Annual Report 2020 Ausnet Services A
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ANNUAL REPORT 2020 AUSNET SERVICES A Annual Report 2020 ANNUAL REPORT 2020 AUSNET SERVICES 1 About Us Location of our electricity We are a diversified Australian energy infrastructure and gas networks business with over $10.8 billion of electricity and gas network and connection assets. These assets deliver energy safely and reliably to around 1.5 million customers across Victoria. Our network and connection assets are designed, built, maintained and operated by our 1,700 employees across our regulated networks and our commercial Contents energy services business, Mondo. Buronga Murraylink Interconnector Our electricity and gas networks 2 AusNet Services is focused on Red Cliffs ensuring all our customers can Monash 2019/20 Energy sector rely on our networks to deliver operating environment 4 Kiamal energy, while we work to adapt Wemen 2020 highlights 6 and evolve the networks to support the shift to more Five-year financial summary 7 renewable generation and the spectrum of Kerang Chairman’s message 8 Jindera customer needs. Managing Director’s report 9 Wodonga Murra Warra Shepparton Murray Sustainability 10 Fosterville Glenrowan Dederang Safety 12 Bendigo Mt Beauty Horsham Dartmouth Customers 14 Bulgana Kiewa Crowlands Bogong Ararat Waubra South East People 16 McKay Creek Eildon Community 18 Ballarat Elaine A Haunted Gully Bluegums B Networks 20 Mortlake Moorabool Heywood Geelong Mondo 24 Tarrone Terang Our Executive Leadership Team 26 Portland Basslink Aluminium Interconnector Smelter Victorian Financial report 29 Desalination Plant Directors’ report 30 Notes to the consolidated financial statements 81 Directors’ declaration 135 A Thomastown B Sydenham South Morang Legend Lead Auditor’s independence Keilor West Yallourn AusNet Services’ electricity distribution network declaration 136 Melb. Templestowe Altona Brunswick AusNet Services’ gas distribution network Ringwood Morwell Loy Loy Richmond Brooklyn Yang Yang AusNet Services’ terminal/switching stations Independent auditor’s report 137 Deer A B Park Newport Malvern Valley Non-AusNet Services terminal/switching Springvale Rowville Loy Power Fishermans Yang Glossary of terms 143 Bend Hazelwood stations Heatherton East SY Jeeralang Rowville Basslink Power stations (non-AusNet Services) Our Corporate Governance Statement, Infrastructure Entity Statement Frankston Hazelwood converter Shareholder information 145 station AusNet Services’ regulated transmission lines and Tax Transparency Report are available on our website: Tyabb Cranbourne Non-AusNet Services transmission lines Company information 147 www.ausnetservices.com.au/Investor-Centre/Company-reports Western Port Cover – Johnny Walker and Kayla George from the Mondo Team. 2 AUSNET SERVICES ANNUAL REPORT 2020 ANNUAL REPORT 2020 AUSNET SERVICES 3 Our electricity Legend and gas networks Electricity transmission Electricity distribution Gas distribution Non AusNet Services 6,836km of high- Coal/gas Electric Supplying electricity Micro grid EV fast Electricity Transmission voltage transmission generation vehicles to over 750,000 homes with charging powerlines residential and solar panel stations Our transmission network transports business customers and battery electricity from where it is generated, 13,153 through terminal stations and transmission high-voltage transmission powerlines towers across the state, to Victoria’s five lower-voltage distribution networks. WALL BATTERY WALL BATTERY Electricity Distribution Our electricity distribution network feeds lower-voltage electricity to customers across all of eastern and north-eastern Victoria and Wind farms in Melbourne’s north and east. with/without batteries Big battery/ 11,893 kilometres of Gas Distribution pumped hydro underground Our gas distribution network supplies gas pipelines natural gas to residential and business customers in western Melbourne, Solar plants central and western Victoria, through with/without Supplying batteries natural gas our network of underground gas to over pipelines. 730,000 residential and business customers Mondo Mondo provides services and technology for essential infrastructure in the energy, water and transport sectors, including transmission connections, grid-scale storage, smart energy management systems, mini 407,354 power poles, grids, and community energy hubs. 59 terminal 76 zone with 61,994km Gas stations substations of powerlines production 4 AUSNET SERVICES ANNUAL REPORT 2020 ANNUAL REPORT 2020 AUSNET SERVICES 5 2019/20 Energy Sector Operating Environment Given our role in the energy In recent years policy and political uncertainty, there remains significant confusion on many Together the five pillars of our Energising supply chain, AusNet Services climate change, bushfires, changes to the aspects of this debate including the role of Futures strategy are focused on positive is accustomed to delivering location and characteristics of energy demand renewable energy in the electricity network outcomes for our stakeholders: and supply, and increasing interest by and the causes of large-scale transmission > Improve efficiency and reduce costs services within a challenging > Cost efficiency – improve efficiency and operating environment. customers and communities have featured outages. reduce costs Cost efficiency strongly. Now, the health and economic The Victorian bushfires from late December impacts of the COVID-19 pandemic are > Customer centricity – ensure positive 2019 through to February 2020 caused further challenging the business, our customer outcomes and experience while extensive damage to the network. Many customers and society more broadly. addressing broader stakeholder customers in the Gippsland and Upper Murray considerations AusNet Services’ experience in operating regions were without power for several weeks through extreme events means the business and restoration was made more difficult > Digital utility – invest in digital technology is responding and adapting to the immediate by ongoing fire activity and access issues. to improve efficiency and customer > Ensure positive customer outcomes challenges. At the same time, we are Our operational objective was to reconnect experience and experience managing and progressing the business’ customers as quickly as possible with safety Customer centricity > Future-ready capabilities and culture response to the ongoing transformation as the number one priority. In the longer term, – ensure we have the right culture and of our industry. we are looking at opportunities to install more capabilities for a high-performing resilient local microgrids in remote bushfire We have managed the business and invested sustainable future prone areas. to deliver positive outcomes for customers, > Growth – create long-term value for shareholders, employees and communities. Transmission reliability issues were brought shareholders by substantial investment We have maintained a strong financial further into focus by the damage to electricity > Invest in digital technology to improve in the energy transition standing while also investing nearly $1 billion transmission towers caused by an extreme efficiency and customer experience of capital expenditure in both FY2019 and weather event in western Victoria in January AusNet Services is not complacent about the Digital utility FY2020 upgrading our networks, diversifying 2020. Six transmission towers on the main scale of the current challenges of COVID-19 our asset base into unregulated assets, and lines between Moorabool and Heywood were and the impacts they could have on our improving reliability and safety for our brought down with a seventh tower damaged organisation, both in the short term and long customers. by extreme high winds. We erected temporary term. Our entire organisation is focused on transmission towers as quickly and safely as adapting our strategy to the circumstances. Energy policy uncertainty and political possible, working with the Australian Energy Work in our customer centricity pillar has confusion have continued throughout this Market Operator, our delivery partners and focused on providing bill relief for impacted > Ensure we have the right culture and capabilities year. Whilst we have seen indications of a interstate transmission counterparts households and small businesses, minimising for a high-performing sustainable future consensus emerging on the need for new Future-ready Transgrid, Powerlink and Electranet to outages and working with electricity retailers transmission development broadly, there capabilities and culture minimise the impact on customers. to support those in hardship. remains a lack of agreement. For regulated businesses this adds complexity in executing The COVID-19 pandemic will likely have We have deferred several initiatives to ensure our strategy. an enduring impact on the operating the organisation’s focus is maintained on our environment, the economy and our response and recovery efforts. We are For most of last year there was a strong customers. Our immediate focus is to support responding to the financial impacts by community, political and media focus on the customers and ensure we can continue to managing our cost base, while also ensuring reliability of the electricity network and the > Create long-term value for shareholders provide essential electricity and gas network we maintain a strong financial position to adequacy of supply, particularly here in services. We are addressing the longer-term pursue investment obligations as the energy Victoria. Whilst improved from previous