CS Energy Annual Report 2010/2011 2010/2011 in Review
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Annual Report 2010/2011 Table of contents 2010/2011 in review About CS Energy Inside front cover Highlights 2010/2011 2 Performance against measures 4 Chairman’s review 6 Chief Executive’s review 8 Corporate performance Finance 10 Market 12 Portfolio 14 People 16 Social Licence 22 Portfolio performance Callide Power Station 26 Kogan Creek Power Station 30 Mica Creek Power Station 34 Swanbank Power Station 38 Corporate Governance Report 42 Board of Directors profiles 48 Executive Management Team profiles 52 Financial Report 54 Directors’ Report 55 Auditor’s Independence Declaration 61 Statement of Comprehensive Income 62 Notes to the Financial Statements 67 Directors’ Declaration 116 Independent Auditor’s Report 117 esaa Sustainable Principles table 118 Index 120 Glossary Inside back cover CS Energy Annual Report 2010/2011 2010/2011 in review About this report About CS Energy The 2010/2011 Annual Report outlines our operational, Last year, we produced our first combined Annual CS Energy is a Queensland Government owned energy provider and financial, economic, environmental and social performance Report and Sustainability Report following a Corporate as at 30 June 2011, we had 638 employees across four power station for the financial year 1 July 2010 to 30 June 2011. This Responsibility and Sustainability Review in 2009. sites and a corporate office, and we had a generation capacity of is CS Energy Limited’s (CS Energy’s) second combined CS Energy is committed to embedding sustainability within 3,165 megawatts. Annual Report and Sustainability Report. all of our business practices, and our progress towards this CS Energy supplied approximately 30 per cent of Queensland’s The Annual Report provides key performance information goal is outlined in this report. electricity requirement, using a fuel mix of natural gas, black coal, coal to our stakeholders including employees, shareholders, CS Energy’s 2009/2010 Annual Report was submitted to customers, community, partners, suppliers, unions, the Australasian Reporting Awards (ARA) to benchmark our seam methane and landfill gas. We operated a diverse portfolio of industry peers, special interest groups and the media. The report against the ARA criteria. The ARA was established operating plant able to supply base, intermediate and peak load, both information that CS Energy considers to be material to our to improve the standards of reporting in Australia. on and off the national electricity grid. stakeholders is drawn from the Energy Supply Association CS Energy’s 2009/2010 Annual Report achieved a silver Our operating sites were: of Australia (esaa) Sustainable Practice Framework (see award, recognising that the report included quality • Callide Power Station, near Biloela in Central Queensland below for more details). For more information about our coverage of most aspects of the ARA criteria, adequate • Kogan Creek Power Station, near Chinchilla in South West stakeholders, please see page 22. disclosures of key aspects of the core business and Queensland In November 2010, the Queensland Government announced addressed current legislative and regulatory requirements. • Mica Creek Power Station, near Mount Isa in North West Queensland the outcomes of the Shareholder Review of Queensland This report, together with our previous reports, is available • Swanbank Power Station, near Ipswich in South East Queensland. Government Owned Corporation Generators (Generator on the CS Energy website at www.csenergy.com.au or by Restructure). CS Energy transitioned to a new business with phoning (07) 3854 7777. We welcome your feedback and On 25 November 2010, the outcomes of the Shareholder Review of the a new portfolio on 1 July 2011, in line with the shareholding suggestions about this report. Feedback can be directed to Queensland Government Owned Corporation Generators (Generator Ministers’ direction following the Generator Restructure. the Chief Executive via email at [email protected] Restructure) were announced, including a recommendation to This year’s Annual Report details CS Energy’s assets for the or by mail to the Chief Executive, CS Energy Limited, restructure the Queensland Government owned generating companies 2010/2011 financial year. More information on the Generator PO Box 2227, Fortitude Valley BC Qld 4006. from three companies into two – a restructured CS Energy and Stanwell Restructure can be found on the following page. Corporation Limited. Under the Generator Restructure, our operating sites are: • Callide Power Station, near Biloela in Central Queensland • Kogan Creek Power Station, near Chinchilla in South West Queensland How CS Energy measures performance • Wivenhoe Power Station, near Esk in South East Queensland • Gladstone Power Station, market control under IPPA. CS Energy is a member of the Energy Supply Association CS Energy’s 2010/2011 Financial Report has been CS Energy’s portfolio prior to 1 July 2011 of Australia (esaa) which represents key sectors of audited by the Queensland Auditor-General, and his ( ) ( ) Australia’s energy supply industry, including generation, declaration can be found on page 61. Given the change Plant Fuel Station design capacity (MW) CS Energy owned (MW) 1 transmission, distribution and retail. We are a signatory to in business focus during 2010/2011 resulting from the Callide Callide A1 Black coal 120 120 the esaa’s Sustainable Practice Framework, a framework Generator Restructure, CS Energy did not undertake an Callide B Black coal 700 700 designed to encourage excellence in sustainability practice, internal audit of the non-financial performance results 2 Callide C2 Black coal 810 405 performance and reporting. contained in the 2009/2010 Annual Report as planned. Kogan Creek Kogan Creek A Black coal 750 750 CS Energy is in the process of preparing a new data CS Energy participated in the development of the Mica Creek Mica Creek A (Units 1,2,3,4)3 Gas 132 132 collection manual for non-financial performance data to Mica Creek Mica Creek A (Units 1,2,3,4) Gas 132 132 framework with other members of the esaa, and has 4 Mica Creek A (Units 5,6,7) Gas4 103 103 committed to the following principles: ensure performance measurement is consistent across our new portfolio. This manual will provide a basis for Mica Creek B Gas 35 35 1. Maintain good corporate governance. 4 a robust internal audit on CS Energy’s non-financial Mica Creek C Gas4 55 55 2. Deliver value to shareholders, customers and the 5 performance data. Swanbank Swanbank B5 Black coal 480 480 community. 4 Each year, CS Energy is required to submit a Statement Swanbank E Gas4 385 385 3. Provide a safe, secure and reliable energy supply. of Corporate Intent (SCI) and Corporate Plan to Total capacity 3,570 3,165 4. Engage key internal and external stakeholders on our shareholding Ministers, forming a performance 1. Callide A Power Station is in storage. One unit is being used for the Callide Oxyfuel Project. significant sustainability matters. agreement between CS Energy and our shareholders. 2. Callide C Power Station is owned in a 50 per cent joint venture with InterGen. 5. Maintain and enhance workforce health, safety, The SCI and Corporate Plan detail financial and 3. Mica Creek Power Station Unit A3 has been decommissioned bringing the operating capacity of Mica Creek A Power Station to 99 megawatts. 4. Combined-cycle. wellbeing and development. non-financial performance criteria that we set out to 5. Two Swanbank B Power Station units were placed into storage in June 2010 and a further unit in May 2011 bringing operating capacity to 120 megawatts. 6. Develop and implement climate change responses. achieve. Queensland Government owned generating companies were required to amend their SCIs, to reflect CS Energy’s portfolio from 1 July 2011 7. Improve environmental performance and resource the recommendations of the Generator Restructure which efficiency. Plant Fuel Station design capacity (MW) CS Energy owned (MW) called for the companies to re-focus business operations Callide Callide A1 Black coal 120 120 8. Foster and support community programs. from growth to one of cost competitiveness. A summary Callide Callide A Black coal 120 120 9. Promote measurement and reporting of sustainability of CS Energy’s 2010/2011 Amended SCI can be found on Callide B Black coal 700 700 2 performance. page 47 of this report, and a copy of the full 2010/2011 Callide C2 Black coal 810 405 3 Through the esaa forum, these principles were chosen Amended SCI (with commercially sensitive information Gladstone3 Black coal 1,680 1,680 as material by the energy industry and have been deleted) can be found on our website. Kogan Creek Kogan Creek A Black coal 750 750 cross-referenced with the Global Reporting Initiative’s Wivenhoe Wivenhoe Unit 1 and 2 Pumped storage hydro electric 500 500 Sustainability Guidelines (GRI G3 Guidelines). We use Total capacity 4,560 4,155 these principles to form the basis of CS Energy’s non- 1. Callide A Power Station is in storage. One unit is being used for the Callide Oxyfuel Project. financial reporting. Our performance against the nine 1. Callide A Power Station is in storage. One unit is being used for the Callide Oxyfuel Project. 2. Callide C Power Station is owned in a 50 per cent joint venture with InterGen. principles, together with page references, is included 3. CS Energy holds the Interconnection and Power Pooling Agreement that entitles CS Energy to trade the output of Gladstone Power Station in excess of Boyne Aluminium Smelter requirements. at the end of this report on pages 118 to 119. About CS Energy CS Energy is a Queensland Government owned energy provider and as at 30 June 2011, we had 638 employees across four power station sites and a corporate office, and we had a generation capacity of 3,165 megawatts. CS Energy supplied approximately 30 per cent of Queensland’s electricity requirement, using a fuel mix of natural gas, black coal, coal seam methane and landfill gas.