CELEBRATING 100 YEARS OF FUTURE THINKING ‘The Hydro’ is 100 years old in 2014. This significant milestone is worth recognising and celebrating by all Tasmanians. Our history goes well beyond the corporate story and is part of the living memory of thousands of workers and their families. As we celebrate the first 100 years, it is time to give thanks to the men, women and children who made it all possible, and to hear the stories of the people who contributed so much. We started in 1914 as the Hydro-Electric Department and were later known as the Hydro-Electric Commission, the Hydro-Electric Corporation and Hydro Tasmania. But it has been known and claimed by Tasmanians for generations simply as the Hydro. For a century, the Hydro has shaped Tasmania’s industries, economy, landscape and community. Our legacy is not only the engineering and construction feats, but also the lasting impact on the state’s population and culture. Thousands of ‘Hydro people’, many from overseas, came to toil on the schemes and made Tasmania home. Annual Report 2014 Celebrating where we’ve been… …and where we’re going. DIRECTORS’ STATEMENT To the Honourable Matthew Groom MP, Minister for Energy, in compliance with the requirements of the Government Business Enterprises Act 1995. In accordance with Section 55 of the Government Business Enterprises Act 1995, we hereby submit for your information and presentation to Parliament, the report of the Hydro-Electric Corporation for the year ended 30 June 2014. The report has been prepared in accordance with the provisions of the Government Business Enterprises Act 1995. David Crean Chairman, Hydro-Electric Corporation October 2014 Janine Healey Director, Hydro-Electric Corporation October 2014 Hydro-Electric Corporation ARBN 072 377 158 ABN 48 072 377 158 OUR VISION Australia’s leading clean energy business inspiring pride and building value for our owners, our customers and our people. OUR VALUES • We put people’s health and safety first • We build value for our partners and customers through innovation and outstanding service • We behave with honesty and integrity • We work together, respect each other and value our diversity • We are accountable for our actions • We are committed to creating a sustainable future CONTENTS About this report ..............................................................4 Our Business 5 Achievements and challenges ..........................................5 Awards ..............................................................................5 Our sustainability vision ....................................................6 Business overview ............................................................7 Material Issues ..................................................................9 Chairman’s review ...........................................................10 CEO’s report .....................................................................12 Independent assurer’s statement ...................................14 Economic 15 Financial results ...............................................................15 Impacts from energy reforms and changing policy .........16 Adapting to a changing energy market ...........................16 Governance 17 Business processes ..........................................................17 The Board ........................................................................18 Executives........................................................................20 Public interest disclosures ...............................................22 Customers 23 Our markets .....................................................................23 Hybrid off-grid power supply ...........................................25 Infrastructure and resources 27 Asset safety and reliability ...............................................27 Water storage levels ........................................................28 Environment 31 Ecosystems and heritage ................................................31 Emissions.........................................................................33 Community 35 Stakeholder satisfaction ..................................................35 Community support ........................................................36 Engaging with communities ............................................37 Multiple use of water .......................................................38 Suppliers ..........................................................................39 Our people 41 Valuing employees ..........................................................41 Safety, health and wellbeing ...........................................42 Financial Report 45 Summaries 108 Generation summary......................................................108 Financial statistical summary .........................................109 Long-term sustainability indicator (LSI) summary .........110 Abbreviations, acronyms and glossary ...........................111 Measuring water storage levels ......................................112 Terms of energy measurement ......................................112 Index ...............................................................................113 Hydro Tasmania Annual Report 2014 1 The past In the early 1900s, the miracle of After the Second World War, the Hydro in 1983 when the High Court prevented the hydro-electric power was just arriving recruited large numbers of European Franklin Dam from being built. in Tasmania. Launceston’s streets were migrants to construct dams and power lit by the privately-owned Duck Reach stations. Many of these workers settled Out of the days of environmental conflict Power Station, and a few industries were permanently and stayed with the came a deepened commitment by generating their own electric power. In organisation for decades, even creating the Hydro to environmental planning, 1914, the Tasmanian Government bought multi-generational Hydro families. revegetation and site restoration. Some of a small electricity company in financial Hydro’s technical expertise was diverted difficulty and created the Hydro-Electric During the 1950s, insatiable demand into international consulting. We explored Department. The first power station at stretched electricity supplies to the limit. alternatives to hydropower and developed Waddamana in the Great Lakes area was Severe drought that began in the late 50s wind farms in Tasmania. opened in 1916. saw power restrictions introduced, new developments proposed and construction In mid-1998, the Hydro-Electric By the 1920s, hydro-electric power was taking place through the 60s. The drought Commission was disaggregated into revolutionising Tasmanian farms, mills, broke in 1968 and a major development three government-owned businesses: mines and factories, but electricity was was planned for the Gordon River, which Hydro Tasmania (power generation), not yet widely available for household would later spark Tasmania’s greatest Transend Networks (transmission) and use. Constantly growing demand for environmental conflict. Aurora Energy (retail and distribution). power kept pressure on the construction The 70s and 80s saw growing controversy Tasmania entered the National Electricity program through the 1930s, but equipment, Market in 2005 and the Basslink materials, expertise and labour became over the flooding of Lake Pedder and plans for the Lower Gordon scheme. Saving the interconnector was commissioned in scarce and progress slowed during the Great April 2006. Depression and the Second World War. Franklin River became a national political issue. Ultimately, work on the scheme ended 1915 1917 1919 1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 1914 1916 1918 1920 1922 1924 1926 1928 1930 1932 1934 1936 1938 1940 1942 1944 1946 1948 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 The present Since our first hydropower development, Our business operations are built on Hydro Tasmania has been a leader in its the principles established in our field. We have grown to become Australia’s Sustainability Code. largest generator of renewable energy and the nation’s largest water manager. This report is about our present activities We currently employ over 1100 people and what matters to our stakeholders. locally, nationally and overseas with assets Find out more: worth more than $5 billion. Hydro Tasmania hydro.com.au Our business operates as an integrated Momentum Energy momentum.com.au entity through three brands: Entura entura.com.au Hydro Tasmania (generation), Momentum Energy (retail) and Entura (consulting services). We own and operate an advanced hybrid off-grid power system on King Island, off the north-west coast of Tasmania and own 25 per cent of a wind farm company with 308 MW of installed capacity. 2 Annual Report 2014 Hydro Tasmania 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 Failure to keep upwiththeneedsof keep to Failure andsoldinAustralia. delivered generated, poweris theway alter which willforever ‘revolution’ inagrowing needs haveresulted