❓ Mr. Nalder questions the Premier about Synergy's $650 million loss, attributed to factors like increased fixed costs, renewable energy uptake, and changing market conditions. The Premier refers to the Energy Minister's explanation, framing it as an accounting decision preparing Synergy for the future.
AnsweredQoN 844Legislative Assembly
QuestionView source ↗
SYNERGY — 2018–19
ANNUAL REPORT
844. Mr D.C. NALDER to the Premier:
Before I ask my question, on behalf
of the member for Darling Range, I would like to acknowledge students and
teachers from Byford Secondary College who are in the chamber today.
Can the Premier explain to the house
how the McGowan Labor government managed to lose $650 million from state-owned
energy company Synergy?
ANNUAL REPORT
844. Mr D.C. NALDER to the Premier:
Before I ask my question, on behalf
of the member for Darling Range, I would like to acknowledge students and
teachers from Byford Secondary College who are in the chamber today.
Can the Premier explain to the house
how the McGowan Labor government managed to lose $650 million from state-owned
energy company Synergy?
AnswerView source ↗
I thank the member for the question.
I think the Minister for Energy set out the situation quite well earlier today
when he explained Synergy's annual report to the house. I will read it
out again so the member understands the circumstances that have occurred. I quote
—
The factors that have contributed to
Synergy reporting an impairment loss are not unique to the Western Australian
electricity sector. EnergyAustralia and Infigen Energy are two companies that
have also recently reported very substantial impairments. In Synergy's
case, the impairment of assets is a result of the business facing increased
fixed costs predominantly across its generation operations, increased regulated
network charges, some long-term power purchase agreements that no longer
reflect current market conditions and other costs that are becoming clearer as
the energy landscape changes dramatically. The exponential year-on-year
increases of rooftop solar uptake, paired with increases in large-scale renewable
generation, decreases the demand for electricity generated from Synergy's
baseload assets.
More than one in four households in Western
Australia have installed rooftop solar systems. Although this provides benefit
to those households and the environment, generating enormous amounts of clean
energy comes at a significant cost through the price paid per unit exported to
the grid, and the cost of the depreciating value of the generating assets.
And so on and so forth. The member
can read the statement by the Minister for Energy. I think it sets it out very
clearly. This is largely an accounting decision that is preparing Synergy for
the future.
I think the Minister for Energy set out the situation quite well earlier today
when he explained Synergy's annual report to the house. I will read it
out again so the member understands the circumstances that have occurred. I quote
—
The factors that have contributed to
Synergy reporting an impairment loss are not unique to the Western Australian
electricity sector. EnergyAustralia and Infigen Energy are two companies that
have also recently reported very substantial impairments. In Synergy's
case, the impairment of assets is a result of the business facing increased
fixed costs predominantly across its generation operations, increased regulated
network charges, some long-term power purchase agreements that no longer
reflect current market conditions and other costs that are becoming clearer as
the energy landscape changes dramatically. The exponential year-on-year
increases of rooftop solar uptake, paired with increases in large-scale renewable
generation, decreases the demand for electricity generated from Synergy's
baseload assets.
More than one in four households in Western
Australia have installed rooftop solar systems. Although this provides benefit
to those households and the environment, generating enormous amounts of clean
energy comes at a significant cost through the price paid per unit exported to
the grid, and the cost of the depreciating value of the generating assets.
And so on and so forth. The member
can read the statement by the Minister for Energy. I think it sets it out very
clearly. This is largely an accounting decision that is preparing Synergy for
the future.
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