senior management, monitoring C(GOC Act) and is incorporated as a public corporate performance, managing risk, upholding company, subject to Corporations Law. Five State the Company’s Code of Conduct and meeting other Government Ministers hold CS Energy shares, statutory and regulatory requirements. and two of these Ministers are voting share- CS Energy provides an induction manual to all holders who represent the interests of the people new Board members to ensure they understand of Queensland. At 30 June 2006, CS Energy’s their responsibilities and arranges site visits, shareholding Ministers were the Deputy Premier, staff briefi ngs and training to ensure Directors Treasurer and Minister for State Development, Trade maintain the knowledge and skills needed to fulfi l and Innovation Anna Bligh MP and the Minister for their roles. Energy and Aboriginal and Torres Strait Islander For biographies of CS Energy’s current Directors, Policy John Mickel MP. From 13 September 2006, please refer to pages 32–33 of this report. There the voting shareholders were the Deputy Premier, were two new Directors appointed on 1 July 2005. Treasurer and Minister for Infrastructure Anna Bligh They were Ms Sarah Israel and Mr Mark Bucknall. MP and the Minister for Mines and Energy Geoff All CS Energy Directors are independent. The Wilson MP. test of independence applied by the Company CS Energy has a corporate governance frame- is that an actual confl ict of interest exists when work to ensure it maintains the highest standards a reasonable person, in possession of relevant of ethics, effi ciency and commercial performance. facts, would conclude that the individual’s private Central to this framework is a Corporate Govern- interests are likely to infl uence the CS Energy ance Charter that refl ects the objectives of good cor- decision-making process. CS Energy regards this porate governance in the ASX Corporate Governance as its Materiality Threshold. Council’s Principles of Good Corporate Governance and Best Practice Recommendations. Responsibility BOARD COMMITTEES for ensuring the company practises good corporate The Board conducts monthly meetings, and ad- governance rests with its Board. ditional meetings as required, to oversee CS Energy’s operations. Directors also participate in briefi ng THE BOARD sessions on topical issues such as environmental performance, plant management strategies and mar- The CS Energy Board consists of seven, indepen- ket trading activities. This combination of regular dent, non-executive directors appointed by the and structured communication enables the Board Governor in Council. The Board is responsible for to address strategic issues critical to the long-term success of the Company.
28 CORPORATE GOVERNANCE
There are four Board sub-committees that pro- and that the Company acts in the best interests of vide a forum for Directors and the executive man- shareholders on remuneration matters. Each year, agement team to discuss more complex business the committee reviews executive remuneration issues. against agreed performance measures. The Audit Committee oversees CS Energy’s The Staff and Remuneration Committee held four fi nancial reporting practices, accounting policies, meetings in 2005/2006 and its members were Tony auditing and external reporting. During 2005/2006, White (Chair), Stephen Lonie and Mark Bucknall. the committee’s members were Julie Leaver (Chair), As a company with an ongoing and signifi cant Stephen Lonie and Sarah Israel. capital development program, the Board’s Major As risk management is a core responsibility of Capital and Technical Committee plays an important CS Energy’s Board, the Company has a dedicated role in tracking the progress and overseeing the Board Risk Management Committee in place. The risk management of major projects. The committee committee oversees the Company’s risk manage- meets monthly to review progress on major projects ment system and ensures compliance with its poli- and provide technical and commercial advice. In cies, procedures and legal obligations. The Risk Man- 2005/2006 the Major Capital and Technical Com- agement Committee meets quarterly, comprises mittee consisted of Stephen Lonie (Chair), Bob all Directors and is chaired by Timothy Crommelin. Henricks and Tony White. CS Energy’s risk management system is outlined in more detail under the ‘Managing Risk’ heading in PERFORMANCE this section. It is the role of the Board to monitor CS Energy’s CS Energy’s Staff and Remuneration Committee corporate performance. The performance of the advises on remuneration policies and practices. In Board is also periodically evaluated at a formal particular, it makes recommendations to the Board workshop facilitated by independent corporate on negotiation parameters for enterprise bargaining governance specialists. agreements as well as remuneration packages and CS Energy has a performance review system other terms of employment for the executive man- to evaluate employees’ performance every six agement team. The committee ensures CS Energy’s months. employees are fairly remunerated for their work
BOARD MEETING AND BOARD COMMITTEE MEETING ATTENDANCES FOR 2005/2006 Each Director attended the following Board and Committee meetings during the course of the year:
Name Board Board Risk Audit Major Staff and Capital Remuneration
11 Meetings 3 Meetings 4 Meetings 11 Meetings 4 Meetings
Stephen Lonie 11 3 4 11 4 Tim Crommelin 10 3 n/a n/a n/a Julie Leaver 10 3 4 n/a n/a Bob Henricks 9 3 n/a 9 n/a Tony White 11 3 n/a 10 4 Sarah Israel 9 1 4 n/a n/a Mark Bucknall 8 2 n/a n/a 4
29 CORPORATE GOVERNANCE
REPORTING Image (right) CS Energy’s Board reports to its shareholding Min- The Board Risk Committee is comprised of all Brisbane staff (from isters about the operations, performance and left) Chris Wayne, Ron Board Members and oversees CS Energy’s risk Roduner, Frank Welch, fi nancial position of the Company. CS Energy pro- management framework. The Board’s responsi- Damon Clarke and duces four key reporting documents: Phillippa Mowle test bilities in this area are facilitated by the work of their crisis readiness • A Corporate Plan that outlines strategies and the two management committees that report to the during a mock exercise. objectives for the next fi ve years and their per- Board Risk Committee: formance indicators. The plan also provides an • the Risk Coordination Committee, which meets industry and economic outlook and the potential on a quarterly basis to coordinate responses to impact on CS Energy. market and operational risks as they arise. • A Statement of Corporate Intent (SCI) outlining • the Market Risk Management Committee, which CS Energy’s goals and objectives for the next monitors market risk on a monthly basis and fi nancial year. A summary of the 2005/2006 recommends systems and controls to manage SCI is on page 36 of this report. those risks. • Quarterly Reports of the Company’s progress CS Energy’s Risk Management Policy guides the meeting the performance targets and measures Board and staff on the Company’s risk management in the SCI. approach. Staff are required to conduct all business • An Annual Report for each fi nancial year that activities in a manner that complies with the law meets statutory requirements for government- and within Board-approved limits of authority. owned corporations and the ASX Corporate Governance Council’s Principles of Good Corpor- CODES OF CONDUCT ate Governance and Best Practice Recommen- CS Energy conducts all business activities with dations. integrity, honesty and complies with relevant laws Audit is an essential component of CS Energy’s and standards. The Company has adopted the reporting activities. The Internal Audit function is an Directors Code of Conduct from the Articles of independent service that reports to the Board and Association of the Australian Institute of Company management. Internal Audit reviews CS Energy’s Directors. Staff members abide by the CS Energy activities, information and records to ensure that: Code of Conduct. • Financial and operational information is reliable; • Compliance with laws, regulations, policies and DIRECTORS’ REMUNERATION procedures occurs; and Directors are remunerated at a level determined • Appropriate procedures are in place to safeguard by the Governor in Council and reimbursed for assets and revenue, and ensure effective use of reasonable expenses incurred while conducting resources. business on behalf of CS Energy. Details of re- CS Energy’s external auditor is the Auditor Gen- muneration paid to Directors during the year eral of Queensland. appear in Note 31 to the Financial Statements.
MANAGING RISK INTERNAL AND EXTERNAL CS Energy’s Board has ultimate responsibility for ADVICE PROTOCOLS managing all potential risks for the Company. CS Directors can seek independent professional advice Energy’s risk management framework ensures all on matters before the Board after receiving approval potential fi nancial, operational and other risks are from the Chair. Directors can also seek professional identifi ed, assessed, monitored and reported to information from CS Energy employees. the Board. DIRECTIONS AND NOTIFICATIONS CS Energy received no directions from its share- holding Ministers during the year.
30 INCREASED CRISIS TRAINING STRENGTHENED CS ENERGY’S RISK MANAGEMENT SYSTEM.
31 DIRECTORS’ PROFILES
STEPHEN LONIE B Com, MBA, CA, F Fin, FIMCA, FAICD Chairman Appointed 1 July 1999, reappointed 1 July 2006, term expires 30 September 2009. Stephen Lonie is an independent management consultant and company director, following over 30 years experience with the major accounting and consultancy fi rm KPMG. He is currently Managing Director of Village Life Ltd, and a non-executive director of Charter Pacifi c Limited and Voxson Limited. Mr Lonie chairs CS Energy’s Major Capital and Technical Committee and is a member of the CS Energy Audit Committee and Staff and Remuneration Committee.
Image (right) Stephen Lonie, Chairman.
TIMOTHY CROMMELIN B Com, F Fin, FAICD Deputy Chairman Appointed 1 July 1997, reappointed 1 July 2005, term expires 30 June 2008. Tim Crommelin is Chairman of ABN Amro Morgans Limited, a Member Corporation of the Australian Stock Exchange. Mr Crommelin brings more than 35 years experience in investment, marketing, stockbroking and capital raising to the Board. He holds a commerce degree from the University of Queensland. His directorships include Australian National University Superannuation Investment Fund, Australian Cancer Research Foundation, Brisbane Grammar School, Abney Hotels Limited and the Queensland Museum Foundation. Mr Crommelin is a member of the Senate, University of Queensland and chairs CS Energy’s Risk Management Committee.
MARK BUCKNALL BA, LLB Director Appointed 1 July 2005, term expires 30 June 2008. Mark Bucknall is a solicitor who comes to CS Energy from the Energex Retail Board, where he chaired the Audit Committee and the joint Energex Remuneration Committee. He also served as inaugural chair of the South-East Queensland Regional Electricity Council and has over a decade of legal experience. Mr Bucknall has advised Indigenous groups on native title and cultural heritage issues relating to the Qld/ NSW Interconnector and the Kogan Creek Power Project. Awarded a Commonwealth sports achievement award for services to Australian Football, Mr Bucknall is an active community member and contributes professional support to community groups and sporting organisations. Mr Bucknall is a member of CS Energy’s Staff and Remuneration Committee.
BOB HENRICKS Queensland Certifi cate of Competency as Electrical Mechanic (Electrician) Director Appointed 1 July 1999, reappointed 1 July 2006, term expires 30 September 2009. Bob Henricks brings more than 40 years of experience to the CS Energy Board. Mr Henricks has served on the board of AUSTA Electric and chairs the Electricity Supply Industry Superannuation Fund and two other superannuation funds. He is also chair of Meanderham Pty Ltd, Electro Group Training Qld Ltd and Electro Group Apprentices Qld Pty Ltd. Mr Henricks is a director of Qld Private Capital Group Pty Ltd. He chairs the Queensland Electrotechnology Industry Training Council, is past State Secretary and National President of the Electrical Trades Union and is a member of the (Australian Government) Central Trades Committee. Mr Henricks, who took his apprenticeship at 15, is still a licensed electrician. He is a member of CS Energy’s Major Capital and Technical Committee.
32 DIRECTORS’ PROFILES
Image (left) Timothy Crommelin, Deputy Chairman.
Image (centre) Mark Bucknall, Director.
Image (right) Bob Henricks, Director.
Image (left) Sarah Israel, Director.
Image (centre) Julie Leaver, Director.
Image (right) Tony White, Director.
SARAH ISRAEL B Bus, FCPA, FAICD Director Appointed 1 July 2005, term expires 30 June 2008. Sarah Israel has extensive experience in project fi nance, investment banking and regional development and currently has consulting roles in fi nance projects in Australia and internationally. Her experience also includes time in the mining and minerals processing and oil and gas industries. Ms Israel is a director of Queensland Sugar Limited (QSL), Export Finance and Insurance Corporation (EFIC), Skytrans Airlines, Australian Biodiesel Group and ESI Superannuation. She is Chair of the Audit Committees of QSL, EFIC and Australian Biodiesel, and sits as a member of the Audit Committee of Queensland Transport. She was previously a director of the Queensland Electricity Transmission Corporation (Powerlink). Ms Israel is a member of CS Energy’s Audit Committee.
JULIE LEAVER B Com, FCPA, MAICD Director Appointed 2 December 1999, reappointed 1 July 2006, term expires 30 September 2009. Julie Leaver has held senior fi nancial roles in the telecommunications and mining industries with companies listed on the Australian and New York stock exchanges. During her 10 years with Telstra Corporation, Ms Leaver was responsible for preparing the Group’s fi nancial statements, annual reports and US prospectus. She was the Telstra Group coordinator of the US prospectus for T2, the second tranche of the sale of the Federal Government’s interest in its ownership of Telstra. Ms Leaver’s experience also extends to 15 years with the former MIM Group, membership of the Australian Accounting Standards Board and project management and corporate governance roles. Ms Leaver chairs CS Energy’s Audit Committee.
TONY WHITE Dip Mech Eng, FIE Aust, Aus IMM, FAIM Director Appointed 18 July 1997, reappointed 1 July 2005, term expires 30 June 2008. Tony White is a technical consultant for Itochu Australia Ltd and a director of Community and Corporate Financial Services Pty Ltd and the Queensland Coal and Oil Shale Superannuation Fund. He is also Chairman of Copperform Holdings Pty Ltd and was Chairman of CS Energy subsidiary Sigma Process Solutions until its acquisition by Alstom Power Australia in March 2003. Mr White has extensive experience in the resources sector, having previously been Executive General Manager, Coal, Copper and Metals Processing with Mount Isa Mines Ltd, where he was able to combine his engineering experience with business development and fi nancial management. Mr White chairs CS Energy’s Staff and Remuneration Committee and is a member of the Major Capital and Technical Committee.
33 SENIOR MANAGEMENT TEAM PROFILES
MARK CHATFIELD B App Sc, BE, Grad Dip Bus, MIE (Aust) Chief Executive Mr Chatfi eld has more than 20 years’ experience in the energy sector. Prior to joining CS Energy, he was General Manager Generation at Western Power, responsible for power station oper- ations and maintenance, fuel purchases and asset renewal. Mr Chatfi eld has also held positions with Ampolex, primarily in gas marketing, and was seconded to the working group assisting the Energy Board of Review (the Carnegie Inquiry) evaluating and recommending Western Australia’s preferred electricity industry structure.
TONY ANDERSEN BE, MIE (Aust) General Manager Major Projects Mr Andersen has more than 30 years of experience in the energy sector. He has worked in management at Tarong, Callide, Swanbank and Queensland’s hydro power stations. As General Manager Major Projects, he is responsible for the development of new projects. This currently includes Kogan Creek Power Project, Swanbank A demolition, and the research and development of new technology. He is also a director of Callide Energy Pty Ltd, Callide Power Management Pty Ltd and Kogan Creek Power Project Pty Ltd.
RICHARD BOYS BCom, MBA, FCIS Chief Financial Offi cer Mr Boys has more than 20 years of experience in business management and administration in the resources and energy sectors. Previously, Mr Boys fulfi lled the roles of General Manager Corporate Services and Company Secretary for the CS Energy group of companies. In these roles, he was responsible for human resources, corporate communications, internal audit, legal and corporate administration. As Chief Financial Offi cer, Mr Boys is responsible for fi nance, information technology and business systems. He is also a director of various CS Energy subsidiary companies associated with Mica Creek Power Station, Callide Power Project, Kogan Creek Power Project and Swanbank E Project.
RON RODUNER BE (Hons), MIE (Aust), MBA, FAICD General Manager Operations Mr Roduner has worked in the Queensland electricity industry for more than 21 years and has worked in private enterprise for a number of years. He has signifi cant project management experience and played a key role in the development of the Queensland and national electricity markets. As General Manager Operations, he is responsible for all facets of power station and market operations. In this role he oversees Swanbank, Callide, Mica Creek and Kogan Creek power station operations and support services, as well as market risk management, pool operations, hedging activities, ancillary services, settlements, reporting and market regulation. He is also a director and joint General Manager of Callide Power Trading Pty Ltd.
34 SENIOR MANAGEMENT TEAM PROFILES
Image (left) Turbine blades were individually cleaned and checked for wear and tear during the Swanbank E overhaul.
CHRIS TURNBULL B Bus MAICD General Manager Corporate Services and Company Secretary Mr Turnbull was appointed General Manager Corporate Services in November 2001. He has worked in the energy industry in the areas of business management and administration for more than 20 years. Mr Turnbull is Deputy Chair of the Electricity Credit Union and a member of that Board’s Audit and Risk Management, Financial Investment and Planning and Remuneration committees. Mr Turnbull is also Company Secretary for the CS Energy group of companies. As General Manager Corporate Services, he is responsible for internal audit, legal and corporate administration.
MALCOLM KEAG BE (Chem) (Resigned 3 August 2006) General Manager Organisational Development Mr Keag has worked in a wide range of roles in the minerals processing, mining and human resources areas for more than 18 years in corporate and consulting environments. Previous companies include Nabalco, Comalco, Pacifi c Coal, Coal and Allied, Energy Resources of Australia, World Competitive Practices and The Empower Group. As General Manager Organisational Development, he is accountable for human resources, occupational health and safety, marketing and communication, and industrial relations.
PAUL HYSLOP MBA, BE (Hons), BA, Grad Dip (Applied Finance) General Manager New Business Mr Hyslop has gained a diverse breadth of experience in the power industry over the last 16 years through working in system operation, marketing and trading, and business development at companies such as Hydro Tasmania, Snowy Hydro and Edison Mission Energy. Most recently, he worked for economics fi rm ACIL Tasman in Melbourne where he consulted to the electricity and gas industries. A qualifi ed electrical engineer, Mr Hyslop also holds an Arts Degree, a Masters of Business Administration and a Graduate Diploma in Applied Finance. He is currently studying a Graduate Diploma in Economics.
35 STATEMENT OF CORPORATE INTENT
NDER THE GOVERNMENT OWNED CORPORATIONS ACT In summary, the 2005/2006 SCI outlines the (GOC Act) 1993, CS Energy is required to following key business objectives: U prepare a Statement of Corporate Intent • Increase the Company’s portfolio of generating (SCI) each fi nancial year. assets – both by expanding existing operations The SCI is a performance agreement between and identifying suitable new sites. CS Energy and its voting shareholding Ministers • Continue to diversify fuel sources and complements the Company’s fi ve-year Corpor- • Increase the effi ciency of the existing portfolio ate Plan. of assets and meet reliability, safety and en- The full SCI, which includes details of the vironmental goals. Company’s mission, vision, objectives, activities, capital structure and dividend policies, will be tabled in the Legislative Assembly in accordance with Section 132 of the GOC Act.
36