Carbon tax, higher output deliver record $238m for Hydro
The carbon tax has been good for at least one power generator, with Hydro Tasmania forecasting continued strong earnings - at least until the carbon tax is axed.
The new Coalition government has vowed to remove the carbon tax, although the timing is still uncertain with the necessary legislation yet to be finalised.
In the year to June, Hydro Tasmania more than doubled its pre-tax profit to a record $238 million, as it benefited from the carbon tax and higher output, with a rise in the volume of electricity sold on the mainland.
Hydro Tasmania benefited from the increase in the wholesale electricity price after the introduction of the carbon tax, which contributed $70 million to its bottom line.
Its Momentum sales arm, which has carved out a large position in the mainland retail electricity market, boasted revenue of $800 million and contributed $17 million to group profits in the year.
Chairman David Crean said the company would generate returns of more than $450 million to the state over the next two years.
In the present financial year, the business will return an estimated $263 million to the Tasmanian government, which includes a dividend of $116 million. This is up from $125 million, including a $51 million dividend.
The outlook for the year ahead is more uncertain due to lower electricity demand, and the question over carbon pricing, it said.
On June 1, Hydro Tasmania took control of the Tamar Valley gas-fired power station and is pursuing plans for a large 600-megawatt wind-powered power station on King Island, in the Bass Strait.
This project would involve as many as 200 turbines being built.