The Queensland state-controlled utility CleanCo has written off the entire value of its 385MW Swanbank E gas-fired power plant to zero and expects to receive net losses from operating this power station until its expected retirement in 2036.
CleanCo wrote off the A$35.45mn ($27.2mn) value of Swanbank given increased power generation from renewable sources, reduced electricity demand as a result of Covid-19 and lower gas prices, according to the financial audit report Energy 2020 released by the Queensland Audit Office, which is part of the Queensland state government.
"Due to declining electricity prices, forecasted revenues will not be sufficient to cover the increasing costs to operate the power station. CleanCo expects to earn net losses from running this power station until its expected retirement in 2036," said CleanCo.
Swanbank E was mothballed at the end of 2014 and brought back on line at the end of 2017 with the Queensland government financing the plant's procurement of gas supplies.
CleanCo was not the only Queensland state-controlled utility to write-down the value of their thermal power generation plants. Stanwell and CS Energy wrote-down the value of their coal fired plants with Stanwell incurring a A$720mn write-down, which equates to 19pc of its total assets value and CS Energy incurring a A$353mn write-down of its coal-fired plants or 15pc of total asset value, the financial audit report said.
"Although Stanwell and CS Energy decreased the value of their coal power stations, they expect them to remain profitable until their scheduled retirement over the next 26 years," the report said.
The write-downs of power generation assets by the Queensland state-controlled utilities join other power generators that have taken a write-down on their generation assets.
Australian utility and gas firm AGL Energy wrote-down the value of its gas assets by a pre-tax A$231mn ($176mn) to A$407mn because of the impact of environmental restoration provisions. It also wrote-down the value of its power generation assets, which include gas- and coal-fired as well as renewable energy plants, by a pre-tax A$3.33bn to A$5.21bn.
Gas-fired power generation fell to a 15-year low in eastern Australia's national electricity market in October-December, partly because of an increase in power generated from renewable sources, which lowered wholesale power prices over the same period.
