ANNUAL REPORT 2013/14 About this report About Stanwell This report provides an overview of the major Stanwell is a diversified energy business. initiatives and achievements of Stanwell We own coal, gas and water assets, which Corporation Limited (Stanwell) as well as the we use to generate electricity; we sell business’ financial and non-financial performance electricity directly to business customers; for the 12 months ended 30 June 2014. and we trade gas and coal. Each year, we document the nature and scope With a generating capacity of approximately of our strategies, objectives and actions in our 4,200 megawatts, Stanwell is the largest Statement of Corporate Intent. The Statement electricity generator in Queensland. of Corporate Intent represents our performance We have the capacity to supply more agreement with our shareholding Ministers. than 45 per cent of the State’s peak Our performance against our 2013/14 Statement electricity requirements through our of Corporate Intent is summarised on page 5 coal, gas and hydro generation assets. and pages 8 to 15. As at 30 June 2014, we employed Electronic versions of this and previous years’ 710 people at our sites and offices. reports are available online at www.stanwell.com or from Stanwell’s Stakeholder Engagement team on 1800 300 351. Our mission Stanwell contributes to Queensland's prosperity through the safe and responsible provision of energy and commercial returns from business operations. TABLE OF CONTENTS Our values About Stanwell Our values – Safe, Responsible and Commercial – shape how we lead and Report from the Board 2 operate our business. Chief Executive Officer’s review 3 Together, they guide how we think, make Performance indicators 5 decisions and act on a day-to-day basis at Stanwell. Asset performance 6 Strategic direction 7 Simplify and streamline our business 8 Sell our energy for the best return 12 Secure our future 14 Corporate governance 16 Financial results 24 Directors’ report 25 Auditor’s independence declaration 31 Financial statements 32 Notes to the consolidated financial statements 38 Directors’ declaration 106 Independent auditor’s report 107 Glossary 108 Energy portfolio GENERATION ASSETS Generation assets Coal assets A. Stanwell Power Station, Central Queensland – Coal Water assets 1,460 MW (coal) Gas Gas assets B. Tarong power stations, Southern Queensland – POWER STATIONS – COMPETITIVE STABLE FUEL ASSETS – COAL, GAS INNOVATION AND STRONG TRADING AND RISK 1,843 MW (coal) BEST-IN-CLASSHydro FUEL SUPPLYOffice AND HYDRO DEVELOPMENT MANAGEMENT TEAMS MAINTENANCE C. Swanbank E Power Station, South East Queensland – 385 MW (gas) D. Mackay Gas Turbine, Central Queensland – 34 MW (diesel) E. Mica Creek Power Station, North West Queensland – 302 MW (gas) F. Kareeya Hydro, Far North Queensland – 86.4 MW (hydro) Energy portfolio G. Barron Gorge Hydro, Far North Queensland – 66 MW (hydro) H. Koombooloomba Hydro, Far North Queensland – 7.3 MW (hydro) GENERATION ASSETS Generation assets Coal assets A. I. Wivenhoe Small Hydro, South East Queensland – Stanwell Power Station, Central Queensland – Coal Water assets 1,460 MW (coal) 4.3 MW (hydro) Gas Gas assets B. Tarong power stations, Southern Queensland – COAL ASSETS 1,843 MW (coal) Hydro Office J. C. Swanbank E Power Station, South East Queensland – G CAIRNS Meandu Mine, Southern Queensland – long-term coal supply to the Tarong power stations 385 MW (gas) D. Mackay Gas Turbine, Central Queensland – 34 MW (diesel) K. Kunioon coal resource, South Queensland – potential future fuel N H E. Mica Creek Power Station, North West Queensland – supply for the Tarong power stations 302 MW (gas) F TULLY L. Curragh North Mine, Central Queensland – long-term agreementF. Kareeya Hydro, Far North Queensland – 86.4 MW (hydro) with Wesfarmers Curragh which provides low-cost coal to G. Barron Gorge Hydro, Far North Queensland – 66 MW (hydro) Stanwell Power Station, and a revenue stream for coal exports H. Koombooloomba Hydro, Far North Queensland – M. Mineral Development Licence 306, Central Queensland – coal7.3 MW (hydro) MOUNT ISA resource located near the Curragh North Mine I. Wivenhoe Small Hydro, South East Queensland – 4.3 MW (hydro) E WATER ASSETS MACKAY COAL ASSETS D N. Koombooloomba Dam, Far North Queensland – capturesJ. water G CAIRNS Meandu Mine, Southern Queensland – long-term coal supply to for use at Koombooloomba Hydro and Kareeya Hydro powerthe Tarong power stations stations K. Kunioon coal resource, South Queensland – potential future fuel N H M ROCKHAMPTON GAS ASSETS supply for the Tarong power stations TULLY L F O. L. Curragh North Mine, Central Queensland – long-term agreement Kogan North Joint Venture, South East Queensland – provideswith Wesfarmers Curragh which provides low-cost coal to A up to four petajoules per annum of gas to Swanbank E PowerStanwell Power Station, and a revenue stream for coal exports Q Station via the Roma to Brisbane Gas Pipeline M. Mineral Development Licence 306, Central Queensland – coal MOUNT ISA P. Roma to Brisbane Gas Pipeline – contracted capacity of 52 resource located near the Curragh North Mine E terrajoules per day MACKAY WATER ASSETS K D Q. Comet Ridge agreement, Central Queensland – option toN. secu Koombooloombare Dam, Far North Queensland – captures water B J long-term gas or to exit agreement for an agreed payment tofor use at Koombooloomba Hydro and Kareeya Hydro power Stanwell of $20 million stations P I M BRISBANE ROCKHAMPTON GAS ASSETS O L O. Kogan North Joint Venture, South East Queensland – provides C A up to four petajoules per annum of gas to Swanbank E Power Q Station via the Roma to Brisbane Gas Pipeline P. Roma to Brisbane Gas Pipeline – contracted capacity of 52 terrajoules per day K Q. Comet Ridge agreement, Central Queensland – option to secure B J long-term gas or to exit agreement for an agreed payment to GENERATION ASSETS COAL ASSETS WATER ASSETS P I Stanwell of $20 million A. STANWELL POWER STATION, Central J. MEANDU MINE, Southern Queensland N. KOOMBOOLOOMBA DAM, Far North BRISBANE Queensland – 1,460 MW (coal) – long-term coal supply to the Tarong Queensland – captures water for use at O C B. power stations Koombooloomba Hydro and Kareeya TARONG POWER STATIONS, Southern Hydro power stations Queensland – 1,843 MW (coal) K. KUNIOON COAL RESOURCE, Southern C. Queensland – potential future fuel supply SWANBANK E POWER STATION, South East for the Tarong power stations GAS ASSETS Queensland – 385 MW (gas) O. KOGAN NORTH JOINT VENTURE, South East L. D. CURRAGH NORTH MINE, Central Queensland Queensland – provides up to four petajoules MACKAY GAS TURBINE, Central Queensland – long-term agreement with Wesfarmers – 34 MW (diesel) per annum of gas to Swanbank E Power Curragh which provides low-cost coal to Station via the Roma to Brisbane E. MICA CREEK POWER STATION, North West Stanwell Power Station, and a revenue Gas Pipeline Queensland – 302 MW (gas) stream for coal exports P. ROMA TO BRISBANE GAS PIPELINE M. F. KAREEYA HYDRO, Far North Queensland MINERAL DEVELOPMENT LICENCE 306, – contracted capacity of 52 terrajoules – 86.4 MW (hydro) Central Queensland – coal resource located per day near the Curragh North Mine G. BARRON GORGE HYDRO, Far North Q. COMET RIDGE AGREEMENT, Central Queensland – 66 MW (hydro) Queensland – option to secure long-term gas H. KOOMBOOLOOMBA HYDRO, Far North or to exit agreement for an agreed payment Queensland – 7.3 MW (hydro) to Stanwell of $20 million I. WIVENHOE SMALL HYDRO, South East Queensland – 4.3 MW (hydro) STANWELL ANNUAL REPORT 2013/14 | ABOUT THIS REPORT | ABOUT STANWELL 1 Report from the Board In 2013/14 Stanwell performed Our strong results reflect the hard We are focused on achieving strongly, ensuring the long-term work of the organisation in both commercial sustainability of our competitiveness of its existing restoring the profitability of our business through flexible portfolio assets and laying the foundation generation assets and diversifying our operations, diversification of revenue for future revenue growth. revenue streams into other energy streams and aggressive, but This success is the result of markets. appropriate, cost management. our deliberate strategic decision Another major achievement is the Our longer term financial goal is to to reposition Stanwell from significant reduction of more than achieve a return on equity of eight an electricity generator to a 50 per cent in the number of injuries to 10 per cent on our electricity diversified energy business. at our sites and offices. While generation business by 2017/18. commendable and encouraging, We are confident the business can Sadly, Stanwell’s Chairman, the these results are only a step in the achieve this in 2015/16 – two years Honourable Warwick Parer A.M., journey to achieving our goal of ahead of our original target. passed away suddenly in Zero Harm in everything we do. March 2014. Thank you to our shareholding At a state and federal government Ministers: the Treasurer and Minister Warwick will be remembered for level, there have been several major for Trade, The Honourable Tim his many years of public service policy announcements that may have Nicholls MP; and the Minister for and long contribution to the people a significant impact on Stanwell. Energy and Water Supply, The of Queensland whom he proudly Honourable Mark McArdle MP – represented as a Senator from In December 2013, the Queensland for their continued stewardship of 1984 to 2000. Government announced that it would the business. examine options for future ownership Warwick was appointed Chairman of government-owned assets, We would like to acknowledge the of the Stanwell Board in 2012. including Stanwell, and that it will efforts of the Chief Executive Officer, During his tenure, he oversaw the seek a mandate from the people of Richard Van Breda, his leadership transformation of the business, Queensland at the next state team and all Stanwell employees. within one of the most disruptive election before implementing any sale It is through their hard work and and difficult trading markets process.