Queensland taxpayers will never profit from coal fired generators

9 June, 2021: The coal-fired power stations owned by the Queensland Government’s Stanwell and CS Energy will never make a profit again after 2023-24. These are the latest findings of a report released today by the Queensland Conservation Council, forecasting the future generation, costs and revenues of Stanwell and CS Energy.

Even with optimistic assumptions, the analysis shows:

• 2020-21 is likely the last year that CS Energy makes an operating profit. This is before the rebuild costs at Callide C4, or the costs of lost generation across all the Callide units  since 25 May. 
• Stanwell’s larger generation portfolio, bigger retail presence and coal revenue sharing arrangement will likely keep it profitable to 2024-25, but with decreasing profits. 
• After 2023-24, Stanwell and CS Energy combined will likely make an operating loss, meaning the Queensland Government as shareholder would have to absorb these losses and prop up the coal fired power stations. 

“The Queensland Government can no longer rely on its coal power stations to bring in revenue. Their profitability is tanking and creating a giant budget black hole,” said Queensland Conservation Council Director, Dave Copeman.

The report finds that increasing renewable energy generation from rooftop solar and large-scale wind and solar is continuing to push prices down and displace coal generation. This was evident before the explosion at Callide C4. 

The explosion at Callide C4 and subsequent power outage illustrated the vulnerability of Queensland’s electricity system to a single incident, which pushed up average wholesale prices in 2020-21 by $10/MWh, and may have long term price impacts. 

Beyond 2025, things look even grimmer for CS Energy and Stanwell. Not only will renewable energy continue to grow but more maintenance costs will pile up for Stanwell, and their long-standing coal revenue sharing agreement with resources company Coronado will end. 

The Queensland Government’s 2021-22 budget will be released on 15 June. Queensland Conservation Council’s Director Dave Copeman says that this is an opportunity for the government to acknowledge that coal power no longer stacks up, and start planning the electricity grid of the future. 

The full report is available here.