Hydro Tasmania says it expects a loss of $90 million for the current financial year as a result of record low inflows from September 2015 to April 2016 and the six-month outage of its Basslink transmission cable.
“The period in question was very dry by any reckoning,” Chairman Grant Every-Burns told the Public Accounts Committee of the Tasmanian Parliament. “Within that same period the Basslink cable failed. The consequences of this failure were magnified by a repair time amounting to 176 days against our prior expectation of 60 days.”
As a result, Every-Burns said, “This year’s profit will be eliminated and a loss of $90 million is expected.” Although most of the impact of responding to the “energy supply challenge” will occur in the current financial year, some cost will be carried over to 2016-2017, Every-Burns said. He indicates Hydro Tasmania intends to build storages and target a break-even or small positive financial result next year.
Chief Executive Officer Steve Davy said “The financial impact was the result of foregone generation and related inability to produce large-scale generation certificates, lost electricity sales, the increased cost of generation for electricity sold and a range of other costs associated with the low inflow/Basslink situation.”
Before the heavy rainfalls in May and early June, Hydro Tasmania calculated that the extended dry would result in a shortfall of about 2,025 GWh compared to normal yield. Replacement generation comprised 900 GWh of Basslink imports, 745 GWh of gas generation, 325 GWh of load reduction and 55 GWh of diesel generation. Hydro Tasmania estimates that the net cost of responding to the energy supply challenge is between $140 million and $180 million.
These results compared with a profit of $62.3 million for 2014-2015.