ANNUAL REPORT 2021-22
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ANNUAL REPORT 2021-22
ANNUAL REPORT 2021-22
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Directors' report
The directors present their report together with the financial report of Power Generation
Corporation (the Corporation) for the year ended 30 June 2022 and the Auditor's report thereon.
This report is to be read in conjunction with the financial statements of the Corporation.
Directors
The following persons were directors of the Corporation during the financial year and up to the date of this report, unless otherwise stated:
Mr Dennis Bree (Chair)
Ms Christine Charles
Mr Richard Galton
Non-executive Director
Non-executive Director
Non-executive Director
The number of directors' meetings (including meetings of committees of directors) and the number of meetings attended by each of
the directors of the Corporation during the financial year are:
Board
Audit & Risk
Committee
People, Safety &
Environment Committee
Meeting attendance
Held
Attended
Held
D Bree
C Charles
R Galton
Principal activities
Attended
Held
Attended
12
12
4
4
3
3
12
12
4
4
3
3
12
12
4
4
3
3
The principal activities of the Corporation are to safely, reliably
and efficiently generate electricity and to provide system stability
and associated services supporting the Northern Territory
Governments' transition to 50 per cent renewable energy by
2030 and net zero emissions by 2050.
Review of operations
The Corporation recorded a Net Profit After Tax of $16.9
million (2021: Net Profit After Tax $10.9 million). During the
financial year, the Corporation invested $47.3 million (2021:
$42.2 million) in its capital investment program.
Overall profit is consistent with the previous year as the
Corporation continues to benefit from increased efficiencies
and through process improvements and continued tightly
managed costs.
The Corporation's operations are subject to environmental
regulations under Commonwealth and Territory legislation.
The Board believes that the Corporation has adequate systems
in place for the management of its environmental requirements
and is not aware of any breach of these environment
requirements as they apply to the Corporation.
Significant changes in the state
of affairs
There were no significant changes in the state of affairs of the
Corporation during the financial year.
Going concern
The policy environment supports and accelerates the expected
increase in penetration of renewables through government's
target of 50 per cent renewable by 2030 and net zero emissions
by 2050.
Territory Generation's role through this transition will be to
ensure our generators are available and reliable while keeping.
the costs of transition as low as possible.
The Corporation has carried out an assessment of the going
concern assumption. This includes assessing:
(i) Forward cash flow projections
(ii) Funding sources
(iii) Compliance with debt covenants
(iv) The continuity of key customers and suppliers
(v) The impact of current economic conditions
(vi) Forward forecasts and budgets
For the year ended 30 June 2022, the Corporation recorded a Net
Profit After Tax of $16.9 million compared to a Net Profit After Tax
of $10.9 million for the 2020-21 financial year. The Corporation
is forecast to continue to make profits over the next 4 years as
reported in the Statement of Corporate Intent 2022-23.
All debt maturing in 2021-22 and in subsequent years of the SCI
period is anticipated, to the extent required, to be replaced by
new long term debt.
Based on the above assessment performed, there are no
material uncertainties that casts significant doubt about the
Corporation's ability to continue as a going concern. The
Corporation continues to work towards being sustainable and
has the continued support of its sole shareholder, the Treasurer.
Accordingly, the financial statements have been prepared on a
going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and settlement of
liabilities in the ordinary course of business.
Dividends
The Corporation declared and paid a dividend of $5.43 million
during the financial year.
Since the end of the financial year, the Directors have declared
a dividend of $8.47 million (2021: $5.43 million) to be paid by
24 November 2022.
Future developments
The Corporation continues to contribute to the development
of the Interim Northern Territory Electricity Market (I-NTEM)
arrangements. Consultations continue on the structure of
the electricity market, as well as reliability standards and
ancillary charges.
The continuous growth in solar penetration continues to impact
the Corporation's business as the use of solar energy in most
of the major markets reduces market share. The Corporation
continues to supply the majority of essential services to the
system, potentially leading to increased costs per megawatt hour
if overheads are absorbed over a smaller market.
The Corporation has commenced periodic reviewing of strategy,
with a focus area being renewable generation, particularly in
relation to the Darwin-Katherine power system, with a view to
identifying how the Corporation will support the Governments
objective to achieve 50% Renewable generation by 2030.
In May 2020, the Northern Territory Government announced
that the Corporation will deliver a large-scale battery for
the Darwin-Katherine Interconnect System. In addition to
contributing to the 50% renewable target, the major benefits
of this project will include increased stability and reliability of
power supply and reduced carbon emissions for the Northern
Territory. The project is progressing well and is expected to be
operational in mid 2023.
Plans to close Ron Goodin Power Station have been delayed
to ensure system security and reliability in the region. Critical
maintenance activities deferred as part of closure planning have
been completed.
In 2020-21, the Corporation made it's first investment into our
future energy fleet in the Darwin-Katherine region and will see
smaller, modular and more flexible and renewable fuel capable
gas turbines introduced to Channel Island Power Station.
Significant stakeholder engagement, supporting studies and
other enabling works towards the Yulara Power Station energy
transition initiative have continued during 2021-22. The program
will transition power generation in Yulara to a greener and more
sustainable supply.
In Alice Springs, building works began in June 2021 for a new
single circuit transmission line and substation for a contractor.
Construction was completed in early 2022, with energisation
and commissioning planning well progressed.
Apart from the above, there are no developments affecting
the operations of the Corporation that, in the opinion of the
directors, are likely to significantly impact the Corporation during
future financial years.View entire presentation