Leading Western

Australia to a sustainable
energy future

Annual Report 2023

Statement of
compliance
For the year ended 30 June 2023

To the Hon. Bill Johnston MLA, Minister for Energy

In accordance with the provisions of the Government

Trading Enterprises Act 2023 (Act), I hereby submit for
your information and presentation to Parliament, the
2023 Annual Report of the Electricity Generation and
Retail Corporation, trading as Synergy.

Michelle Shepherd
Chair

About
The 2022-23 Annual Report is a review of
Synergy’s performance for the financial year ended
30 June 2023.

The objective of this report is to provide our

customers, community and stakeholders, and our
owner, the Western Australian Government, with
information about our operational and financial
performance for the 2022-23 financial year.

To view this report online scan the QR Code.

To provide feedback on this report, please email

[email protected]
Acknowledgement Climate change
of Country commitment
We acknowledge the Traditional Owners of the Land At Synergy, we are committed to working together
on which we operate and their continuing connection towards a climate-resilient and prosperous lower
to the land, water and community. We pay our carbon future for our communities.
respects to all Aboriginal and Torres Strait Islander
communities, their cultures and to Elders past, present We acknowledge the scientific consensus on
and emerging. anthropogenic climate change and the need for a
transition to a net-zero carbon society.

In 2022, we reviewed our long-term corporate

strategy to reflect this commitment and
transformation to a sustainable future in an evolving
and complex new energy market.

Through both current and future projects, we will

support the State Government’s aspiration of net-zero
greenhouse gas emissions by 2050.

Synergy will continue to explore cleaner and smarter

ways to make, store, use and trade energy as we
move towards an intelligent energy future.

The front cover photo represents Western Australia’s

ongoing energy transformation. At the forefront are our
people in front of the Kwinana Battery Energy Storage
System, the first big battery, located at Kwinana-
Cockburn Power Station site. The imposed photo dates
back to the 1980s and captures the now decommissioned
coal-fired Kwinana Power Station.

SYNERGY 2023 ANNUAL REPORT 1

 An
illustrative
journey
Come on a journey with us and explore who we
are, what we do and where we are going. We are
committed to making a positive contribution to
Western Australia, our people, the economy, the
environment, local communities and stakeholders.

We invite you to explore this in an illustrative format

in this year’s Annual Report.

2 SYNERGY 2023 ANNUAL REPORT

SYNERGY 2023 ANNUAL REPORT 3
Contents

Chair report 6
CEO report 8
Executive team 10
We are Synergy 14
Synergy in a snapshot 15
Financial overview 18
Synergy’s corporate strategy 20

Operations 25

Coal generation 27

OPERATIONS
Gas generation 28
Renewable generation 33
Our customers 40

Social and
community impact 47

Our environment 49
Our health and safety 54
COMMUNITY

Our people 61
SOCIAL AND
IMPACT

Our community 62

Directors’ report 73

Financial report 91

SYNERGY 2023 ANNUAL REPORT 5

Chair’s
report
It was a privilege to be appointed Chair of the
Synergy board in May 2023.

I would like to acknowledge and thank Robert Cole,

who served as the Chair for more than five years and
made a significant contribution to the organisation.

I have joined during a time of rapid change in the

organisation, and the industry. In my 20 years in the
private and public sectors of Australia’s electricity
and gas markets, I have never been more excited
about the future of the energy industry than I am now.
There are enormous challenges and opportunities for
Synergy as we work to meet the State Government’s
target of 80 percent reduction in our emissions,
from 2020 levels, by 2030. A large amount of work
is underway to increase our portfolio of renewable
assets by building and acquiring wind farms and
developing more firming technology.

In the years ahead this transition will present some

unique operational challenges. Synergy’s site at
Kwinana continues to be a microcosm of the energy
transition; the demolition of an old coal-fired plant,
operating a large gas generation facility and the
construction of commercial sized batteries are all
taking place on one site concurrently. This requires
us to be diligent and thorough in our commitment to
safety, an area I am passionate about.
Our new safety strategy sets clear objectives for To that end, Synergy has established a dedicated
the financial year 2023-2024 ensuring we deliver team to work closely with the most vulnerable
excellence in safety across our people, operations and members of our community. This team have a
assets. We launched our organisation-wide safety personalised approach designed to best support the
leadership training series, with a comprehensive individual challenges of our customers and do an
three-part course aimed at understanding the exceptional job, often identifying customers (financial
fundamentals of risk management, personalising risk or otherwise) at risk and connecting them with other
and increasing understanding of psychosocial risks. support services and charities.
We all have a role to play in creating an exceptional
place to work; the wellbeing of our people is at the The Fresh Start program is one example, designed to
forefront of everything we do. remove barriers preventing recovery from a domestic
violence situation, including ensuring victims’
To successfully deliver such critical work it is electricity is not disconnected, consideration of debt
essential we attract the best talent that accurately waivers and additional incentives.
represents the community that we serve. An exciting
part of Synergy’s diversity, equity and inclusion Synergy continues to invest in programs and
commitment is our employment initiatives to initiatives that drive sustainable outcomes for people
recruit and develop candidates with a diverse lived and communities. The State’s transition away from
experience. This includes partnering with Disability coal-fired generation by 2030 makes this work
Employment Service provider and NDIS provider, even more important. The organisation’s Workforce
EDGE Employment Solutions, which specialises in the Transition program is considered world-leading and
placement and support of candidates with disability as the adoption of renewables accelerates globally,
into the workplace. we know the industry will continue to look to Synergy
for leadership in this space. Our commitment to our
The organisation is focused on improving impacted workforce over the next five to seven years
engagement with Aboriginal and Torres Strait Islander is unwavering and we will continue to raise the bar in
communities and people, through our Innovate this area by listening to our people and adapting to
Reconciliation Action Plan (RAP) and is uniting with the changing energy landscape.
South Metropolitan TAFE to offer several Aboriginal
and Torres Strait Islander candidates traineeship I extend my thanks to my fellow board members who
employment pathways with Synergy. demonstrate their constant commitment, guidance
and collaboration.
Synergy is in the early stages of this journey but I am
energised by the passion of those I work with and am It’s important to recognise the hard work of CEO,
excited to bring my experience and skills to accelerate David Fyfe, the executive leadership team and all our
our work in this area. employees and contractors across our seven sites
during this incredibly busy 12 months for Synergy.
Some notable achievements from the financial year I would like to thank the State Government and in
2022-23 which I was excited to witness include the particular the Minister for Energy, I look forward to
energisation of the Kwinana Battery Energy Storage working with them closely towards our shared goal of
System (KBESS1), the approval of a second 200 MW 80 percent reduction in emissions by 2030.
battery at Kwinana (KBESS2) and a 500 MW Battery
Energy Storage System at Collie. As we embark on There are many challenges ahead, but with that
these new battery projects, there are key lessons comes the opportunity to learn, innovate and
from our development and construction work on ultimately create a better energy system and a better
KBESS1 that will inform our approach to achieving Western Australia.
best practice.

Synergy also evolved its corporate strategy in the

financial year 2022-23, introducing a new social value
pillar. Social value is Synergy’s positive contribution
to Western Australia and its people. Supporting our Michelle Shepherd
customers is a key part of this. Chair

SYNERGY 2023 ANNUAL REPORT 7

Chief Executive
Officer’s report
This year has been one of transition for Synergy.
In early 2022, we evolved our corporate strategy,
charting a new course for a more sustainable
Western Australia.

The updated strategy takes into account what

is changing externally and sets out our strategic
ambition beyond 2030. It outlines our core plan, which
will see us replace our coal-fired power stations with
renewable energy generation and storage. It brings
our customers on the journey, enabling Western
Australia’s transition to net-zero carbon emissions
by 2050.

In 2023, the organisation’s focus has been on

delivering against our strategic objectives.

Synergy has a long history of investing in the future

of the State, its people and communities. Since its
original iteration in the 1960s, Synergy has continually
changed and reimagined its future for the betterment
of society, adapting to continue to be an international
energy leader.

I would like to personally thank former Synergy Chair,

Robert Cole and wish him the very best in his new
role. Rob retired from the position after five years and
his expertise and leadership have been invaluable
in supporting the organisation’s transformation over
the last 18 months. I’m pleased to extend a warm
welcome to our new Chair, Michelle Shepherd, whose
industry knowledge will be a significant asset as we
work towards our strategic ambitions and an 80
percent reduction in carbon emissions by 2030.

In 2023, Synergy achieved a major milestone, when

the KBESS1 facility was energised. The development
of a second battery is underway, next to KBESS1 at working towards best practice, including changing
Kwinana Power Station, which will be able to charge our approach to capturing critical information by
and discharge energy at a rate of 200 MW with 800 increased maintenance and construction work
MWh of energy storage - four times the size of KBESS1. hours. This change has resulted in a recordable injury
frequency rate (RIFR) of 4.94 percent.
In addition to the Kwinana batteries, in April 2023, a
500 MW Battery Energy Storage System at Collie was Our customers are at the forefront of everything we
announced. The Collie battery, which is expected to do and we continue to develop products that will
be operational by the end of 2025, will be at 2,000 support them and their diverse needs. Community
MWh of storage. The commercial-sized batteries will Energy is a new residential tariff, offering the first 10
help stabilise the electricity system and optimise the units kilowatt hours (kWh) of electricity at zero charge
performance of our renewable energy assets. between 9am and 3pm each day during the super
off-peak time period. This product is designed to
We have made exciting progress on expanding support more vulnerable customers and is available
our suite of wind farms by receiving development to those on a hardship program or identified as
approval for the King Rocks asset near Hyden. At the experiencing financial hardship.
wind farm, some of the largest turbines in Australia
will be installed, each with a capacity of I refer to the outcome on 7 November 2022, of the
up to 7 MW, with up to 150m tall towers and 90m Economic Regulation Authority’s (ERA) application to
long blades. the Electricity Review Board (ERB). Synergy breached a
Wholesale Electricity Market (WEM) rule in 2016 to 2017,
As we shift away from coal fired generation to this was not deliberate. This contravention did not
renewables, we remain an active participant in directly impact the cost of electricity for residential
supporting the Collie community through our customers. In Western Australia the price of electricity
world-leading transition program, the Collie Small for households is set by the State Government.
Grants Program, and partnering in initiatives such Synergy acknowledges the settlement with the ERA,
as the Collie Art Prize, the Collie River Mountain Bike which led the ERB to conclude proceedings. We look
Marathon and the Collie Labour Day Festival. forward to working constructively with Energy Policy
WA (EPWA) and the ERA to reform the regulatory
Our evolved corporate strategy includes a new social
regime to ensure that market participants can receive
value pillar which is the legacy we leave behind for
adequate compensation in the future.
future generations. One way we do this is through our
Community Investment Program. In 2022, as part of Synergy’s financial year result for 2022-23 was a net
our Community Investment Program we launched our loss before tax of $732.6 million, which compares to
Community Giving Fund. a net loss before tax of $429.0 million in the previous
year. The net loss in 2022-23 is predominantly due
Through our Community Giving Fund, we support
to onerous contracts of $773.7 million, where the
programs and initiatives that drive sustainable
unavoidable costs of meeting the obligations under
outcomes for people, communities and the
the contract exceed the economic benefits received
environment. In 2022, we awarded almost $70,000
under the contract. Excluding for these onerous
to community organisations, charities, and not-
contracts, a net asset impairment write back of $77.1
for-profits, who make a positive impact on the
million and the settlement of ERA proceedings of $30
communities in which we operate.
million, our reporting concludes an underlying net loss
When I commenced the CEO role in February 2022, before tax of $6.3 million.
I prioritised investment in the areas of inclusion
I would like to thank our Chair, Michelle Shepherd
and diversity. I am a member of the Champions of
and the board of directors for their commitment and
Change Coalition and CEOs for Gender Equity and
engagement, and the Hon. Bill Johnston MLA, Minister
am committed to driving gender equity outcomes
for Energy and his office for their support, during this
at Synergy. We now have several female leadership
exciting time of change in Western Australia’s
programs underway, increased parental leave
energy industry.
entitlements and have a 50 percent gender balance
across our leadership team. We have achieved a
lot in the past 12 months. By setting targets, making
changes and continually adapting our approach, we
will continue to make great strides in this space.

As a people first organisation, safety on all sites is David Fyfe

our priority. We are lifting our standards and Chief Executive Officer

SYNERGY 2023 ANNUAL REPORT 9

 Left to right:

Jonathan Cowper
Chief Financial Officer

Executive Melanie Brown

Executive General
Manager Trading &
Lesley Walker

Leadership
Executive General
Governance Manager Customer
Angie Young Kurt Baker

Team
Executive General Executive General
Manager Thermal Manager Future Energy
Generation
Gary Peel
Tiri Sanderson Chief Information Officer
Executive General
Manager People, David Fyfe
Strategy & Social Value Chief Executive Officer

10 SYNERGY 2023 ANNUAL REPORT

 Be enlightened
‘Be enlightened’ stories relate to pillars
of our corporate strategy and key
performance indicators.
Throughout this report you will find stories
demonstrating our corporate strategy in action.
Look for the symbol to be enlightened.

30 32 34

Preparing our generation fleet We are retiring and rehabilitating We are leading the
for the future charge in WA

36 38 44

We are creating wind projects We are building storage in We are enabling local
for the future our community government to transition to lower
net carbon emissions

12 SYNERGY 2023 ANNUAL REPORT

 45 56 58

We are helping We are fostering diversity We are developing future

households that are vulnerable to at Synergy energy professionals
financial hardship

59 60 64

We are preparing our people for We are transitioning Pinjar We are supporting our
future opportunities Power Station operations community

68 69 70

We are committed to building We are in partnership We are supporting Collie

energy education with the arts

SYNERGY 2023 ANNUAL REPORT 13

 We are
Synergy

We are proud to be Western Australia’s largest As part of this commitment to the Western Australian
integrated electricity generator and energy retailer. community, our coal power stations will be retired by
Our objective is to work together with more than one 2030, as we embark on a sensible, managed transition
million Western Australian household and business to a greater use of renewables, while ensuring
customers towards an intelligent energy future of electricity reliability and affordability.
safe, reliable, lower emissions power at the lowest
sustainable cost. To replace retired coal generation, we plan to install
410 MW (megawatts) of new renewable generation
We are on a journey towards a sustainable energy and 1,100 MW of new four hour storage (4,400
future. This journey will see us create renewable megawatt hours of storage).
energy and storage, and reduce carbon emissions.
Throughout this transition, we are committed to
Across Western Australia, millions of people rely on helping our customers better manage their energy
Synergy to live, work and play. People are at the use and contain their costs, without compromising the
core of everything we do and we are dedicated to provision of reliable energy.
helping them access affordable and efficient energy
solutions, make empowered decisions about energy Synergy is a people-led organisation, the health,
management and navigate Western Australia’s safety and overall wellbeing of our staff and
changing energy landscape. contractors is at the forefront of everything we do.

Our purpose is clear – to lead

Western Australians to their
intelligent energy future.

14 SYNERGY 2023 ANNUAL REPORT

Synergy
Snapshot

1,069,970 104,618 939

RESIDENTIAL CUSTOMERS BUSINESS CUSTOMERS EMPLOYEES

6,562 GWh 756 GWh 13,661 GWh

TOTAL TOTAL ENERGY GENERATION TOTAL CUSTOMER
ENERGY GENERATION FROM RENEWABLES ENERGY USAGE

Note: Residential 4,596 GWh,

Business 4,299 GWh

13 26 7
STORAGE ASSETS GENERATION ASSETS RENEWABLE ASSETS

Note: Includes Bright Energy Investment

(BEI) in which Synergy have an interest
 Powering our
community

Western Australia

GERALDTON
Greenough River BEI
Mungarra KALGOORLIE
South West
Interconnected Warradarge BEI
System
Coolgardie
Alkimos Pinjar
Coal-fired
power station
PERTH
Wind farm
Cockburn
Gas turbine Kwinana
Collie
Battery Muja

Solar Margaret River

EV charging stations Manjimup

BEI – Bright Energy Investments Walpole

ALBANY Grasmere BEI

16 SYNERGY 2023 ANNUAL REPORT

 Financial
overview
The broader Wholesale Electricity Market (WEM)
experienced higher energy prices during the
financial year, reflecting changes to availability and
dispatch of market participants, and increased costs
to generate electricity due to higher input costs
Synergy achieved underlying revenue growth of 2.6 including fuel and maintenance.
percent during the financial year despite increasing
levels of rooftop solar reducing average household Synergy recorded a statutory net loss before tax of
electricity demand. Electricity sales were impacted $732.6 million for the financial year 2022-23. This
by weather conditions over Autumn and Winter has been driven by non-cash provisions with higher
increasing heating requirements, including the coldest future-year expenditure requirements and other
June since 1973. economic factors such as increased CPI forecasts.

Revenue ($M) Underlying EBITDA ($M)*

$3,356 $3,442

$301.5
$3,058
$2,990
$2,841

$165.0

$117.5 $124.9

$71.6

FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23

Underlying net profit / $192.5

Statutory net profit / (loss) before tax ($M) (loss) before tax ($M)*

($27.2)

($263.5)
$3.2

($429.2) ($5.4) ($6.3)

($27.2)

FY19 FY20 FY21 FY22 FY23

($656.9)
($732.6) *Underlying excludes the impacts arising from provisions
FY19 FY20 FY21 FY22 FY23 for onerous contracts $773.7 million, other expenses of $30.0
million related to the Customer Offset for Synergy Compliance
Breach, reversal of impairment of non-current assets of $77.1
million and share of profit from joint ventures of $0.3 million.

18 SYNERGY 2023 ANNUAL REPORT

The changing
energy landscape
The business case for two additional large-scale
Muja Power Station’s Unit 5 was removed from service storage projects, the Kwinana Battery Energy Storage
in October 2022. Whilst no large-scale generators System 2 (KBESS2) and the Collie Battery Energy
commenced operations during the financial year, the Storage System (CBESS), reached final investment
journey towards developing new power infrastructure decision during the year, with funding provided by the
to support decarbonisation of the South West State Government to commence construction. These
Interconnected System (SWIS) progressed at pace. two projects provide 700 MW of energy capacity with
2,800 MWh of energy storage.
Synergy’s first large-scale storage project, the
Kwinana Battery Energy Storage System (KBESS1), Additionally, five Western Australian EV Network
reached the operational testing phase during the charging stations commenced operations during
financial year and provides 100 MW of energy the financial year. The initiative is part of the State
capacity with 200 MWh of energy storage. Government’s Electric Vehicle Action Plan.

SWIS generation (GWh) SWIS generation mix (%)

17,366 17,626 17,485 17,782

17,238 12%

13%

20%

23%

23%
3,786
4,124
2,263

3,552
1,999

6,890
8,906

8,252

6,962
9,372

39%

39%
51%

53%

47%
6,562
6,696
6,461

5,681
5,991

34%

38%

38%
32%
37%

FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23

Synergy Synergy
Other generators thermal Other generators thermal
Other generators renewable Other generators renewable

Electricity sales (GWh) Generation fuel mix (%)

13,686 13,661
12,222 12,112 12,224
24%
23%

25%

26%

47%
3,945
3,892
3,085
3,258
3,670

8,854
8,552

9,794
9,139

9,716

53%
74%
75%

76%
77%

FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23

Retail Gas-fired
Wholesale Coal-fired

SYNERGY 2023 ANNUAL REPORT 19

 Synergy’s
corporate
strategy
evolution
Synergy’s corporate strategy sets out the long-term
goals and direction for the entire organisation.

Since the launch of Synergy’s previous corporate

strategy in 2020, societal expectations and
Government outlook regarding the energy sector
have changed significantly.

Support for green and sustainable economies

continues to grow globally.

These changes present new strategic opportunities

for Synergy to deliver on its purpose of leading Social value will be
Western Australians to their intelligent energy future.

CEO David Fyfe, executive team members and the

the legacy we leave
board, supported by key subject matter experts,
considered future ambitions and reorientated the
behind for future
organisation towards a new strategy. Customers’
needs are changing and to be successful, Synergy
generations.
must continue to evolve and adapt to meet the needs
of over one million Western Australians. These four pillars underpin the strategy and the
actions of the organisation. They balance decision
The outcome of this work is an evolved corporate
making and support Synergy in achieving its purpose.
strategy for Synergy. This new strategy sees the three
strategic pillars of customer centric, solutions focused Synergy’s new corporate strategy sets out a core plan
and proactive organisation, joined by a fourth pillar: that sees us through the retirement and replacement
social value. Social value is the organisation’s positive of coal-fired power stations with renewable energy
contribution to society, its people, the environment, generation assets and storage. At the same time, we
local communities and stakeholders. will work with the State’s transition to net-zero carbon
emissions and social value will inform our everyday
decision making.

We invite you to join us as we undertake this journey.

20 SYNERGY 2023 ANNUAL REPORT

 Synergy’s
corporate
strategy

Embed social
value to drive
better decision Be a proactive
making and adaptable
organisation
focused on value

Anticipate and
serve customer
needs
Quickly apply,
scale and
integrate energy
solutions
SOLUTIONS FOCUSED
CUSTOMER CENTRIC

SOCIAL VALUE

PROACTIVE

GUIDED BY OUR VALUES

Innovation Accountability Collaboration Trust

22 SYNERGY 2023 ANNUAL REPORT

 Customer
Social value
centric
Anticipate and serve Embed social value to drive
customer needs better decision making
Enable our customers to become greener Deliver an 80% reduction in carbon emissions
by 2030
Work with the market to educate customers
about green energy and develop products to Develop a framework to capture the full
meet their needs value our organisation delivers to customers,
communities and the environment
Continue to support our most vulnerable
customers through the energy transition Grow our portfolio of carbon offsets to enable us
to become a net-zero carbon emitter by 2050

Create a net positive outcome for our

communities impacted by the energy transition

Solutions
Proactive
focused
Quickly apply, scale and integrate Be a proactive and adaptive
energy solutions organisation focused on value

Retire our coal-fired power stations by 2030 to Transform our organisation and build capabilities
reduce our carbon emissions by 80%
Grow our relationships with key stakeholders and
Build 410 MW renewable and 1,100 MWh advocate for the electricity network we need to
storage assets support the energy transition

Continue to build our distributed energy Expand our development pipeline of renewable
resources (DER) capabilities to complement our and storage assets
growing renewable energy portfolio

Explore emerging storage technologies

and options, including pumped hydro
energy storage

SYNERGY 2023 ANNUAL REPORT 23

Operations
 OPERATIONS

Our Our total electricity

operations
generation was 6,562
GWh, 32% above target
of 4,961 GWh

32%
Our total generation
Availability Capacity
Factor* was 72%, 6.5%
below target of 78.5%

6.5%
The energy sector is undergoing a significant
transformation. Synergy is innovating and adapting
operations for the new market while continuing to
provide safe and reliable energy.

Energy generation and storage assets currently

include Muja and Collie coal-fired power stations, A record low operational
Cockburn, Pinjar, Kalgoorlie-Boulder and Mungarra load of 626 MW occurred on
gas-fired power stations and Kwinana battery 16 October 22

626
energy storage system. Synergy also has significant
renewable energy capacity in Western Australia’s Mid
West and Great Southern regions through our interest
in Bright Energy Investments (BEI). MW
Synergy’s total electricity generation was higher than
expected due to unpredictability in the market.
Number of
generation assets
In financial year 2022-23 our target was to deliver

24
4,961 million units of electricity. We exceeded this
target and delivered 6,562 million units of electricity.

Our total Availability Capacity Factor* was below the

target due to the return of Pinjar Power Station Unit 10
being delayed and the requirement for an extended
forced outage on Collie Power Station.
* Availability Capacity Factor is the fraction of maximum generation
that Synergy’s generation fleet could provide if only limited by outages
and deratings.

26 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

Coal
generation
Synergy owns and operates coal-fired generation at
Muja and Collie power stations.

The State Government announced its intention to

transition away from coal fired generation by 2030.
Collie Power Station is scheduled for closure in late-
2027. Muja Power Station is scheduled for closure in
late-2029.

Synergy is leading this initiative and has engaged a

third-party contractor to initiate the first phase of
closure planning for Collie Power Station. The scope
includes a collaboration to review the potential
closure options and their alignment to Synergy’s
strategic goals and identify any risks or opportunities
associated with these options. The scope also includes
preliminary forward works plan, which outlines the
next steps in the site’s closure process.

Total electricity Total electricity

generation at Muja generation at Collie
Power Station Power Station

2,723 GWh 742 GWh

Both demand and Coal generation

supply are becoming Availability Capacity
less predictable with Factor was 67.9%, 6.3%
variance often below target of 74.2%
exceeding

200 MW 6.3%

SYNERGY 2023 ANNUAL REPORT 27

 OPERATIONS

Gas
generation
Synergy owns and operates gas turbines
at Kwinana Power Station (Cockburn
Power Station), Pinjar Power Station, and
regionally at Kalgoorlie and Mungarra
Power Stations.

Synergy’s gas turbine fleet plays a

significant role in both the provision of
energy and a number of essential system
services in support of a reliable South
West Interconnected System (SWIS).

Synergy’s gas turbine fleet will continue

to support the SWIS as Synergy
and the State progresses with its
decarbonisation strategy.
Gas generation for
Kwinana Power Station

1,069 GWh

Total gas generation Gas generation at Gas Generation

across our four sites Cockburn Power Station Availability Capacity
Factor was 76.1%, 2.4%
below target of 78.5%

3,093 GWh 1,288 GWh 2.4%

Gas generation at Gas generation at Gas generation at
Pinjar Power Station Kalgoorlie Power Station Mungarra Power Station

725 GWh 4.47 GWh 5.50 GWh

28 SYNERGY 2023 ANNUAL REPORT

OPERATIONS
 OPERATIONS

Preparing our
generation fleet
As Western Australia’s largest electricity generator, Technical expertise minimises
Synergy is experienced in innovating to overcome
unplanned outage
challenges associated with the changing energy
landscape. On the 2023 Australia Day long weekend, Kwinana
Gas Turbine No. 3, located at Cockburn Power Station,
had an unplanned outage. This outage was due to
Coal shipping and blending in a high-pressure compressor casing failure which
summer 2023 required a supercore (gas turbine engine) changeout.

During the 2022-23 holiday period, Synergy received The unplanned supercore changeout was completed
an initial shipment of 50,000 tonnes of coal and then in 12 days, two days earlier than scheduled, even
in February 2023, the second and final shipment of with labour and other constraints within the market.
50,000 tonnes of coal was received. This outage was resolved earlier than scheduled due
to employee commitment, strong contract partner
The coal was blended with the existing coal supply to relationships and deep technical expertise
ensure its use does not compromise Synergy’s process within Synergy.
safety or unit operation. Synergy has developed
innovative methods to undertake this process. While the Kwinana Gas Turbine No. 3 was offline, the
opportunity was taken to complete some work that
will reduce future outage duration.

30 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

Cockburn Steam Turbine was

ready for summer
The Cockburn Steam Turbine needed an outage to
undertake major works, including a steam turbine
inspection, installation of a newly manufactured
steam turbine rotor and commissioning of the
steam turbine.

These major works were scheduled to commence readiness strategy. To combat this, Synergy worked
well before the summer period to ensure the unit was collaboratively with our contractors to ensure the
ready for summer 2021-22. Unfortunately, due to the essential repairs could be completed and the revised
COVID-19 pandemic, these works were delayed on schedule could be adhered to.
two occasions. Due to increasing operational risk,
Synergy decided the works could not be delayed The important milestone of motor roll and the
beyond the 2022 calendar year. Consequently, on 6 commencement of hot commissioning (gas turbine
October 2022, Cockburn Steam Turbine commenced coming back online) was achieved on 12 December
its 56 day outage. 2022. 56 days post discovery of the gas turbine
blade damage and only 10 days longer than typically
Internal inspection of the gas-fired steam (using a undertaken for a planned major inspection of the
borescope) discovered significant impact damage gas turbine.
on the first row of blades. This damage had a
significant effect on the outage, it more than doubled This was a major achievement and could not have
the employee/contractor hours and resources been realised without an innovative and collaborative
required, and consequently threatened our summer effort of our workforce to achieve summer readiness.

SYNERGY 2023 ANNUAL REPORT 31

 OPERATIONS

We are retiring and

rehabilitating for
the future
As Western Australia transitions to a renewable As part of this project a bespoke mast climber is
energy future, Synergy is in the process of being designed to help us deconstruct the two large
decommissioning, demolishing, remediating and chimney stacks on site. This mast climber, which
reusing the site of the old coal fired Kwinana can be adjusted to suit the stack diameter, is being
Power Station. engineered and fabricated in Spain and is expected
to arrive on site late 2023.
The Kwinana Power Station was shut down in 2015.
In 2016, the Kwinana Rehabilitation Project was The mast climber provides a working platform that
created to undertake the decommissioning and can be raised and lowered as required. Two mini
demolition of six retired coal, oil and gas-fired steam excavators will be positioned on the working platform
generating units. and will work to deconstruct the chimney stacks by
knocking brickwork down inside the stack itself. This
Over the past year, Kwinana Power Station approach is being used to improve safety and will
decommissioning has continued with the removal ensure the stacks are deconstructed in a manner that
of cladding and insulation from site structures and will have as little as possible impact on the site.
equipment. Demolition of some retired structures
including the old administration building and Stage C Phase 7 of the Kwinana Power Station
precipitators has occurred. decommissioning is due to commence in early 2024
and will involve demolition of the coal bunkers, boilers,
In financial year 2022-23, the construction of a new turbines and most of the turbine hall structure.
fire water pump station, gas generation operations
building (Kambarang) and water treatment plant
was completed.

32 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

Renewable
generation
Synergy is leading Western Australia’s sustainable
energy transition by delivering a pipeline of renewable
energy generation and storage assets throughout
the South West Interconnected System, supporting
customers on their decarbonisation journey.

In 2023 the Kwinana Battery Energy Storage System

(KBESS1) was energised. Construction on a second
battery energy storage system at Kwinana (KBESS2),
which will be able to charge and discharge energy at
a rate of 200 MW with 800 MWh of energy storage,
began in July.

In April 2023, a 500 MW/2,000 MWh Battery Energy Synergy Renewable Energy Developments Pty Ltd
Storage System at Collie was announced. The Collie (SynergyRED), a wholly-owned subsidiary of Synergy,
battery (CBESS), which is expected to be operational provides asset management services to BEI facilities
by the end of 2025, will be even bigger than KBESS2 and corporate support services to the BEI group of
both in terms of power and energy storage. companies. It also provides development services
(both renewable and storage) to Synergy, BEI and
The King Rocks Wind Farm near Hyden received Synergy’s contestable customers.
development approval in November 2022.
Synergy holds a 19.9 percent interest in BEI. BEI
In April 2018, Synergy partnered with Dutch operating facilities include the Greenough River Solar
Infrastructure Fund (DIF) and Construction and Farm (40 MW), the Albany Grasmere Wind Farm (35.4
Building Unions Superannuation (CBUS) to create MW) and the Warradarge Wind Farm (180 MW).
Bright Energy Investments (BEI).

Operational In development
Renewables: 255.4 MW Renewables: 230 MW

Storage: 100 MW/200 MWh Storage: 700 MW/2,800 MWh

by the end of financial year 2022-23
King Rocks Wind Farm: Up to 150 MW
Albany Wind Farm: 35.4 MW Delivery in second half 2025

Warradarge Wind Farm: Up to 108 MW Warrdarge Wind Farm: Up to 90 MW

Delivery in second half 2025
Greenough River Solar Farm: 40 MW
Kwinana Big Battery 2 (KBESS2): 200 MW/800 MWh
Kwinana Big Battery (KBESS1): 100 MW/200 MWh Delivery in 2024
Energised in April 2023
Collie Big Battery (CBESS): 500 MW/2,000 MWh
Delivery in 2025

SYNERGY 2023 ANNUAL REPORT 33

 OPERATIONS

KPI
Deliver Storage
Projects

We are leading the

charge in WA
Synergy is proud to say that Western Australia’s first The batteries will make our electricity system more
utility-scale transmission-connected battery project secure and facilitate the continued uptake of
has been energised, after commencing site works in renewables. The battery storage units will achieve
November 2021. this by soaking up excess solar energy during the day,
discharging energy in the evenings to offset the loss
The Kwinana Battery Energy Storage System (KBESS1) of solar generation at sunset, and using the ability
facility will provide 100 MW of energy capacity to charge and discharge large amounts of energy
and 200 MWh of energy storage to the South West rapidly to help dampen fluctuations in renewable
Interconnected System. electricity supply caused by clouds and wind.
In addition to this, a second Kwinana Battery The KBESS1 project delivers, in part, on our corporate
Energy Storage System (KBESS2) facility and a Collie strategy to build storage assets to replace coal-fired
Battery Energy Storage System (CBESS) facility were power stations.
announced in April 2023.
The past year has seen more than 2,700 m3 of
concrete foundations poured, over 70 km of electrical
cable laid, and more than 5,500 tonnes of hi-tech
equipment installed at the KBESS1 site.

34 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

KPI
Deliver Storage
Projects

The KBESS1 facility is a first-of-its-kind in the We are also building a second battery next to
Wholesale Energy Market. In collaboration with KBESS1 at Kwinana Power Station. This second battery,
national regulator Australian Energy Market Operator KBESS2, will be able to charge and discharge energy
(AEMO), our delivery partners Western Power, New at a rate of 200 MW with 800 MWh of energy storage,
Horizons Australia and subcontractor Genus Industrial four times the size of KBESS1.
Services, KBESS1 has helped pave the way for future
storage projects by building local Western Australian In addition to the Kwinana batteries, we are also
knowledge and capability in large-scale battery developing CBESS. The Collie battery will be the
storage systems. biggest government owned battery in Australia and
will provide 500 MW for up to four hours.
With the connection to the grid and the facility
substation now energised, the KBESS1 project has The batteries mark significant progress towards our
commenced commissioning and testing, progressively strategic objective of building 1,100 MW of energy
charging and discharging larger portions of the storage by 2030.
battery to ensure it meets all technical and regulatory
As part of our community engagement, Synergy
requirements. The facility is forecast to be fully
organises monthly tours to showcase the KBESS1
operational and trading in the market early
facility to interested stakeholders.
in financial year 2023-24.

SYNERGY 2023 ANNUAL REPORT 35

 OPERATIONS

KPI
Deliver New
Wind Projects

We are creating wind The 3,075 hectare site was selected due to its
proximity to Western Power’s 132KV transmission line

projects for the future and abundant overnight wind.

Studies undertaken included:

King Rocks Wind Farm received development Noise impact assessment

approval in November 2022 and will be built near Flora and fauna survey
Hyden in the Wheatbelt.
Visual impact assessment
The development approval is for up to 30 wind
Aboriginal heritage desktop assessment and on
turbines and 150 MW capacity, with the final size
Country survey
to be determined by network studies. The project is
expecting to install some of the largest turbines in Traffic and transport assessment
Australia, each with a capacity of up to 7 MW, with
Bushfire desktop assessment
up to 150m tall towers and 90m long blades.
Electromagnetic Interference (EMI) and shadow flicker
The wind farm is named after King Rocks, a large assessments
granite formation just a few kilometres south of
Aviation impact assessment
the site.
Environmental impact assessment
King Rocks Wind Farm will help Synergy meet its
strategic ambitions to retire our coal-fired power Throughout the development process, SynergyRED
stations and reduce carbon emissions by 80 has consulted with the Shire of Kondinin, landowners
percent by 2030. and neighbours.
Synergy aims to start construction in late 2023 and
it is anticipated that the wind farm will be producing
green energy in the SWIS by mid to late 2025.

36 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

The WA
Electric
Vehicle (EV)
Network
Synergy and Horizon Power are working with the
State Government to create Australia’s longest EV
charging network.

Announced in August 2021, the Western Australian

EV Network project will deliver a network of 98
EV fast charging stations across 49 locations in
Western Australia.

The Western Australian EV Network will extend

from Kununurra in the north, to Esperance in the

“
south and east to Eucla.

As of 1 July 2023, Western Australian EV owners

have spent over 14 days charging their EVs on the
Western Australian EV Network. This has saved
6.63 tonnes of carbon dioxide emissions.

The initiative is part of the State Government’s

There will be
Electric Vehicle Action Plan. It aims to boost EV
uptake in Western Australia and will help reach the
no more than
target of net-zero carbon emissions by 2050.
200 kilometres
between each
To find out more about the Western Australian EV
Network scan the QR code.

charger, reducing
range anxiety and
allowing electric
vehicle owners
to explore our
amazing State.”
The Hon. Bill Johnston MLA
Energy Minister

SYNERGY 2023 ANNUAL REPORT 37

 OPERATIONS

KPI
Deliver Storage
Projects and
Increase DER Under
Management

We are building
storage in our
community
A Virtual Power Plant (VPP) organises and aggregates
selected distributed energy resources (DER) to
generate and store electricity at a local level.

A VPP can bring together rooftop solar systems,

batteries, electric vehicles and smart appliances,
Project Symphony is a collaboration between Synergy,
larger generation systems (installed at commercial
Western Power and the AEMO with support from
and industrial facilities) and even community-scale
Energy Policy Western Australia. The project has also
batteries, which are shared across an area.
received funding from the Australian Renewable
Synergy has a number of VPP projects in our Energy Agency (ARENA) as part of its Advancing
community: Renewables Program. It combines the energy sources
of DER and orchestrates them to smooth out the
Project Symphony supply and demand for electricity.
Synergy’s School Virtual Power Plants
In 2022, Project Symphony aggregated its first
Alkimos Beach community battery package of residentially generated electricity and
successfully participated in a simulated two-way
Wholesale Electricity Market.
Project Symphony
The project entered its full stability period, ‘test-and-
In the face of a rapidly changing energy industry, learn’, in April 2023, with all commissioned assets now
our customers’ rooftop solar systems, batteries, air being orchestrated as a VPP to test the ability for DER
conditioning and electric hot water systems when to participate in future energy markets alongside
orchestrated together can help keep the power traditional power systems.
system stable and enable more renewable energy on
the grid. Synergy has delivered several knowledge sharing
reports via work packages – WP 2.1 DER Services
As of July 2023, 341 customers and their 690 assets Report, WP 2.3 DER Valuation Report, WP 4
are recruited to participate in Western Australia’s Platform and Non-Functional requirements and
largest VPP. WP 3.2 Aggregator Report, which are published on
ARENA’s website.
Project Symphony is an exciting and innovative
project, which aims to explore how VPPs could ARENA will publish the final report on Project
contribute to a sustainable, affordable and reliable Symphony’s outcomes in late 2023.
energy future for Western Australia.

38 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

KPI
Deliver Storage
Projects and
Increase DER Under
Management

Synergy’s School Virtual Power Plants

Synergy works with the State Government and the
Department of Education to create opportunities
to transform schools into smart and flexible VPPs
to optimise renewable energy sources. In 2022, we
expanded the program to regional Western Australia.

Seven regional schools are now participating: Alkimos Beach community battery
Geraldton - Senior High School The Alkimos Beach community battery was identified
as an asset that could be used to support the grid
Geraldton - Champion Bay Senior High School
when the Alkimos Beach Energy Storage Trial ended in
Geraldton - Waggrakine Primary School May 2021.
Kalgoorlie - O’Connor Primary School Our Synergy’s School VPPs and Alkimos Beach
Kalgoorlie - Hannans Primary School community battery assets were activated for three
hours between 5-8 pm on 20 February 2023. This
Kalgoorlie - Kalgoorlie Primary School
was the first time they were activated by AEMO to
Kalbarri - Kalbarri District School contribute to supporting the summer peak demand.
We are pleased to report that the batteries were
Installation and commissioning of all schools is aimed successful at supplying energy to the market.
to be completed by early 2024.

SYNERGY 2023 ANNUAL REPORT 39

 OPERATIONS

Our
customers
Customers are at the heart of everything
we do. Synergy constantly explores new
opportunities to support our customers.

Residential customers Business customers We have 31 products

available to suit our
customers’ needs

1,069,970 104,618 31
Customers subscribed Customers registered Customers with
to paperless billing for My Account installed distributed
energy resources

785,119 631,535 424,713

Customers on Customers registered Installed capacity based on

advanced metering for supply guarantee residential rooftop solar
infrastructure (AMI) vs as they have eligible inverter sizes
307,997 customers on medical equipment
a basic meter

520,881 3,554 1,775,658 kW

40 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

Tariffs
The Western Australian Government regulates
electricity prices in line with the Energy Operators
(Electricity Retail Corporation Charges) By-laws 2006.
Changes to electricity tariffs, fees and charges are
considered by the Western Australian Government
annually as part of the State Budget process. The
below tariffs are for the financial year 2023-24.

Synergy Home Plan® (A1) tariff

Designed for customers that wish to have one flat
rate all day.

Supply charge 110.4600 cents per day

Electricity charge 30.8120 cents per unit

Home Business Plan® (K1) tariff

Designed for home businesses where electricity is
used for both living and working.

Supply charge 194.9200 cents per day

Electricity charge - first 20 units per day 32.1886

cents per unit

Electricity charge - next 20 - 1,650 units per day

30.3335 cents per unit

Electricity charge - more than 1,650 units per day

34.1999 cents per unit

All tariffs are correct 1 July 2023

SYNERGY 2023 ANNUAL REPORT 41

 OPERATIONS

Community Energy
Community Energy is a new residential tariff offering
the first 10 units kilowatt hours (kWh) of electricity at

Synergy’s zero charge between 9am and 3pm each day during
the super off peak time period.

products and
The product is designed to support more
vulnerable customers and is available to those on
a hardship program or identified as experiencing

services
financial hardship.

This tariff is intended to share the benefits of

distributed energy resources (DER), while also
incentivising consumption behaviour that helps
address low load risks.
Through Synergy’s unique offering
Community Energy is only available to residential
of products and services, we aim to customers who do not have a DER system (this
support our customers to manage includes solar, battery and/or EV) installed at the
their energy needs. premises in which they reside.

This product was designed for customers as an

Household Electricity Credit affordable alternative to solar power. We are also
trying to drive customer behavioural change by
On 11 May 2022, the State Government announced incentivising usage in the middle of the day.
that eligible Western Australian households would
receive a payment to ease cost of living pressures. When used to its full potential, customers may be
The payments were delivered through Synergy able to save between $200 to $500 a year on the
and credited to customers accounts in financial Community Energy tariff.
year 2022-23.
As of July 2023, there were 475 customers on the
product with 253 of these customers on the Case
Management Program.

42 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

Midday Saver Support for those in hardship

Midday Saver is a time-of-use tariff that offers a super Synergy is committed to supporting our community
off peak rate of just 8.2 cents kWh between 9am through a range of specialised hardship services.
and 3pm and a 51.25 cents kWh peak rate between
3pm and 9pm. This tariff is designed to incentivise The Case Management program provides
customers who can shift their energy consumption tailored hardship assistance options to customers
away from peak times. experiencing severe financial difficulty and is made
up of specially trained case managers who work one-
Midday Saver launched in July 2022 with a on-one with customers.
campaign aimed at customers who we identified as
financially benefiting from the tariff with no change Customers make payments based on their capacity
of behaviour. to pay and Synergy works with them to reduce their
energy consumption in tandem with paying down any
As of July 2023, 6,421 customers have taken up debt they may have.
the product.
In the financial year 2022-23, Synergy’s case
Usage patterns show that on average customers management team supported 7,091 customers in
are moving two units of consumption from peak to hardship. This is an increase of 88 percent on the
super off peak. Customer savings to date are almost financial year 2021-22, due to an additional ten case
$200,000 with 75 percent of customers so far seeing managers joining the Synergy team in April 2022. The
a benefit. team are forecast to support 7,800 customers in the
coming 2023-24 financial year.
Trends indicate that customers adapt as they become
aware of time of use benefits and start to shift their
behaviour within two months. The third month is Smart Energy for Social Housing
typically when customers’ start to save.
Eligible public housing tenants will have a Synergy-
owned and maintained rooftop solar system installed
Electric Vehicle Add On on their rental property and access to Synergy’s
Future Communities Plan, which offers a discounted
Designed to support customers to charge EVs during rate for electricity consumed during off peak times
the overnight or super off peak time periods. (9am to 3pm).
Supply charge 123.0000 cents per day
As of end of June 2023, 281 customers are on our
Peak electricity charge 51.2500 cents per unit
Smart Energy for Social Housing program with
Super Off Peak electricity charge 8.2000 cents installations complete. The analysis suggests
per unit customers are saving on average eight percent on
their energy bills
Overnight electricity charge 18.4500 cents per unit

Off Peak electricity charge 22.5500 cents per unit

SYNERGY 2023 ANNUAL REPORT 43

 OPERATIONS

KPI
Deliver
Profitable Green
Energy To Large
Contestable
And Industrial
Customers

We are enabling
local government to
transition to lower net
carbon emissions
In April 2022, Synergy and Western Australia Local WALGA commenced development of the partnership
Government Association (WALGA) began a three- in 2020 with an aim to aggregate the local
year energy partnership with an aim to help reduce government sector’s energy spend through the
Western Australia’s carbon emissions. establishment of a renewable energy buying group.

The partnership provides 48 Western Australian Under the partnership all renewable energy offsets
local councils with the ability to purchase renewable will be supplied from within Western Australia, with
energy offsets for up to 100 percent of their Synergy’s sourcing the electricity supply from Collgar,
contestable electricity consumption and represents Emu Downs, Warradarge and the Albany Grasmere
one of the largest energy procurement initiatives in Wind Farms.
Australia with local government.
This partnership is the result of extensive local
government consultation and supports our transition
to a renewable future.

Synergy is in discussions with WALGA for

consideration of future renewable energy-based
supply arrangement options that could apply
beyond 2025.

44 SYNERGY 2023 ANNUAL REPORT

 OPERATIONS

KPI
Improve
Customer
Service

We are helping
households that are
vulnerable to
financial hardship
The Household Energy Efficiency Scheme (HEES) The HEES program aims to support 9,000 Western
is designed to support households facing financial Australian households in hardship by June 2025.
hardship by addressing energy efficiency, a key factor
that contributes to high energy bills. The program 167 Synergy customers in financial hardship
is being delivered by Synergy and Horizon Power in participated in the pilot receiving HEES services
partnership with non-government organisations and delivered by Anglicare Western Australia on behalf of
Energy Policy Western Australia. Financial Wellbeing Collective

HEES assists households on lower incomes to reduce

their energy costs through provision of free home
energy audits, energy education and coaching.
This includes removing barriers to accessing energy
efficient appliances for some households.

An initial pilot found participants were able to make

changes to their homes and lifestyles that resulted in
energy savings.

SYNERGY 2023 ANNUAL REPORT 45

Social and
community
impact
 SOCIAL AND
COMMUNITY
IMPACT

Social and
community
impact Through its commitment to
workplace diversity and safety,
community investment and
an objective of 80 percent
emissions reduction by
2030, Synergy is ensuring a
better Western Australia for
generations to come.

48 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

Our
environment
Synergy has created an Environment Strategic
Plan for the financial years 2022-25. Synergy is
committed to achieving an 80 percent reduction
in carbon emissions by 2030 and net-zero by 2050.

The plan outlines three main pillars:

Protect:
Care for the environment

Meeting our customers’ environmental

expectations, delivering environmentally
sustainable assets, and communication
of environmental performance.

Remediate:
Respect and restore our land

Creating sustainable solutions for

waste, remediating the land we
have impacted and managing
contamination liability.

Inspire:
Net-zero by 2050

Understanding the pathway to net-

zero, creating new opportunities
for communities, and remaining
transparent with all reporting.

SYNERGY 2023 ANNUAL REPORT 49

 SOCIAL AND
COMMUNITY
IMPACT

Environmental
highlights
Recycling is a simple way to minimise waste and Synergy is supporting the reusing
lessen the impact to the environment. Many of the
products we use can be recycled into new materials of by-products
and products. By giving these materials a second life,
Fly and bottom ash are a generation by-product
we minimise reliance on landfills and the use of non-
created through the combustion of coal to
renewable resources.
generate electricity.

Synergy uses fly ash concrete wherever possible in all

projects. In 2022, Synergy reused 173 cubic metres of
fly ash concrete.

50 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

Helmets and aerosol cans recycled Cans and bottles make change for
at Muja Power Station Synergy Spirit
In early 2023, Synergy’s Muja Power Station Synergy’s Kwinana Power Station and Cockburn
safety team performed its biennial change out of Power Station sites collect cans and bottles for
safety helmets from all Synergy operators on site. recycling which are then exchanged for 10 cents per
Approximately 250 helmets were processed in our can/bottle at the Containers for Change centres.
helmet recycling bin.
This money is then donated to our Synergy
In 2022, Muja Power Station also implemented Spirit program.
aerosol can recycling.

Best practice used to protect

Bricks saved from landfill at the the environment at the Kwinana
Kwinana Rehabilitation Project Rehabilitation Project
In 2022, Synergy’s Kwinana Rehabilitation Project Synergy’s contractors and employees at the Kwinana
team saved an estimated half a million bricks from Rehabilitation Project site are using best practice to
going to landfill. The bricks from the demolished ensure we do not cause harm to the site.
Kwinana Administration Building were crushed and
used as fill. In financial year 2022-23, Synergy undertook the
following actions to help ensure we protect the site
Fill is a clean stabilised material used to ‘fill’ a hole and its surrounds:
or trench. Synergy used the recycled bricks to fill
demolished cable tunnels to enable large excavators Bagged the ends of hydraulic hoses on machinery
to safely drive over the tunnels. and equipment when not in use
Bagging the hoses prevents slow leaks onto the
ground
Reuse and recycling in focus during
Phased bio-hydraulic oil into excavators
Muja Power Station decommissioning This vegetable oil-based product is more suitable for
activities use in environmentally sensitive areas than that of
mineral oil based
Muja Power Station is focused on the reuse and
Blocked stormwater drains to protect the canals
recycling of scrap metal and power station
As most drains at the site serve as stormwater drains,
equipment when undertaking decommissioning
those which are within the catchment of the current
activities. Decommissioning activities help prepare for
demolition works have been blocked at the drain to
power station closure and our goal of net-zero carbon
ensure no contaminated water reaches the Cockburn
emissions by 2050.
Sound
As of 1 July 2023:
Provided temporary power for contractors
67 power station and equipment items have been This helps avoid diesel generators running for long
approved for reuse periods of time

590 tonnes of scrap metal have been recycled

95 kl of transformer and turbine hydrocarbons have

been recycled

SYNERGY 2023 ANNUAL REPORT 51

 SOCIAL AND
COMMUNITY
IMPACT

Environmental Across all seven environmental compliance-related

licences for both sites, the audit identified no

audit instances of non-compliance with specific licence

conditions. Furthermore, no significant control
deficiencies were observed based upon the risk-
based sample testing performed. One low-risk control
In 2022 Synergy conducted an environmental
design finding was identified in relation to changes to
audit for our financial year 2022-23 annual internal
environment licences and compliance registers.
audit plan.
Overall, the audit indicated an improved control
Synergy engaged KPMG to support our in-house
environment.
internal audit team. The previous environmental
management audit was completed in 2021. Environmental Improvement Plans are being
finalised to drive continuous improvement in the
The audit focused on compliance with the conditions
environmental space.
of licences for Muja Power Station and Pinjar Power
Station sites only. In 2022-23 there were four reportable environmental
licence incidents that occurred which are outlined
Synergy owns and operates State-critical energy
in Table 1. The learnings we have applied from
infrastructure and must demonstrate compliance
these incidents will help to further improve our
with State and Federal environmental legislation.
environmental performance.

52 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

Table 1.
Environmental licence breaches

Date Location Incident details Reporting

September Kwinana Power Station HDPE liner detachment in overflow pond Department of Water &
2022 Environmental Regulation

January and Kwinana Power Station The total residual chlorine analyser did not Department of Water &
February 2023 meet licence requirement for continuous Environmental Regulation
monitoring equipment availability (95%) on
three occasions

August 2022 Collie Power Station Exceeded Oxides of nitrogen (NOx) limit of Department of Water &
800mg/m³, on four occasions Environmental Regulation

July 2022 Muja Power Station A release of surface water, clay and silt Department of Water &
material from the site occurred, from the Environmental Regulation
external clay windrow along the northern
wall of the fly ash dam

Table 2.
Water abstraction

Groundwater Muja Kwinana Pinjar

abstraction licence Power Station Power Station Gas Turbine Station

Allocation 12,000,000 kL​ 1,000,000 kL​ 10,000 kL​

Actual use 2,896 ML 158,427 kL 2,340 kL

*Synergy/Muja has an annual water allocation based on reporting period which is the calendar year (January - December).

Reportable Greenhouse Gas Emissions (t CO2-e)

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

2004/05 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23

Greenhouse gas emissions 2004/05 (t CO2-e)

Greenhouse gas emissions scope 2 (t CO2-e)
Greenhouse gas emissions scope 1 (t CO2-e)

SYNERGY 2023 ANNUAL REPORT 53

 SOCIAL AND
COMMUNITY
IMPACT

Our health
and safety
At Synergy, the health, safety and wellbeing of our
people is our priority.

In financial year 2022-23, there was an increase of

32.4 percent in the significant incident frequency rate
to 2.78 per million hours worked and an increase in
the recordable injury frequency rate (RIFR) to 4.94 per
million hours worked in financial year 2022-23.

Note: modified duties injuries and noise induced hearing loss were
additions in Synergy’s RIFR calculations from October 2022.

How many safety

incidents Synergy had in
financial year 2022-23

16
Categories of Synergy
safety incidents

Modified Duties
Injury (8)
Medical Treatment The series comprises of three modules which focus
Injury (6)
on the following:
Loss Time Injury (1)
Noise Induced
Make it Safe - fundamentals of hazards and risk
Hearing Loss (1) management

Make it Personal - psychosocial hazard and risks

and the importance of creating mentally healthy
Synergy has continued to review and amend its workplaces
health, safety and management systems and Make it Home - Synergy’s critical risks and how to
processes to align with the Work Health and Safety conduct risk assessments in the workplace
Act 2020 and accompanying regulations, which came
into effect on 31 March 2022. From when the series launched in December 2022 to
July 2023, we have delivered the following.
These regulations provided an opportunity for us to
continue to upskill our understanding of work health Make it Safe - 40 sessions with 636 people
and safety across the business.
Make it Personal - 46 sessions with 652 people
Synergy’s Learning Academy, in partnership with Make it Home - launching in early September 2023
our Health, Safety and Environment team, launched
a new learning series called ‘Make it Safe, Make it This equates to 4,508 hours that Synergy employees
Personal, Make it Home’. have spent on this new safety training.

54 SYNERGY 2023 ANNUAL REPORT

SOCIAL AND
COMMUNITY
IMPACT
 SOCIAL
SOCIALAND
AND
COMMUNITY
COMMUNITY
IMPACT
IMPACT

KPI
KPI
Improved
Increase
social
wellbeing
Organisational
and
impactDiversity
in the areas
we operate

We are fostering Aboriginal and Torres Strait Islander

diversity at Synergy employment program
Synergy is committed to reconciliation and is working
to improve engagement with Aboriginal and Torres
Synergy recognises the importance of building a
Strait Islander people and communities.
diverse, equitable and inclusive workplace.
As of 1 July 2023, Synergy is awaiting Reconciliation
We aim to be an exceptional place to work and a
Australia endorsement of our Innovate Reconciliation
place where our employees can be their best in a
Action plan (RAP).
physically and psychologically safe and healthy
environment. We created the position of Senior Aboriginal
Engagement Advisor in 2022. This advisor supports
An exciting part of our diversity, equity and inclusion
the delivery of our RAP commitments and increase
commitment are our employment initiatives to
sustainable employment outcomes for Aboriginal and
recruit and develop candidates with a diverse lived
Torres Strait Islander candidates across the business.
experience. These programs have been running since
2020 and have resulted in some fantastic outcomes. In early 2022, we partnered with South Metropolitan
TAFE to offer several Aboriginal and Torres Strait
Islander candidates traineeship employment
All abilities employment pathways. We have hired five Aboriginal and Torres
Synergy partners with Perth based Disability Strait Islander candidates in various roles across our
Employment Service provider and NDIS provider, organisation. Supervisors of these employees also
EDGE Employment Solutions, which specialises in the received specialised Aboriginal cultural training.
placement and support of candidates with disability
The unique insights that these Aboriginal and Torres
into the workplace.
Strait Islander employees have brought to the
Through Synergy’s partnership with EDGE, we have 11 organisation have been invaluable.
employees who have an identified disability.

Candidates placed by EDGE are supported by a Gender equity at Synergy

Synergy mentor and an EDGE job coach on an as-
Synergy has a gender reference group, which
needed basis.
ensures that gender equity issues are tabled and
progressed. This group has been influential in making
in-roads for women in the recruitment space.

Synergy applies a language filter on all job

advertisements, making sure there is no gender
bias. Recruitment shortlists have an equal number
of men and women wherever possible, and our
recruitment panels are gender balanced.

Creating opportunities to empower and support

women at Synergy highlights our priority and ongoing
commitment to diversity and gender equality and is
critical to creating an exceptional place to work.

56 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

KPI
Increase
Organisational
Diversity

Gender balance in senior roles Leadership programs for women

We have targets to increase the gender balance in We have created a bespoke suite of leadership
more senior roles. We are aiming for women making programs for women at Synergy.
up 45 percent of all senior roles (we are currently at
42 percent). CARE for team members

Our corporate key performance indicator target is CARE is a career navigation program for Synergy
40 percent of women in senior leadership roles. We women employees who are looking to explore their
are currently at 34.9 percent. Our executive general career priorities. As of July 2023, 16 employees have
manager team has a gender balance of 50 percent, graduated from the program and 12 are continuing.
providing diversity from the top. A specialised Muja Power Station based program has
commenced with 16 participants.

Leadership programs to support Women Rising program

careers and our executive leaders The Women Rising program is a holistic
personal and professional development journey
We have nationally accredited leadership programs designed for women. 32 Synergy employees have
that have been designed to support Synergy had the opportunity to participate in the Women
employees to become better leaders. Rising program.
All leadership programs use Synergy’s newly revised Leadership support for both the CARE and Women
leadership competencies as a foundation to elevating Rising programs are embedded in their design, with
purposeful leadership at Synergy. sponsors assigned for CARE and an aligned managers
program undertaken for Women Rising.
Elevate is our 18-month program for aspiring leaders.
Employees graduate this program with a Certificate
IV in Leadership and Management. As of July 2023, 20
employees are undertaking the program.

Ascend is our two-year program for people leaders.

Employees graduate this program with a Diploma
in Leadership and Management. As of July 2023, 18
employees are undertaking the program.

We also have leadership programs that have been

designed to develop our executive and senior
leadership team. The leadership programs create
accountable leaders and demonstrate that leadership
is a priority at Synergy.

SYNERGY 2023 ANNUAL REPORT 57

 SOCIAL AND
OPERATIONS
COMMUNITY
IMPACT

KPI
Workforce Of The
Future, Increase
Organisational
Diversity and Highly
Engaged Workforce

We are
developing future
energy professionals
We are supporting the next generation of energy Through Synergy’s graduate program, graduates
industry professionals to help us to lead Western receive the training necessary to build skills to
Australia’s transition to an intelligent energy future. succeed in the industry and support our growth as a
dynamic energy provider of the future.
Synergy has been recognised as the 18th top graduate
employer Australia-wide for 2023*. Our graduates have worked on a variety of projects
including:
Synergy runs a successful graduate program
that fosters and develops new talent and creates Working with real-time event stream and telemetry
employment opportunities in the energy sector. data

Discovering how to write code that processes and

The graduate program is part of our commitment
manages large amounts of data to deliver key insights
to science, technology, engineering, and maths
to stakeholders and perform calculations rapidly and
(STEM) learning.
at scale
Our graduate program excels as it: Developing relationships with our external suppliers
Gives our graduates the opportunity to rotate through and vendors through a procurement lens and a
various areas of the business project lens. This included conversing with our
vendors, liaising with them about their expired
Provides opportunities for graduates to undertake
insurances and communicating with third-party
public speaking opportunities, which includes end-of-
installers while on our sites to commission assets for
year graduate presentations
Project Symphony
Facilitates workshops that help to develop key energy
industry skills 2023 is the fourth year of the graduate program and
we continue to build on our successes.
Provides graduates with mentors who assist them to
navigate the workforce In 2023:

Synergy welcomed 10 new graduates

Synergy achieved a new benchmark for our highly

successful graduate program following top-35
rankings in 2021 and 2022

* by topgraduateemployers.com

58 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

KPI
Highly Engaged
Workforce and
Workforce Of The
Future

We are preparing
our people for future
opportunities
On 5 August 2019, when the Western Australia Premier More than 40 people are part of our transition team,
announced the planned closure of Muja Power Station helping to implement our Workforce Transition plan
Stage C, Synergy embarked on a journey to bring to
The team is responsible for developing an onsite
life Synergy’s Workforce Transition program.
transition centre, an online information portal, co-
We had a simple premise for our transition journey, to creating our future operating model and designing
empower our people to shape their own future so no- new ways of working based on two-unit operations
one is left behind. beyond 2024

We recognise that everyone has different 20 employees on our transition training committee
circumstances and we have adopted a people-first,
They are directly involved in the design,
co-creation approach to our transition. This inclusive
implementation and communications of Muja C
approach allows everyone to have a voice and be
transition training and transition support programs for
involved in making decisions, not only about their own
our employees and contractors
individual plans, but also in the design of the transition
program, and the future structure and operating 74 transition courses and support programs have
model of Muja Power Station. been activated; engaging 22 different registered
training organisations
During our Workforce Transition program we are
focused on the fact that future planning needs to
More than 900 courses have been completed by
involve the whole community, transition plans need
Muja Power Station employees and contractors
to be tailored to employees (rather than a ‘one size
fits all’ approach), and we recognise that State Muja Power Station Unit 5 was retired safely on
Government support is critical for a successful 29 September 2022, after more than 40 years in
transition. operation

So far during Synergy’s transition: We have now reset our transition program and are
focused on activities for the upcoming retirement
370 individual transition plans have been developed of Unit 6, planned for late 2024, by continuing our
(covering 270 Synergy employees and 100 long-term people-first, co-creation approach
contractors)
Synergy was proud to be part of the 2022 Western
Through this process each person is working towards Australia Training Awards, with Muja Power Station’s
one of four transition pathways: continuing at Muja Workforce Transition program recognised as a finalist
Power Station, redeployment to other Synergy sites, a in the prestigious awards
new career outside the organisation, or transitioning
to retirement

SYNERGY 2023 ANNUAL REPORT 59

 SOCIAL AND
COMMUNITY
IMPACT

We are transitioning
Pinjar Power Station
operations
In March 2023, some dispatch activities and the As part of the changes, new communications
majority of unit operations at Pinjar Power Station protocols have been implemented at Pinjar Power
were transitioned from Australian Energy Market Station. These protocols ensure that communications
Operator (AEMO) operators to Synergy Gas relating to unit control, outages, maintenance, and
Turbine Operators. operations will go via the control room. This is vital to
ensure the safety of people and the units.
This move, which was required by the Wholesale
Energy Market reforms, marked a significant change We are excited about the future of gas turbine
in the way Pinjar Power Station operates. It has generation at Pinjar and the role that Synergy
resulted in AEMO transitioning knowledge of the unit’s employees will play in ensuring its continued success.
operation and monitoring to Synergy, while providing
By working together and embracing change, we
valuable hands-on interactions with the gas turbine
believe we can achieve great things and make a
units for Synergy operators.
positive impact in the lives of our customers and
Synergy employees now manage and execute a the community.
number of operational and dispatch tasks for the
Pinjar gas turbine units, in collaboration with AEMO.

60 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

Our
people
Synergy is committed to providing an exceptional
place to work, where people are engaged,
enthusiastic, have opportunities to learn and grow,
and experience a sense of belonging, whilst being
invested in a shared purpose to positively contribute
to leading Western Australians to their intelligent
energy future.

Peer recognition
Peer recognition is a core part of Synergy’s
people-first approach and is well entrenched
in every part of our organisation. Our internal
platform enables individual and team recognition
for achievements and contributions against
shared values and focus areas. There is a clear link
between peer recognition, engagement, and overall
organisational performance.

Synergy’s executive Synergy is ranked 18th Synergy renegotiated two

team has a gender as a graduate enterprise agreements in
balance of 50%, employer of choice financial year 2022-23 which
providing diversity Australia wide in helped provide certainty for
from the top 2023* over 600 people

50% 18th 600

Synergy has 11 4,508 hours were spent Five Aboriginal and Torres
employees with an on safety training Strait Islander traineeship
identified disability through our ‘Make it employment pathways
Safe, Make it Personal, were started in financial
Make it Home’ program year 2022-23

11 4,508 5
* by topgraduateemployers.com

SYNERGY 2023 ANNUAL REPORT 61

 SOCIAL AND
COMMUNITY
IMPACT

Our
community
Synergy is making a positive contribution to society,
our people, the economy, the environment, local
communities and stakeholders through our evolved
corporate strategy and the addition of our social
value pillar. This will be the legacy we leave behind for
future generations.

Community investment
Our Community Investment Program is guided by four key themes.

Inclusivity and Environment Committed Energy

empowerment for the future to community leadership

Addressing disadvantage Contribute to Supporting the sustainable Fostering innovation, ideas

and inequity so everyone initiatives that protect and development of vibrant and skills to drive our
can participate in work care for the environment communities impacted by intelligent energy future
and society and respect and the energy transition
rehabilitate the land

We support We support We support We support

Vulnerable customers Protecting and improving Social inclusion and Enabling greater
and people experiencing biodiversity belonging electrification
hardship
Native flora and fauna Arts and culture STEM education
Aboriginal economic recovery and protection
participation Emergency relief Innovation
Protecting our marine
Gender equity environment Mental and physical health Energy efficiency

Disability inclusion Waste avoidance,

reduction and reuse

62 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

Highlights

Volunteering
358 - the total number of hours volunteered in
financial year 2022-23

$54,574 - total dollar value donated to the following

charities through our employee-driven Synergy Spirit
fundraising program

Community Giving Fund

Through our Community Giving Fund, we support
programs and initiatives that drive sustainable
outcomes for people, communities, and the
environment.

8 organisations supported

Almost $70,000 given

Collie Small Grants and

community sponsorships
7 community groups supported through Collie Small
Grants Program

15 groups, schools and events benefited from

community investment in Collie

Synergy Schools Solar Challenge

event 2023
The 2023 Synergy Schools Solar Challenge offered a
unique opportunity for Western Australian students
to learn race solar cars and learn about solar energy,
battery technology and engineering principles.

Total schools: 130

Total students: 676

Total distance travelled on solar (not including battery

powered races): 12.2km

Total number of events: 8

SYNERGY 2023 ANNUAL REPORT 63

 SOCIAL AND
COMMUNITY
IMPACT

KPI
Improved Social
social
Wellbeing
wellbeing And
and
Impact
impact In
in The
the areas
Areas
We
we Operate
operate

We are supporting
our community

Synergy Spirit Ruah Tree of Light

Donations have a significant impact on the services In 2022, Synergy established a new community
charitable organisations can offer the community. partnership with Ruah Community Services, for the
Whether they are animal welfare agencies, disaster Ruah Tree of Light, which recognised our
recovery organisations or charities supporting people support for vulnerable customers and people
in hardship, Synergy’s employees are eager to do experiencing hardship.
what they can to help.
Ruah is a Western Australia-based independent,
Synergy Spirit raises money for charity and not-for-profit community service organisation that
helps partner our people with local volunteering has delivered tailored, wrap-around support services
opportunities. It is driven by a committee of for more than 60 years to people experiencing
enthusiastic volunteers. Everyone in Synergy is homelessness, family and domestic violence, and
welcome to get involved, by making regular mental health challenges.
donations through payroll deduction or attending
a fundraising activity. Every two financial years, The Ruah Tree of Light, powered by Synergy
employees have the opportunity to elect charities Christmas appeal, helped fund the critical services
to support. Ruah provides to more than 30,000 Western
Australians each year.

In 2022, we contributed $20,000 to the Ruah Tree

of Light and the Christmas campaign raised an
additional $15,700, with 28,000 people reached
through Synergy’s various communications channels.

Through the combined reach of the Christmas

campaigns of Ruah and Synergy, we were able to help
raise awareness and reduce the stigma associated
with those experiencing homelessness, family and
domestic violence and mental health challenges.

64 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

KPI
Improved Social
social
Wellbeing
wellbeing And
and
Impact
impact In
in The
the areas
Areas
We
we Operate
operate

Community Giving Fund

We recognise and value the diversity of the
communities we partner with and are committed to
inclusion, fairness, and participation for all.

In 2022, as part of our Community Investment

Program we launched our Community Giving Fund.
Our grant recipients must have a shared
Through our Community Giving Fund, we commitment to inclusion, fairness and participation
support programs and initiatives that drive for all community members.
sustainable outcomes for people, communities
Our grant beneficiaries have included:
and the environment.
Culturally and Linguistically Diverse (CALD) women
We award grants of up to $10,000 through the
program for initiatives that aim to make a positive Economically disadvantaged people
impact on people and the environment in the South People with disabilities
West Interconnected System.
At-risk youth
In 2022, we had over 71 applications and awarded
Aboriginal and/or Torres Strait Islander peoples
almost $70,000 to community organisations, charities
and not-for-profits, who make positive impact on the People working for animals and the natural
communities in which we operate. environment

SYNERGY 2023 ANNUAL REPORT 65

 SOCIAL AND
COMMUNITY
IMPACT
Western
Australia

$10,000 Mullewa
Coorow

$3,493 Dalwallinu

$9,479
Kalgoorlie
Mirrabooka
Subiaco
$5,000 Belmont

Kwinana
$10,000

$10,000

$10,000
Denmark
Albany
$9,933

Our 2022
Community Giving Fund recipients

$9,933 - Ocean Heroes $10,000 - OzHarvest

$3,493 - Bluebush Wildlife Rescue and Rehabilitation
$10,000 - Dismantle
$5,000 - Jacaranda Community Centre
$9,479 - Dress for Success Perth
$10,000 - Denmark Environment Centre $10,000 - Finlayson House Women’s Refuge

66 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

Ocean Heroes OzHarvest

To help purchase stand up paddle boards enabling To help deliver the hot breakfast and food relief
people on the autism spectrum, in the Great Southern, outreach program with Frank Konecny Community
to build confidence through surfing. Centre. The program supports people experiencing
homelessness and those at risk, including rough
sleepers, people in transitional accommodation and
Bluebush Wildlife Rescue and other vulnerable community members.
Rehabilitation
To help purchase first responder critical care Dismantle
equipment including egg incubator, chick brooder
and brooder ICU for injured wildlife to ensure they get To help deliver BikeRescue program Mellewa Youth
back to the rescue centre safely. Centre, which provides mentoring and bicycle repair
training for young participants in the area.

Jacaranda Community Centre

Denmark Environment Centre
To support the Community Empowerment Art Yarning Incorporated
Circle for Aboriginal women, that facilitates the
creation of art works such as painting and ceramics, To support the Denmark Bio Blitz citizen science
while providing a forum to discuss social issues program at Mount Hallowell Reserve, to collect data
affecting the Aboriginal community. on the biodiversity of the area.

Dress for Success Perth Finlayson House Women’s Refuge

To support a pilot project with Ishar Multicultural To contribute to building an additional 10 sole
Women’s Health Services, to empower culturally and occupancy units which will increase accommodation
linguistically diverse women towards employment capacity at the Goldfields Women’s Refuge, Finlayson
and financial independence with professional clothes, House for women, children and families affected by
interview training, and a range of corporate and domestic violence in the area.
personal skills and access to a cultural advisor.

SYNERGY 2023 ANNUAL REPORT 67

 SOCIAL AND
OPERATIONS
COMMUNITY
IMPACT

KPI
Improved Social
Wellbeing And
Impact In The Areas
We Operate

We are committed
to building energy
education
Synergy is pleased to be supporting Western The Challenge was held in Albany, Bunbury, Collie,
Australian students in science, technology, Geraldton, Kalgoorlie and at two Perth
engineering, and maths (STEM) learning, and metropolitan locations.
helping to make a positive contribution to our
future generations and the local communities in During the Challenge, 690 year 6 and year 8 students
which we operate. from more than 130 Perth metropolitan and regional
schools, designed and built their own solar-powered
For six years, Synergy has partnered with Science cars, to race against teams from other schools.  
Teachers Association of Western Australia to engage
and educate the next generation of Western The sun didn’t want to shine in Geraldton, Kalgoorlie
Australians on the benefits of renewable energy. and Albany on race day, but the students still got to
participate, as the solar cars were equipped with
The Synergy Schools Solar Challenge offers a unique batteries which could be switched on if there is
opportunity for young minds to build STEM skills and insufficient solar power. Just like our energy transition
knowledge by learning about solar energy, battery plan, storage and batteries are essential to enable
technology and engineering principles. greater take up of renewable energy.

Event locations Total distance travelled on solar power across the

whole 2023 Schools Solar Challenge was 12.2km,
Metro north – Hillarys
which is just over 30 laps of a standard Olympic
Metro south - Martin stadium, powered by the sun and our students’
science and engineering skills.
Albany

Bunbury We hope to inspire and educate our future energy

leaders through the Challenge to support a more
Collie sustainable future for all Western Australians.
Geraldton
In addition to Synergy Schools Solar Challenge, we
Kalgoorlie also had a Synergy Team Solar Challenge in February
2023 for our employees.
Grand final- Murdoch University
To find out more about the Synergy Schools Solar
Burrendah Primary School and Kingsway Christian Challenge, scan the QR code above.
College were the winners of our Synergy Schools Solar
Challenge in 2023.

68 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

KPI
Improved Social
Wellbeing And
Impact In The Areas
We Operate

We are in
Photo: Happy Meal - Perth Festival
Regional Touring Program; BREC; 2023
Photographer: Angelyne Wolf

partnership with

“
the arts
We are helping to bring world-class multi-arts
experiences to regional Western Australians as a
Supporting Partner of Perth Festival’s 2023 and 2024 Perth Festival is delighted to be
Touring Western Australia programs. starting this partnership with Synergy,
This partnership is part of our commitment which will empower us to better
to inclusivity and empowerment of our connect regional communities
regional communities.
with our international arts program
Our support of the 2023 Touring Western Australia through Touring Western Australia.
program included a writers’ engagement session
at Beverley Station Arts Centre and performances
of ‘Happy Meal’ in Geraldton and Bunbury during As with Synergy, Perth Festival
January and February, as well as an inclusive belongs to all Western Australians,
transport option for regional LGBTQI audiences when
the ‘Happy Meal Buses’ connected audiences from we are grateful for Synergy’s support
Margaret River and Manjimup to Bunbury Regional and excited by the opportunities that
Entertainment Centre for the show. our partnership will provide to our
The partnership helps us engage with communities regions.”
across the State and ensures that arts are accessible
for all people, wherever they may live. In 2023, Touring
Western Australia reached almost 2,500 people Nathan Bennett
through the program. Perth Festival’s Executive Director

SYNERGY 2023 ANNUAL REPORT 69

 SOCIAL AND
COMMUNITY
IMPACT

KPI
Improved Social
social
Wellbeing
wellbeing And
and
Impact
impact In
in The
the areas
Areas
We
we Operate
operate

We are We maintained our supportive presence in the

Collie community during financial year 2022-23,

supporting Collie through our substantial commitment to the Just

Transition Working Group and by participating in a
range of local forums and meetings which enabled
us to effectively engage with the community
It is our role to support the development of
and stakeholders.
communities in which we operate. An important
community for Synergy is Collie, Western Australia. Synergy is a major partner of both the Collie Art Prize,
the Collie River Mountain Bike Marathon and the Collie
The Collie community has been on an energy
Labour Day Festival as we continue to support the
transition journey for a few years now and as part
region and community.
of its economic diversification plans has evolved
into a thriving tourism hub. We are supporting this The Collie Art Prize is one of the largest regional art
evolution through a range of community investment prizes in Australia. In 2023, Fremantle artist, Jo Darvall,
and engagement initiatives to help create sustainable won with her piece ‘Boranup Forest Light’ and two
outcomes for the community as it heads into Collie artists were finalists.
the future.
The Collie Labour Day Festival highlights the richness
Synergy’s Collie Small Grants Program provides of Collie and its natural surroundings, making it a
one-off grants of up to $5,000 to local not-for-profit drawcard for visitors and local residents. Synergy
organisations which demonstrate their ability to hosted a community engagement stall at the
deliver social, economic or environmental benefits to festival where people had the opportunity to learn
the Collie community. more about electricity and our Workforce Transition
program. The festival and art prize provided
The program has a proven track record of driving
opportunities for the local community to come
growth, innovation and value to the Collie region.
together while fostering positive social and economic
Through the program, we support initiatives that will
benefits for Collie.
provide a lasting benefit to the community, with an
ultimate goal of enhancing Collie as a place to both We also supported the Kaya Collie 125-year
live and visit. celebrations with a $10,000 contribution. Kaya Collie
was derived from one of the four focus areas of the
Social value is a key pillar of our corporate strategy,
community’s Just Transition Plan (‘Celebrating Collie’s
and the Collie Small Grants Program demonstrates
History and Promoting its Future’). The celebrations
one of the ways we are positively contributing to
featured a program of events that showcased
Collie, for the benefit of future generations.
the community.

Synergy is proud to sponsor and continues to take

part in these community events and engage with
residents and visitors.

70 SYNERGY 2023 ANNUAL REPORT

 SOCIAL AND
COMMUNITY
IMPACT

KPI
Improved social
Social
wellbeing
Wellbeing and
And
Impact
impact In
in The
the areas
Areas
We
we operate
Operate

Small grants Collie community investment and sponsorships:

Collie School Scholarship Program

Collie Volunteer Bush Fire Brigades – to install
mobile communications units to fire appliances Collie Christmas Hamper Campaign - in kind support
to supply back-up for volunteers when radio Collie Apprentice of the Year Awards
communications fail
Collie Education Training Alliance
HorsePower Collie – to buy a wheelchair horse Collie Show
carriage, enabling people with a disability or
physical decline to experience the benefits of Collie River Mountain Bike Challenge
outdoor horse-riding Collie Seniors Christmas Event

Collie Retired Mineworkers Association Inc – Kaya Collie 125th celebrations

to create the Memorial Wall Mural Project in Phoenix Collie Labour Day Festival
Park by renowned artist Jacob ‘Shakey’ Butler,
Collie Art Prize
celebrating Collie’s history and adding to Collie’s
existing mural trail Collie Chamber of Commerce and Industry small
business recognition awards
Collie Racing Drivers Association Inc – to replace a
51-year-old water tank at Collie Speedway, improving
environmental infrastructure to save costs and
conserve water

Collie Suicide Prevention Network – to purchase

equipment to attend community events, supporting
the wellbeing of the Collie community by raising
awareness and providing support and information
to people experiencing mental health issues or at
risk of suicide

Collie Rail Heritage Group Inc - to upgrade lighting

at the Rolling Stock Shed, enhancing the tourist
attraction’s displays and improving workshop safety

Collie BMX Club Inc - to upgrade PA system,

enhancing track commentary and the family-friendly
sporting atmosphere, and enable a reduction of
volunteers required on race day

SYNERGY 2023 ANNUAL REPORT 71

Directors’
Report
Corporate governance

Electricity Generation and Retail Corporation, trading

as Synergy, is a WA Government Trading Enterprise (GTE)
established under the Electricity Corporations Act 2005
and governed by the Government Trading Enterprises Act
2023, which specify its powers, functions and operational
restrictions.

As a GTE, Synergy is not listed on the Australian

Securities Exchange (ASX) but in the financial year
2022-23 sought to comply with the ASX principles
of corporate governance and recommendations,
to the extent applicable and consistent with the
requirements of the Electricity Corporations Act 2005
and the Government Trading Enterprises Act 2023.

Synergy’s core values of innovation, accountability,

collaboration and trust guide the actions and
behaviours of all its employees.
Board of Directors
The directors of Electricity Generation and
Retail Corporation trading as Synergy, at any
time during or since the end of the 2022-23
financial year, are as follows:

SYNERGY 2023 ANNUAL REPORT 73

 Ms Shepherd has over 20 years’ experience in both the private
and public sectors of Australia’s electricity and gas markets.

Michelle Ms Shepherd was formerly a Commissioner at the Australian

Energy Market Commission. Prior to becoming a Commissioner
Shepherd in 2018, Ms Shepherd spent over 15 years working on national
energy reform and strategy at Alinta Energy and AGL. Ms
Chair since May 2023 Shepherd has also worked for the Australian Competition and
Consumer Commission, UK Competition Commission and the
Independent,
Commonwealth Department of Finance. She is a Graduate of the
non-executive,
AICD and holds a Bachelor of Applied Economics from Murdoch
B.Econ, B.Comm,
University and a Bachelor of Commerce from Curtin University.
GAICD
Committee membership
Chair of the Human Resources and Sustainability Committee
(appointed May 2023)

Ms Broughton is a corporate lawyer with significant experience

working as both a director and senior executive in a diverse range

Yasmin of industries, including electricity and gas, and was previously the
acting general counsel and company secretary of Alinta Limited,
Broughton a former ASX 50 company. Ms Broughton is the chair of VOC
Group Limited, a non-executive director of Wright Prospecting
Director since November 2017 Pty Ltd, The Royal Automobile Club of WA (Inc), RAC Insurance
Deputy Chair since May 2023 Pty Ltd and Greatland Gold plc. Ms Broughton is also an advisory
council member for the Curtin University School of Business. In the
Independent,
not-for-profit sector, Ms Broughton is Chair of Presbyterian Ladies
non-executive,
College Foundation.
BComm PG Dip Law,
FAICD Committee membership
Chair of the Audit and Risk Committee (since October 2022,
member since 2017). Member of the Human Resources and
Sustainability Committee (to 21 March 2023)

Mr Bransby is the chair of Australian Health Insurance Alliance,

Commonwealth Private Bank Ltd, Commonwealth Financial

Rob Planning Ltd, Financial Wisdom Limited and the Insurance

Commision. He is a former managing director of HBF Health
Bransby Limited and a former director of HealthGuard Health Benefits Pty
Ltd, HBF Insurance Pty Ltd and Pioneer Credit Ltd. Prior to HBF, Mr
Director since July 2015 Bransby held various executive positions throughout 25 years at
the National Australia Bank Ltd.
Independent,
non-executive, Committee membership
A.Fin, FAIM Member of the Human Resources and
Sustainability Committee.

Mr Clough has over 30 years’ of experience in the energy and

resources sectors. He was most recently the general manager of

Peter government affairs at Woodside Petroleum, during his career he

has provided consulting services to a number of Western Australia’s
Clough biggest firms including Alcoa, BHP Billiton, Santos and Telstra.
Following his early career working for the Western Australian
Director since November 2019 Government primarily in resources development, he became
the executive officer of government affairs at the Chamber of
Independent,
Minerals and Energy WA, and later the general secretary of that
non-executive,
industry association. He has also served as the deputy chairman of
BCE
commissioners at the City of Joondalup.

Committee membership
Member of the Audit and Risk Committee (to 1 September 2023)
Member of the Human Resources and Sustainability Committee
(since 30 May 2023).

74 SYNERGY 2023 ANNUAL REPORT

 Ms McComish is a highly experienced accounting and audit
professional with extensive experience across the energy and

Denise natural resources, financial services and infrastructure sectors.

She was a partner with KPMG for 30 years and held leadership
McComish positions as a KPMG Australian board member and as National
Mining Leader. She is currently a director of Webjet Limited,
Director since May 2023 Gold Road Resources Ltd, Macmahon Holdings Ltd and mental
health organisation Beyond Blue Ltd. She has been a member
Independent,
of the Australian Takeovers Panel since 2013, is chair of the
non-executive,
Advisory Board for the School of Business and Law at Edith
FCA, HonD.Bus,
Cowan University, and is a member of Chief Executive Women
MAICD
and the AICD.

Committee membership
Member of the Audit and Risk Committee
(since 1 September 2023).

Mr Watson is currently the Assistant Under Treasurer,

Agency Budgeting and Governance for the Western
Richard Australian Department of Treasury. He currently leads a
Watson team of 70 professionals who provide advice and analysis
on the budgeting needs of WA’s government trading
Director since May 2019 enterprises and around 60 general government agencies.

Ex Officio, Committee membership

B.Econs (Hons), Member of the Audit and Risk Committee
M.Phil

Previous Directors
Robert Cole
Chair from November 2017 to May 2023 (independent,
non-executive).

Bronwyn Barnes
Director from May 2019 to December 2022
(independent, non-executive).

Kim Horne
Director from October 2014, Deputy Chair from July
2015 to May 2023 (independent, non-executive).

Michele Dolin
Director from October 2014 to October 2022
(independent, non-executive).

Company Secretary
In February 2023, Ms Pippa Marando was appointed Company Secretary
and General Counsel of Synergy to replace Ms Melanie Brown (now
Executive General Manager Trading & Governance). The Company
Secretary and General Counsel role includes management of secretariat,
legal, and corporate governance areas of the business.

The Company Secretary is responsible for ensuring that board procedures

are complied with and governance matters are addressed. All directors
have access to the Company Secretary’s advice and services.

SYNERGY 2023 ANNUAL REPORT 75

 Corporate governance checklist
While Synergy is not a listed company on the ASX
and is not subject to ASX listing rules, during the
2022-23 financial year it sought to comply with
the ASX corporate governance principles and
recommendations (ASX principles), where relevant
and appropriate.

Table 1:
Summary of ASX principles and notes

Principle 1:
Lay solid foundations for management
Recommendation

1.1 Have and disclose a board charter setting out: Y

(a) the board and management respective roles and responsibilities; and
(b) matters reserved to the board and deleted to management.

1.2 Undertake appropriate checks before proposing and appointing a director or senior Y and N/A
executive and provide security holders with all relevant information relevant to a decision.

1.3 Have a written agreement with each director and senior executive setting out the terms of Y
their appointment.

1.4 The company secretary should be accountable directly to the board on matters regarding Y
the proper functioning of the board.

1.5 Have a diversity policy with measurable objectives, assess it annually and disclose the policy N
and progress towards objectives.

1.6 Have a process for periodically evaluating the performance of the board, its committees, Y
and individual directors, and disclose whether the process was periodically undertaken.

1.7 Have a process for evaluating senior executive performance at least once every reporting Y
period and disclose whether a performance evaluation was undertaken in the reporting
period.

Principle 2:
Structure the board to add value
Recommendation

2.1 A board should have a nomination committee of at least three members, mostly N/A
independent and chaired by an independent director, and disclose the charter, members’
names, and committee meetings.

2.2 Have and disclose a boards’ skills matrix. N

2.3 Disclose the names of independent directors, interests, position, or relationship and length of Y
service.

2.4 A majority of the board should be independent directors. Y

2.5 The chair of the board should be an independent director and not the same person as the Y
CEO.

2.6 Provide an induction program for new directors and provide professional development Y
opportunities and skills and knowledge periodically.

76 SYNERGY 2023 ANNUAL REPORT

Principle 3:
Act ethically and responsibly
Recommendation

3.1 Disclose and articulate its values. Y

3.2 Have and disclose a code of conduct for its directors, senior executives and ensure that the Y
board or committee is informed of any material breaches of that code.

3.3 Have and disclose a whistleblower policy and ensure that the board or a committee is N
informed of any material incidents reported under that policy.

3.4 Have and disclose an anti-bribery and corruption policy and ensure that the board or a N
committee is informed of any material breaches of that policy.

Principle 4:
Safeguard integrity in corporate reporting
Recommendation

4.1 Have an audit committee and disclose its charter and members’ qualifications and Y
experience, as well as meeting attendances.

4.2 Prior to board approval, the CEO and CFO should declare financial statements have been Y
properly maintained and comply with appropriate accounting standards.

4.3 Disclose its process to verify the integrity of any periodic corporate report that is not audited N/A
or reviewed by an external auditor.

Principle 5:
Make timely and balance disclosure
Recommendation

5.1 Have and disclose a written policy for complying with its continuous disclosure obligations N/A
under Listing Rule 3.1.

5.2 A listed entity should ensure that its board receives copies of all material market N/A
announcements promptly after they have been made.

5.3 A listed entity that gives a new and substantive investor or analyst presentation should N/A
release a copy of the presentation materials.

Principle 6:
Respect the rights of security holders
Recommendation

6.1 Provide information about itself and its governance to investors via its website. Y

6.2 Have an investor relations program to facilitate effective two-way communication with N/A
investors.

6.3 Disclose the policies and processes it has in place to facilitate and encourage participation at N/A
meetings of security holders.

6.4 Ensure that all substantive resolutions at a meeting of security holders are decided by a poll N/A
rather than by a show of hands.

6.5 Give security holders the option to receive communications from, and send communications N/A
to the entity and its security registry electronically.

SYNERGY 2023 ANNUAL REPORT 77

 Principle 7:
Recognise and manage risk
Recommendation

7.1 Have a committee which overseas risk, and the charter, members and meetings held by the Y
committee should be disclosed.

7.2 The board or a committee should review its risk management framework at least annually Y
and disclose whether such a review has occurred. It should also ensure the entity is operating
with due regard to the risk appetite set by the board.

7.3 Disclose its internal audit function, how the function is structured and what role it performs. Y

7.4 Disclose whether it has any material exposure to environmental or social risks and, if it does, Y
how it manages or intends to manage those risks.

Principle 8:
Remunerate fairly and responsibly
Recommendation

8.1 Have a remuneration committee and disclose the charter, members and number of Y
meetings held.

8.2 Separately disclose its policies and practices regarding the remuneration of non-executive Y
and executive directors and senior executives.

8.3 Make certain disclosures about any equity-based remuneration scheme. N/A

Principle 9:
Additional recommendations that apply only in certain cases
Recommendation

9.1 A listed entity with a director who does not speak the language should disclose the processes N/A
it has in place to ensure the director understands and contributes to discussions and is aware
of their obligations.

9.2 A listed entity outside Australia should ensure that meetings of security holders are held at a N/A
reasonable place and time.

9.3 A listed entity established outside Australia, and holds an AGM, should ensure that is external N/A
auditor attends and is available to answer queries from security holders.

78 SYNERGY 2023 ANNUAL REPORT

Notes: 9.1 Has no relevance to Synergy as all members of
Disclosure under the corporate governance the board speak and understand English.
principles is consistent with Synergy’s obligations
under the Act. The following notes are relevant 9.2-9.3 Has no relevance to Synergy as it not
to Synergy’s decision not to comply with the established outside Australia.
ASX Corporate Governance Principles and
Recommendations as outlined in Table 1.
Roles and responsibilities
1.2 Synergy does undertake appropriate checks of board and management
before proposing and appointing a director (see
note 2.1) or senior executive. The second part of As a statutory corporation, the respective duties and
recommendation 1.2, however, has no relevance to responsibilities of Synergy’s board and executive
Synergy as the corporation does not have security officers are substantially set out in the Act. The
holders. board of directors is Synergy’s governing body
and responsible to the Minister for Energy for its
1.5 Synergy has a diversity policy and outlines its performance. Subject to the Act, the board has
diversity commitment on page 80. Synergy has the authority to perform the functions, determine
an inclusion and diversity strategy and a disability policies and control the affairs of Synergy. Its central
access inclusion plan and can be found on our role is to set Synergy’s strategic direction and to
website www.synergy.net.au oversee its management and commercial activities.
In addition to matters required by law to be
2.1 The corporation has not established a
approved by the board, a board charter (available
nomination committee. As required by the Act,
on Synergy’s website) details its role, power, duties
persons are appointed to the board of Synergy by
and function. The following matters are reserved for
the Minister for Energy. Where a vacancy occurs
the board:
in the membership of the board, the board may
recommend a candidate to the Minister. The
board ensures that any candidate nominated Strategy
to the Minister has an appropriate balance of
skills, knowledge, experience, independence, and (a) Approving and guiding management in
diversity to enable the board to discharge its duties the development of Synergy’s annual strategic
and responsibilities effectively. development plan and statement of corporate
intent (SCI), known as the statement of
2.2 See Note 2.1 expectations and annual performance statement
from the 2024 reporting year.
3.3 See page 83 ‘Code of Conduct’ to learn more
about Synergy’s speaking up standard, public (b) Providing input into and final approval of
interest disclosure and whistleblower procedures. management’s development of corporate strategy
and performance objectives.
3.4 See page 83 ‘Code of Conduct’ to learn more
about Synergy’s speaking up standard and fraud (c) Further developing planning processes,
and corruption control measures. including Synergy’s strategic plan.

4.3 Has no relevance to Synergy as the corporation (d) Monitoring senior management’s performance
is not a publicly listed company and is not required and implementation of strategy, and ensuring
to release to the market any periodic corporate appropriate resources are available.
reporting.

5.1-5.3 Has no relevance to Synergy as the

corporation is not a publicly listed company and
therefore not bound by the ASX listing rules.

6.2-6.5 Has no relevance to Synergy as it does not

have investors.

8.3 Has no relevance to Synergy as it does not have

an equity-based remuneration scheme.

SYNERGY 2023 ANNUAL REPORT 79

 Governance and oversight Oversight of financial, operational
of management and capital management
(a) Appointing and removing the CEO, including (a) Approving and monitoring the progress of
approving remuneration and conditions of service major capital expenditure, capital management
of the CEO and remuneration policy and succession and acquisitions and divestitures.
plans for the CEO.
(b) Approving operating budgets and monitoring
(b) Appointing and, where appropriate, removing financial performance against the approved
the company secretary or company secretaries. budget.

(c) Approving the appointment or removal of a (c) Approving annual financial accounts and
member of staff as an executive officer. reports, including the director’s report.

(d) Noting any material change to the role of the

senior executive. Compliance and risk management
(e) Noting succession plans for senior executives. (a) Ensuring Synergy complies with all requirements
under the Act and applicable laws, including
(f) Approving performance objectives for the compliance with duties and obligations under work,
CEO and monitoring performance against those health and safety (WHS) laws.
objectives.
(b) Monitoring the effectiveness of risk
(g) Approving measurable objectives for achieving management by reviewing and approving the
gender diversity and Synergy’s progress in Synergy risk management framework and risk
achieving those objectives. appetite statement.
(h) Approving material changes to board level (c) Reviewing and approving, at least annually,
policies. Synergy’s top material risks (including WHS risks).
(i) Approving Synergy’s remuneration framework (d) Monitoring internal compliance and control,
and annual budgeted remuneration increases. including with respect to the code of conduct and
legal compliance.
(j) Approving incentive plans, including the design
and implementation of incentive schemes, if any. (e) Approving and monitoring the effectiveness
of Synergy’s system of corporate governance
practices.
Stakeholders
Monitoring and overseeing Synergy’s stakeholder
The responsibility for the management of Synergy’s
relationship strategy and its implementation.
day-to-day operations is delegated to the CEO,
who is accountable to the board. The purpose of
Board membership, Synergy’s executive officers is to assist the CEO in
the overall leadership and oversight of Synergy’s
committees and performance business and operations.
(a) Consulting with the Minister in relation to the
appointment of any person as a director of Synergy
Inclusion and Diversity
in accordance with the Act.
Synergy is committed to its vision of being a
(b) Reviewing the process for evaluating the
preferred and trusted supplier of energy, innovative
performance of the board, its committees and
products and services, and being an employer
directors.
of choice. Synergy embraces workforce diversity
(c) Handling any other matters for which the and inclusion as a source of strength. This is not
board is responsible under the Synergy committee only about visible differences in the workforce, but
charters. more importantly about recognising the strategic
advantage that comes from incorporating a
wide variety of capabilities, ideas and insights
in its decision-making, problem solving, policy
development and service delivery.

80 SYNERGY 2023 ANNUAL REPORT

Synergy believes that to continually improve its (j) Measuring, reporting on and effectively
business performance, and to achieve its strategic communicating strategies, initiatives and progress
objectives, it needs to harness the ideas and abilities to promote inclusion and diversity across the
of all our people and create an environment that organisation.
enables superior service delivery. Synergy recognises
that varied backgrounds and experiences contribute The CEO has overall accountability for the
to new perspectives and fresh ideas, and we are implementation of this policy. The board approves
committed to creating a workplace in which measurable objectives for achieving diversity in our
differences are valued and respected. Synergy organisation as set out in Synergy’s Inclusion and
facilitates this by: Diversity strategy.

(a) Treating all employees, prospective employees,

contractors, consultants and suppliers fairly Performance evaluation
and equitably regardless of their gender, age,
The Human Resources and Sustainability
sexuality, culture/ethnicity, language and religious
Committee is responsible for reviewing and
beliefs, and regardless of any disability or flexible
making recommendations to the board on matters
workplace practices.
pertaining to board performance and capability
(b) Fostering an inclusive and diverse working including; in consultation with the board chair,
environment by promoting an organisational the process for evaluating the performance of the
culture that values respect, inclusiveness and board, its committees and directors. The board is
diversity and by developing and offering working then responsible for reviewing that process.
arrangements that help meet the needs of an
In December 2022, Synergy engaged the services
inclusive workforce.
of an external facilitator to evaluate board
(c) Proactively promoting and advancing equality performance, individual directors and the Chairman,
and equity through improved employment and the scope of work included consideration of the
career development opportunities for women; structure, role and responsibilities of the board
and its committees; the skills, experience and
(d) Driving strategies and a commitment to target, participation of directors; and the conduct of board
retain and create development opportunities to meetings and deliberations.
disadvantaged groups in order to successfully
attract and retain a diverse workforce. The board also reviewed the performance of each of
its committees against the committee charters.
(e) Supporting leaders to recruit, engage and
develop career pathways for Aboriginal and Torres
Strait Islander employees; Board composition
(f) Supporting leaders to recruit, engage and In accordance with Government Trading Enterprises
develop career pathways for employees with Act 2023, the board must comprise not less than five
disability; and not more than nine directors appointed by the
Governor of Western Australia on the nomination of
(g) Providing awareness in all staff of their rights the Minister. Currently, three of Synergy’s six directors
and responsibilities with regards to equity, integrity are female.
and respect for aspects of diversity;

(h) Embedding inclusion and diversity in

our corporate strategy and ways of work by
implementing diversity strategies and seizing
opportunities and market opportunities to achieve
our diversity goals and objectives.

(i) Developing management systems, policies

and procedures that lift inclusion and diversity
performance; and

SYNERGY 2023 ANNUAL REPORT 81

 Director independence, conflicts Table 2: Details of directors

of interest and length of service

Name of Director Length of service
The board charter outlines the criteria to be
considered in assessing director independence. Michelle Shepherd Chair and Director - May 2023
These criteria are based on the premise that a
director must be independent of management Rob Bransby Director - July 2015
and free of any business or other relationship that
could materially interfere, or could reasonably Yasmin Broughton Director - November 2017
be perceived to interfere, with the exercise of the
Deputy Chair - May 2023
director’s unfettered and independent judgement.
Directors must keep the board advised on an
Peter Clough Director - November 2019
ongoing basis of any interest that could potentially
conflict with Synergy’s interests. In July 2019,
Denise McComish Director - May 2023
Synergy adopted a conflicts of interest guideline
for directors. Under the Act, a director holds office Richard Watson Director - May 2019
for such period, not exceeding three years, as is
specified in the instrument of his or her appointment Robert Cole Chairman and Director -
and is eligible for re-appointment. Periods of November 2017
appointment are structured to ensure approximately
one third of directors retire each year. Table 2 sets Retired - May 2023
out the details of each director including their length
of service. Kim Horne Director – October 2014

Deputy Chair - July 2015

Retired - May 2023

Bronwyn Barnes Director - May 2019

Retired - December 2022

Michele Dolin Director - October 2014

Deceased - October 2022

82 SYNERGY 2023 ANNUAL REPORT

Code of conduct Audit and Risk Committee
Synergy’s Code of Conduct (the Code) sets out The purpose of the Audit and Risk Committee is to
standards for appropriate ethical and professional assist the board to fulfil its corporate governance
behaviour for Synergy staff. Staff includes directors oversight responsibilities relating to financial
and employees; whether permanent, temporary, reporting, legal and regulatory requirements, risk
part-time, full-time, fixed-term contract or casual management and internal control, compliance
and contractors engaged to provide services to and audit.
Synergy. The Code sets out the fundamental values
that form the basis of and underpin Synergy’s Synergy’s website includes a link to the charter
business relationships. All staff are all responsible that governs the Audit and Risk Committee. The
for ensuring their behaviour reflects the standards members of the Audit and Risk Committee and
within the Code. individual attendances at the committee meetings
during the reporting period are set out in table 4.
Managers and the executive have a special
responsibility to support staff in achieving these
standards through leading by example and Risk management
raising awareness of the Code. Managers and the
Risk management is a fundamental activity at
executive also have a duty to investigate and act
Synergy, with risk management integrated into
accordingly where allegations of breaches of the
major business processes and there is engagement
Code are raised or suspected. The board has an
at all levels within the organisation to minimise risks
oversight responsibility to ensure that management
in all activities. Engagement is further facilitated
establishes and maintains proper frameworks,
by real time access to risk information through the
systems and processes to enable the effective
Audit, Risk and Compliance Enterprise Management
implementation of the objectives underlying
System (Empower).
the Code.
Synergy operates an enterprise-wide risk
It is every staff member’s responsibility to report any
management system which provides a standardised
breach of the Code or any matter of serious concern.
and consistent process for the identification and
It is mandatory that any breach involving fraud,
management of material risk in accordance with
corruption, collusion, dishonesty, maladministration
Synergy’s risk management policy and framework.
or misuse of Synergy funds, assets or information
Synergy has a ‘three lines of defence’ model of risk
(including the suppression of information) be
governance and management that sets out the
reported immediately. Any breach of the Code
roles and responsibilities for effective and efficient
may be grounds for disciplinary action to be taken,
risk management. Risks are assessed using a
up to and including termination of employment.
consequence-likelihood matrix, and the materiality
Matters involving potential criminal conduct may be
of risk is dependent on an inherent risk rating. Every
reported to the relevant authority.
material risk is assigned to an appropriate risk
Synergy is committed to promoting a culture of owner. Material risks are reviewed annually by the
speaking up and has a speaking up standard and risk owner and to the board Audit and
framework, and strengthened controls on reporting. Risk Committee.
The speaking up standard details a number of
The Audit and Risk Committee and the board are
different options available for staff to raise concerns
responsible for overseeing and approving the risk
including informal, formal and anonymous pathways
management policy, framework and risk appetite
as well as detailing external bodies with which issues
statement, and for ensuring that management
may be raised.
has developed and implemented an effective and
Over the 2022-23 financial year, there were 22 integrated risk management system.
alleged breaches of the Code of Conduct. Eight
Management at all levels has responsibility for
were substantiated and found to be breaches of the
managing risk in their area of control. Support is
Code of Conduct and two resulted in termination
provided by Synergy’s risk function to ensure the
and six warnings were issued. Two allegations were
framework and risk appetite are consistently and
reported to the Public Sector Commission and
effectively applied.
Corruption and Crime Commission in accordance
with Synergy’s reporting obligations.

SYNERGY 2023 ANNUAL REPORT 83

 Key performance indicators
Synergy manages its day-to-day performance
through the use of a wide range of operational key
performance indicators. The measures and targets
for these operational key performance indicators
for 2022-23 were set out in Synergy’s Statement of
Corporate Intent (SCI) and are as detailed in table 3.

Table 3:
Key performance indicators against SCI

Financial performance 2022-23 SCI targets 2022-23 result

Earnings before interest, depreciation, amoritisation and $178.1 $71.6

tax (EBITDA) ($ million)*

EBITDA margin (%) 4.9% 2.1%

Net profit after tax (NPAT) margin (%) 1.7% (0.2%)

Employee safety

Safety recordable injury frequency rate** 5.0 4.9

Aboriginal and Torres Strait Islander businesses

Synergy to award 3.5% of all contracts and purchase orders over 3.5% 3.98%
$50,000 to Aboriginal and Torres Strait Islander Businesses

Scope 1 Emissions

A reduction in Synergy’s Scope 1 emissions of at least 50% as 50% 53.16%

compared to 2005 levels.

Regulatory compliance

Zero material regulatory breaches*** Nil 1.0

Customer service

Customer Effort Score 68.2% 70.1%

*
Underlying EBITDA excludes the impacts arising from **
provisions for onerous contracts $773.7 million, other Revised target of 5.0 following adjustment of methodology to
expenses related to the Customer Offset for Synergy include modified duties injuries and noise induced hearing loss.
Compliance Breach $30.0 million, the reversal of impairment
of non-current assets $77.1 million and share of profit from ***
joint ventures of $0.3 million. Refers to legislative compliance requirements that could result
in a material regulatory breach. During the financial year, the
Electricity Review Board made final orders in relation to the
proceedings commenced by the Economic Regulation Authority
(ERA) against Synergy with respect to conduct in 2016 to 2017. A
Review of operations settlement was reached between the parties.

To avoid duplication of content, please refer to the To avoid duplication of content, please refer to “Our
front section of this Annual Report, including the environment” in the front section of this Annual Report
‘CEO’s report’, for information on the operations and for details of Synergy’s performance in relation to
financial position of Synergy, and its significant environmental regulation.
business strategies.

84 SYNERGY 2023 ANNUAL REPORT

Synergy’s operating results (c) Retail – carries out the retail operations of
Synergy, involving the pricing, sale and marketing
For the year ended 30 June 2023: of electricity and gas to end-user customers
in the SWIS. Underpinning the core functional
(a) Synergy’s statutory loss before tax was $732.6 roles fulfilled by the business are the remaining
million compared to a loss of $429.2 million for 2021- corporate support functions which undertake a
22. The results include one-off charges or benefits large range of activities designed to ensure that
associated with: the optimal level of service provision is delivered
for the benefit of the overall business.
(i) provision for onerous contracts of $773.7
million where the unavoidable costs of meeting (d) Shared services operations – undertakes the
the obligations under the contract exceed the functions of corporate planning, strategy and
economic benefits received under the contract; transformation, organisational development,
finance, legal, people management, environment,
(ii) other expenses of $30.0 million related to
health and safety, information technology and
the Customer Offset for Synergy Compliance
management, regulatory and compliance.
Breach;
Other than as set out in the front section of this
(iii) reversal of impairment of non-current
Annual Report, there have been no significant
assets of $77.1 million due to changes in the fair
changes to the nature of Synergy’s principal
value of the underlying assets; and
activities, or in Synergy’s state of affairs, during the
(iv) share of profit from joint ventures of $0.3 financial year.
million.

Excluding the above one-off charges or State Records Act 2000

benefits, the loss before tax was $6.3 million.
Synergy has an approved record keeping plan
(b) No dividends have been declared in relation to consistent with State Records Act 2000 and the
the current year. State Records Commission standards. Consistent
with Synergy’s approach to continuous records
management improvement and governance, the
Principal activities following improvement initiatives during 2022/23:

In line with the requirements of the Electricity • Reviewed, updated and received State
Corporations Act (2005) and the Electricity Government approval of its revised record
Corporations (Electricity Generation and Retail keeping plan. (The plan also proposes
Corporation) Regulations 2013, Synergy is a number of records management
functionally organised to deliver on its key purpose improvements for 2022-23).
as follows:
• Delivered training and awareness sessions
(a) Generation – responsibility for the on the OpenText document management
management of Synergy’s generating assets, system (DM) guiding how to utilise system
including the safe and reliable operations and functionality to improve business efficiency
maintenance of Synergy’s power stations and and records governance.
associated infrastructure.
• Provided recordkeeping training to 1,450 new
(b) Wholesale – responsibility for the wholesale or existing staff to ensure staff understand
trading of electricity and gas. Wholesale manages roles and responsibilities regarding records
the dispatch of Synergy’s generation fleet and governance.
independent power producer contracts, as well (All staff are required to complete mandatory
as fuel contracts. Wholesale buys electricity recordkeeping training when they join Synergy
and related products, and sells to retail and and undertake annual refresher training).
wholesale market participants under ring-fenced
arrangements. • Facilitated, via the information management
team, 2,100 requests for records management
advice and supported more than 650,000

SYNERGY 2023 ANNUAL REPORT 85

 documents being updated or registered in DM. data sharing laws.

• Finalised the transition to a new offsite storage • Deleted large volumes of historical customer
provider with improved archived file access personal information that was no longer
across generation sites and head office. required for business purposes in accordance
with the retention and disposal plan.
• Developed enterprise-controlled document
workflows to automate key document review
and approval processes and improve retention Effectiveness of Synergy’s Training
and disposal management.
and Induction Programs
• Developed enhanced DM security model
Synergy employees undertake mandatory online
including self-service access tools to support
record keeping training at induction and then yearly
business efficiency and accurate records
by way of refresher training. Synergy is currently
access.
reviewing and revising its record-keeping training
• Developed a State Records Act 2000 control programs to ensure employees understand their
register consistent with ISO 37301-2021. record keeping roles and responsibilities, not only
in relation to the DM, but in relation to all business
• Participated in the State Government’s systems that store data and information. Regular
Information Management Framework Working DM usage reports and, Annual survey data, will be
Group supporting the development of the used to measure training effectiveness. Training
Western Australian Framework. programs will be revised as necessary.

• Participated on the State Government’s

Privacy and Responsible Sharing Steering
Committee and Working Group in preparation
of forthcoming Western Australian privacy and

Table 4:
Directors, committee membership and directors’ attendance
at meetings during the reporting period.

human resources and

sustainability Audit and
Board committee risk committee

A B A B A B

Michelle Shepherd 2 2 1 1 - -

Denise McComish 2 2 - - - -

Rob Bransby 10 11 4 4 1* -

Yasmin Broughton 9 11 1 3 5 5

Peter Clough 11 11 2* - 5 5

Richard Watson 10 11 - - 4 5

Robert Cole** 8 9 3* - 4 4

Kim Horne** 9 9 4 4 1* -

Bronwyn Barnes** 5 6 2 2 1* -

Michele Dolin** 3 3 2 2 - -

A – number of meetings attended.

B – number of meetings eligible to attend at the time the

director held office during the year.

* Attendance in an ex-officio/observer capacity

**Ceased acting as a director during the year

86 SYNERGY 2023 ANNUAL REPORT

Internal audit function Human Resources and
Synergy has an independent, in-house internal
Sustainability Committee
audit team which is supplemented by external The purpose of the Human Resources and
professional services firms. The independence and Sustainability Committee is to review and approve
role of the internal audit function is governed by the or make recommendations to the board in relation
Synergy internal audit charter which is approved to Synergy’s human resources and sustainability
by the Audit and Risk Committee. The head of duties and responsibilities. Sustainability also
internal audit has direct access to the Audit and Risk includes matters relating to health, safety,
Committee members if required. environment and community relations.
The internal audit function is an integral component Synergy’s website includes a link to the charter that
of Synergy’s governance process. Its primary governs the Human Resources and Sustainability
objective is to provide independent and objective Committee. The members of the Human Resources
assurance and consulting activity designed to add and Sustainability Committee and individual
value and improve Synergy’s operations. Internal attendances at committee meetings during the
audit assists in accomplishing its objectives by reporting period are set out in table 4.
bringing a systematic, disciplined approach to
evaluating and improving the effectiveness of
Synergy’s control and governance processes.

The role of Synergy’s internal audit function is to:

(a) Periodically review compliance with policies,

operating principles and codes of conduct to
determine whether adequate controls are in place
to ensure the requirements are met.

(b) Conduct periodic assessment of the structure

and effectiveness of the internal control framework
in place over the operations to provide information
for financial reporting.

(c) Conduct periodic assessment of management

systems and processes for generating significant
and/or material disclosures.

(d) Independently evaluate and monitor the

adequacy of Synergy’s internal identification,
management and reporting of risk.

(e) Conduct periodic, independent assessments of

organisational culture.

(f) Carry out any special investigations, appraisals,

inspections and examinations in areas having
financial, operational or management impact,
including probity reviews.

(g) Undertake consultancy work either requested

by management or identified by internal audit
and report to the relevant management team the
observations and recommendations.

(h) Highlight to management any failure to take

remedial action on audit issues previously raised.

SYNERGY 2023 ANNUAL REPORT 87

 Remuneration report
The remuneration report details the remuneration
arrangements for persons having authority and
responsibility for planning, directing and controlling
the major activities of Synergy; directly or indirectly,
including any director.

Table 5:
Director remuneration

Total
Remuneration Number of
Band Directors Short term $’000 Post Employment $’000 Total $’000

Salary & fees Other Super Termination Total

2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023

0* 1 1 - - - - - - - - - -

1 - 24,999 - 3 - 14 - - - 2 - - - 16

25,000 - 49,999 - 1 - 32 - - - 3 - - - 35

50,000 - 74,999 4 4 60 62 - - 6 7 - - 66 69

75,000 - 99,999 2 - 69 - - - 7 - - - 76 -

100,000 - 124,999 - - - - - - - - - - - -

125,000 - 150,000 1 1 132 118 - - 13 12 - - 145 130

Note:
Where there is more than one director in a remuneration band
the average remuneration is shown.

**Not eligible for remuneration by Synergy due to being a

representative of the Western Australian State Government.

Remuneration governance
The Human Resources and Sustainability Committee
has delegated decision-making authority in relation
to various matters including the remuneration
arrangements for executives other than the CEO and
is required to make recommendations to the board
on other matters including CEO remuneration. The
Minister determines total remuneration for the CEO.

The Human Resources and Sustainability Committee

meets regularly through the year. The CEO is not
present during any discussions related to his own
remuneration arrangements.

88 SYNERGY 2023 ANNUAL REPORT

Table 6:
Names and positions of executives as at 30 June 2023
Executives

David Fyfe* Chief Executive Officer

Jonathan Cowper* Chief Financial Officer

Melanie Brown* Executive General Manager Trading & Governance (commenced 2 October 2022) (previously General
Counsel, Office of General Counsel and Company Secretary to 30 January 2023)

Kurt Baker* Executive General Manager Future Energy (previously General Manager Commercial to 2 October 2022)

Gary Peel Chief Information Officer (previously General Manager Transformation & Technology to 2 October 2022)

Lesley Walker Executive General Manager Customer (commenced 19 December 2022, previously Acting General Manager
Customer from 22 August 2022)

Angie Young* Executive General Manager Thermal Generation (previously General Manager Sustainability to 2 October
2022)

Colin Smith Executive General Manager Customer (departed 31 August 2022)

Dion Paunich General Manager Generation (departed 31 August 2022)

Mark Chambers Acting General Manager Wholesale (from 30 June 2022 to 2 October 2022)

Tiri Sanderson Executive General Manager People, Sustainability & Social Value (commenced 30 January 2023)

Jason Froud Acting Executive General Manager People, Sustainability & Social Value (from 2 October 2022 to 30
January 2023)

Note:
*Denotes the five highest paid executives

Table 7:
Executive remuneration

Total
Remuneration Number of
Band Staff Short term $’000 Post Employment $’000 Total $’000

Salary & fees **Other Super Termination Total

2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023

0 - 249,000 1 3 97 121 - 12 10 10 - - 107 143

250,000 - 349,999 - 1 - 212 - (143) - 16 - 247 - 332

350,000 - 449,999 7 2 379 338 26 22 28 26 - - 433 386

450,000 - 549,999 2 5 455 396 11 (11) 25 25 - 77 491 487

550,000 - 649,999 - - - - - - - - - - - -

650,000 - 749,999 - 1 - 596 - 27 - 27 - - - 650

Note:
Where there is more than one executive in a remuneration band
the average remuneration is shown.

**”Other” includes leave accruals and reportable fringe benefits.

SYNERGY 2023 ANNUAL REPORT 89

 Director remuneration statutory entitlements of accrued annual and long
service leave together with any superannuation
arrangements benefits. The CEO has a contract of employment
The Minister sets remuneration for directors in that commenced on 16 May 2022. The contract
accordance with the Act. specifies the duties and obligations to be fulfilled
by the CEO and provides that the board and CEO
Directors do not receive any retirement benefits will, early in each financial year, consult and agree
(apart from statutory superannuation) nor do they on the objectives for achievement during that year.
participate in any incentive programs. Details of the The contract can be terminated by Synergy with 26
nature and emolument of directors of Synergy are weeks’ notice, or by the CEO with 13 weeks’ notice.
set out in table 5.

Indemnification of directors
Executive remuneration and officers
arrangements
During the reporting period, a directors’ and officers’
Synergy’s executive remuneration approach is liability insurance policy was maintained to ensure
designed to attract and retain high performing that the directors and officers had adequate
individuals who consistently demonstrate coverage. The policy indemnifies directors and
exemplary behaviours consistent with Synergy’s officers of the corporation from losses arising from
values. Total remuneration for executives consists a claim or claims made against them, jointly or
of fixed remuneration comprising base salary (which severally during the period of insurance by reason
is calculated on a total cost basis, including of any wrongful act (as defined in the policy) in their
accrued annual leave and long service leave capacity as a director or officer of the corporation.
entitlements) as well as Synergy’s contribution to At the date of this report no successful claims have
superannuation funds. been made against the directors’ and officers’
component of the policy.
Synergy sets key performance indicators (KPIs) for
the CEO and other executives each year which has
both a target and stretch outcome. The CEO KPIs
Matters subsequent to the end of the
and Corporate KPIs are reviewed and approved by
the board at the beginning of the financial year. reporting year
At the end of 12 months, an assessment against There are no matters or circumstances that have
these KPIs and performance is undertaken, and arisen that are likely, in the opinion of the directors,
development plans agreed. The CEO performance to affect significantly the operations of Synergy, the
plan outcomes are discussed and approved by results of those operations, or the state of affairs of
the board. Synergy in subsequent reporting years.

Executives do not participate in any incentive plans.

Remuneration levels for executives are considered
annually through a review process that considers
market data, the performance of Synergy and the
individual, and the broader economic environment.
Details of the nature and emolument of Synergy
Michelle Shepherd
executives are set out in table 7.
Chair
Contracts of employment for executives are
unlimited in term but are generally capable
of termination on 13 weeks’ notice for poor
performance and redundancy or 26 weeks’ for any
other reason. In the event of redundancy, Synergy
provides for a capped payment including notice,
of up to 52 weeks. Executives are also entitled Yasmin Broughton
to receive on termination of employment their Deputy Chair

90 SYNERGY 2023 ANNUAL REPORT

Financial
Report
2023
 Financial
statements

For the year ended 30 June 2023

For the Electricity Generation and Retail Corporation
trading as Synergy ABN 58 673 830 106

92 SYNERGY 2023 ANNUAL REPORT

Contents

Statement of profit or loss 94

Statement of comprehensive income 95
Statement of financial position 96
Statement of changes in equity 97
Statement of cash flows 98
Notes to the financial statements 99
Section 1 - About this report 99
Section 2 - Segment information 102
Section 3 - Financial performance 104
3.1 Revenue 104
3.2 Other operating income 105
3.3 Expenses 106
3.4 Net finance costs 108
3.5 Income tax expense 108
3.6 Deferred tax 109
Section 4 - Operating capital 112
4.1 Key operating and financial risks 112
4.2 Cash and short-term deposits 118
4.3 Trade and other receivables 119
4.4 Inventories 122
4.5 Trade and other payables 123
4.6 Deferred income 124
Section 5 - Invested capital 125
5.1 Property, plant and equipment 125
5.2 Intangible assets 130
5.3 Right of use assets and lease liabilities 132
5.4 Provisions 134
5.5 Derivative financial instruments 137
5.6 Interest bearing loans and borrowings 140
Section 6 - Other items 141
6.1 Contributed equity, accumulated losses and reserves 141
6.2 Commitments and contingencies 142
6.3 Employee benefits 143
6.4 Key management personnel compensation 146
6.5 Group structure 146
6.6 Related parties 149
6.7 Accounting standards and interpretations issued but not
yet effective 151
6.8 Events after the reporting date 151
Directors’ declaration 152
Independent auditor’s report 153

SYNERGY 2023 ANNUAL REPORT 93

 Statement of profit or loss
For the year ended 30 June 2023

Group Corporation

2023 2022 2023 2022

Note $'000 $'000 $'000 $'000

Sales revenue 3.1 3,190,439 3,127,122 3,190,439 3,127,122

Other revenue 3.1 251,236 228,780 262,328 234,122
Total revenue 3,441,675 3,355,902 3,452,767 3,361,244

Fuel, networks and other direct costs 3.3 (3,568,479) (2,602,428) (3,568,405) (2,602,378)
Materials and services 3.3 (105,532) (80,745) (105,532) (80,744)
Employee expenses 3.3 (155,734) (152,726) (155,010) (152,015)
Other expenses 3.3 (330,101) (254,830) (336,860) (254,130)
Depreciation and amortisation 5.1 / 5.2 / 5.3 (34,253) (77,911) (34,223) (77,911)
Other impairment losses 3.3 54,496 (594,590) 54,496 (594,591)
Total expenses (4,139,603) (3,763,230) (4,145,534) (3,761,769)

Other operating income 3.2 8,681 8,817 13,772 8,081

Finance income 9,408 1,017 9,392 1,017

Finance costs (53,043) (32,155) (53,043) (32,155)
Net finance costs 3.4 (43,635) (31,138) (43,651) (31,138)

Share of profit from joint ventures 6.5 283 419 - -

Loss before tax (732,599) (429,230) (722,646) (423,582)

Income tax (expense)/benefit 3.5 (136) 218 - -

Loss for the year (732,735) (429,012) (722,646) (423,582)

The above statement of profit or loss should be read in conjunction with the accompanying notes.

94 SYNERGY 2023 ANNUAL REPORT

Statement of comprehensive income
For the year ended 30 June 2023

Group Corporation

2023 2022 2023 2022

Note $'000 $'000 $'000 $'000

Loss for the year (732,735) (429,012) (722,646) (423,582)

Other comprehensive income (OCI)

Items that may be reclassified subsequently to

profit or loss
Changes in fair value of cash flow hedges,
1,117 (504) 1,117 (504)
net of tax
Share of joint venture entities other comprehen-
6.5 515 12,639 - -
sive income, net of tax
6.1 1,632 12,135 1,117 (504)

Items that will not be reclassified subsequently to

profit or loss
Re-measurement gains on defined benefit plans, 6.1 146 1,475 146 1,475
net of tax
Other comprehensive income for the year, 1,778 13,610 1,263 971
net of tax
Total comprehensive loss for the year (730,957) (415,402) (721,383) (422,611)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

SYNERGY 2023 ANNUAL REPORT 95

 Statement of financial position
As at 30 June 2023

Group Corporation

2023 2022 2023 2022

Note $'000 $'000 $'000 $'000

Cash and short-term deposits 4.2 300,187 446,956 298,047 445,916

Trade and other receivables 4.3 561,663 411,522 569,364 411,979
Inventories 4.4 142,911 96,526 142,911 96,526
Derivative financial instruments 5.5 2,203 5,703 2,203 5,703
Intangible assets 5.2 38,725 53,794 38,725 53,794
Assets held for sale 5.1 - 5,357 - 5,357
Total current assets 1,045,689 1,019,858 1,051,250 1,019,275
Trade and other receivables 4.3 244,840 - 244,840 -
Property, plant and equipment 5.1 633,939 416,954 633,633 416,954
Intangible assets 5.2 301 11,149 301 11,149
Right of use assets 5.3 - 22,847 - 22,847
Derivative financial instruments 5.5 5,209 22,965 5,209 22,965
Investment in subsidiaries 6.5 - - 1,462 1,462
Investment in joint ventures 6.5 25,993 36,287 41,043 41,043
Deferred tax assets 3.6 3,427 3,562 - -
Total non-current assets 913,709 513,764 926,488 516,420
Total assets 1,959,398 1,533,622 1,977,738 1,535,695

Trade and other payables 4.5 567,031 601,258 573,667 601,207

Derivative financial instruments 5.5 216 993 216 993
Lease liabilities 5.3 24,577 21,344 24,577 21,344
Employee benefits 6.3 36,937 38,351 36,886 38,294
Provisions 5.4 210,015 144,896 210,015 144,896
Deferred income 4.6 7,572 4,656 7,572 4,656
Total current liabilities 846,348 811,498 852,933 811,390
Trade and other payables 4.5 2,083 1,918 2,083 1,918
Interest bearing loans and borrowings 5.6 161,251 161,253 161,251 161,253
Lease liabilities 5.3 156,478 183,821 156,478 183,821
Employee benefits 6.3 28,901 27,549 28,901 27,549
Provisions 5.4 1,366,294 656,173 1,366,294 656,173
Deferred income 4.6 2,667 3,077 2,667 3,077
Total non-current liabilities 1,717,674 1,033,791 1,717,674 1,033,791
Total liabilities 2,564,022 1,845,289 2,570,607 1,845,181

Net liabilities (604,624) (311,667) (592,869) (309,486)

Contributed equity 6.1 1,886,445 1,448,445 1,886,445 1,448,445

Accumulated losses (2,497,315) (1,764,726) (2,479,839) (1,757,339)
Reserves 6,246 4,614 525 (592)
Total deficit (604,624) (311,667) (592,869) (309,486)

The above statement of financial position should be read in conjunction with the accompanying notes.

96 SYNERGY 2023 ANNUAL REPORT

Statement of changes in equity
For the year ended 30 June 2023

Contributed Accumulated
equity losses Reserves Total

Note $’000 $’000 $’000 $’000

Group

Balance at 1 July 2021 1,292,744 (1,337,189) (7,521) (51,966)

Equity contribution 155,701 - - 155,701
Loss for the year - (429,012) - (429,012)
Other comprehensive income for the year 6.1 - 1,475 12,135 13,610
Total comprehensive income/(loss) for the - (427,537) 12,135 (415,402)
year, net of tax

Balance at 30 June 2022 1,448,445 (1,764,726) 4,614 (311,667)

Balance at 1 July 2022 1,448,445 (1,764,726) 4,614 (311,667)

Equity contribution 6.1 438,000 - - 438,000
Loss for the year - (732,735) - (732,735)
Other comprehensive income for the year 6.1 - 146 1,632 1,778
Total comprehensive income/(loss) for the - (732,589) 1,632 (730,957)
year, net of tax
Balance at 30 June 2023 1,886,445 (2,497,315) 6,246 (604,624)

Corporation

Balance at 1 July 2021 1,292,744 (1,335,232) (88) (42,576)

Equity contribution 155,701 - - 155,701
Loss for the year - (423,582) - (423,582)
Other comprehensive income/(loss) for the
6.1 - 1,475 (504) 971
year
Total comprehensive loss for the year, net of - (422,107) (504) (422,611)
tax
Balance at 30 June 2022 1,448,445 (1,757,339) (592) (309,486)

Balance at 1 July 2022 1,448,445 (1,757,339) (592) (309,486)

Equity contribution 6.1 438,000 - - 438,000
Loss for the year - (722,646) - (722,646)
Other comprehensive income for the year 6.1 - 146 1,117 1,263
Total comprehensive income/(loss) for the - (722,500) 1,117 (721,383)
year, net of tax
Balance at 30 June 2023 1,886,445 (2,479,839) 525 (592,869)

The above statement of changes in equity should be read in conjunction with the accompanying notes.

SYNERGY 2023 ANNUAL REPORT 97

 Statement of cash flows
For the year ended 30 June 2023

Group Corporation

2023 2022 2023 2022

Note $’000 $’000 $’000 $’000

Operating activities
Cash receipts from customers 2,727,696 3,030,660 2,725,388 3,029,549
Government stimulus received on behalf of customers 419,657 11,848 419,657 11,848
Payment in lieu of subsidies 293,256 214,814 293,256 214,814
Energy purchase and network access costs (2,995,516) (2,642,093) (2,996,558) (2,641,541)
Payments to suppliers and employees (548,653) (487,911) (546,720) (487,096)
Interest received 9,594 865 9,578 865
Interest paid (3,854) (3,383) (3,854) (3,383)
Net cash flows (used in)/from operating activities 4.2 (97,820) 124,800 (99,253) 125,056

Investing activities
Distribution received from investments 6.5 11,092 5,342 11,092 5,342
Return of capital from joint ventures 6.5 - 226 - 226
Payment for property, plant and equipment (493,949) (160,117) (493,616) (160,116)
Payment for intangible assets (4,265) (11,189) (4,265) (11,189)
Proceeds from disposal of assets 175 228 175 228
Net cash flows used in investing activities (486,947) (165,510) (486,614) (165,509)

Financing activities
Repayment of borrowings (2) (57,110) (2) (57,110)
Equity received 6.1 438,000 155,701 438,000 155,701
Net cash flows from financing activities 437,998 98,591 437,998 98,591

Net (decrease)/increase in cash and cash equivalents (146,769) 57,881 (147,869) 58,138

Cash and cash equivalents at 1 July 446,956 389,075 445,916 387,778

Cash and cash equivalents at 30 June 4.2 300,187 446,956 298,047 445,916

The above statement of cash flows should be read in conjunction with the accompanying notes.

98 SYNERGY 2023 ANNUAL REPORT

Notes to the financial statements
For the year ended 30 June 2023

Section 1 - About this report

Corporate information
The Electricity Generation and Retail Corporation, trading as Synergy (the Corporation) is a not-
for-profit entity incorporated under the Electricity Corporations Act 2005. The financial statements
comprise the financial results of the Corporation and its subsidiaries (collectively the Group), for the
year ended 30 June 2023.

The Group is primarily involved in the generation and supply of electricity, retail and wholesale sales
of electricity and gas, trading of energy, and provision of ancillary services.

The financial statements were authorised for issue in accordance with a resolution of directors on
29 August 2023.

Basis of preparation
The financial statements are general purpose financial statements which have been prepared
in accordance with the Government Trading Enterprises Act 2023 including Section 176, the
Government Trading Enterprises Regulations 2023, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board.

The Corporation has applied not-for-profit elections available in Australian Accounting Standards
where applicable.

The financial statements have been prepared on a historical cost basis, except for the derivative
financial instruments and certain other financial assets and liabilities, which have been measured
at fair value.

All values are rounded to the nearest thousand dollars ($’000) unless otherwise stated.

Accounting policies
The accounting policies adopted in the preparation of the financial statements have been
consistently applied throughout all periods presented unless otherwise stated.

Subsidiaries are fully consolidated from the date on which control is obtained by the Group and
cease to be consolidated from the date at which the Group ceases to have control. The financial
statements of subsidiaries are prepared for the same reporting period as the Corporation, using
consistent accounting policies. All intercompany balances and transactions have been eliminated.

A summary of the recognition and measurement basis used for significant accounting policies and
policies that are relevant to understanding of the Group’s position are disclosed throughout the
notes to the financial statements.

SYNERGY 2023 ANNUAL REPORT 99

 New and amended accounting standards and interpretations
All new and amended Australian Accounting Standards and Interpretations effective 1 July 2022
that are relevant to the Group have been adopted, including the following, which did not have a
significant impact on the Group:

AASB 137 Provisions, Contingent Liabilities and Contingent Assets

Amendments to AASB 137 Provisions, Contingent Liabilities and Contingent Assets have been made
to clarify that when assessing whether a contract is onerous, the cost of fulfilling the contract
comprises all costs that relate directly to the contract, which includes both the incremental costs of
fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts.

Synergy considered the methodology used in the assessment of its onerous contracts. It is noted
that the methodology used when assessing if a contract is onerous includes incremental direct
costs and an allocation of other costs related to fulfilling the contract, and therefore meets the
amended requirements of AASB 137. Therefore, there is no financial impact of the amendments on
the Group’s consolidated financial statements.

Key judgements and estimates

In applying the Group’s accounting policies, management continually evaluates judgements,
estimates and assumptions based on experience and other factors, including expectations of future
events. All judgements, estimates and assumptions made are believed to be reasonable based on
the most current set of circumstances known to management. Actual results may differ from those
judgements, estimates and assumptions.

Significant judgements, estimates and assumptions made by management in the preparation of

these financial statements are found in the following notes:

• note 3.1 - revenue;

• note 3.6 - deferred tax;

• note 4.3 - trade and other receivables;

• note 5.1 - property, plant and equipment;

• note 5.2 - intangible assets;

• note 5.3 - right of use assets and lease liabilities;

• note 5.4 - provisions;

• note 5.5 - derivative financial instruments;

• note 6.2 - commitments and contingencies; and

• note 6.3 - employee benefits.

100 SYNERGY 2023 ANNUAL REPORT

Currency
The functional and presentation currency of the Group and its subsidiaries is Australian dollars.

Transactions in foreign currencies are initially recorded in the functional currency using the
exchange rates on the date of the transaction. Monetary assets and liabilities denominated
in foreign currencies at the reporting date are translated at the exchange rates on that date.
Exchange differences are recognised in the statement of profit or loss. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange rates
prevailing at the date of the initial transaction.

Goods and services tax (GST)

Amounts shown in the financial statements are net of GST with the exception of trade receivables
and payables.

The net amount of GST recoverable from, or payable to, the taxation authority is included in
receivables or payables in the statement of financial position, and the GST component of cash
flows arising from investing and financing activities which is recoverable from, or payable to, the
taxation authority is classified as operating cash flow. Non-recoverable GST is either recognised as
part of the cost of an asset or expensed as incurred.

Comparatives
Comparatives for 30 June 2022, where appropriate, are re-presented or re-classified to ensure
comparability with the current year. There has been no restatement to comparative amounts.

SYNERGY 2023 ANNUAL REPORT 101

 Section 2 - Segment information

The Group is required to present segment information under Part 2 of The Electricity Corporations
(Electricity Generation and Retail Corporation) Regulations 2013 (the Regulations). The Regulations
do not require comparative information to be presented.

For management purposes, the Group is organised into business units based on functions and
activities. The Group has four reportable operating segments detailed as follows:

• Generation business unit (GBU) - manages operations involving the construction or operation
of generating works (as defined in the Electricity Industry Act 2004 section 3).

• Wholesale business unit (WBU) - manages operations involving the wholesale supply of
energy and related products (including pricing in respect of such acquisition or supply).

• Retail business unit (RBU) - manages operations involving the pricing, sale and marketing of
energy and related products to customers.

• Corporate shared services (CSS) - manages operations relating to the following activities:
corporate development and strategy; accounting, finance, compliance and legal matters;
human resources; information technology support; and any other operations undertaken
in connection with two or more business units. CSS includes the operations of the South
West Solar Development Holdings Pty Ltd and its subsidiary Synergy Renewable Energy
Development Pty Ltd which is in the business of providing asset management services and
vehicle management services.

Inter-segment revenues are eliminated upon consolidation. No operating segments have been
aggregated in arriving at the reportable segments of the Group. Formal arrangements exist
between:

• WBU and RBU whereby WBU sells energy to RBU in accordance with the Regulations; and

• WBU and GBU whereby GBU is compensated by WBU for both maintaining and making
available a fleet of plant, as well as the efficient utilisation of that plant.

102 SYNERGY 2023 ANNUAL REPORT

Segment information (continued)

Year ended 30 June 2023 GBU WBU RBU CSS Eliminations Group

$’000 $’000 $’000 $’000 $’000 $’000

Revenue
External customers 9,360 459,418 2,944,079 28,818 - 3,441,675
Inter-segment 391,576 1,168,826 - - (1,560,402) -

Total revenue 400,936 1,628,244 2,944,079 28,818 (1,560,402) 3,441,675

Cost of sales (626,895) (1,775,282) (2,752,564) - 1,560,328 (3,594,413)

Operating costs (286,661) (9,346) (78,823) (190,850) 74 (565,606)
Impairment reversal/(losses) 107,174 (17,373) (24,112) (11,193) - 54,496
Other income 498 114 300 7,942 - 8,854

Earnings/(loss) before interest, tax, (404,948) (173,643) 88,880 (165,283) - (654,994)

depreciation and amortisation

Depreciation and amortisation (24,297) (3,503) (991) (5,462) - (34,253)

Finance income - - - 9,407 - 9,407

Finance costs (14,472) (32,958) - (5,612) - (53,042)
Net finance costs (14,472) (32,958) - 3,795 - (43,635)

Segment (loss)/ profit (443,717) (210,104) 87,889 (166,950) - (732,882)

Unallocated items
Share of profit from joint ventures
283
and associate
Income tax expense (136)
Loss for the year (732,735)

SYNERGY 2023 ANNUAL REPORT 103

 Section 3 - Financial performance

3.1 Revenue

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Sale of energy - retail customers 2,822,269 2,792,186 2,822,269 2,792,186

Sale of energy - wholesale customers 304,335 272,472 304,335 272,472
Products and services 43,800 39,414 43,800 39,414
Account fees and charges 20,035 23,050 20,035 23,050
Total sales revenue 3,190,439 3,127,122 3,190,439 3,127,122

Payment in lieu of subsidies 240,707 216,362 240,707 216,362

Contract works and grants - 13 - 13
Government grants 10,529 12,405 10,529 12,405
Distribution received - - 11,092 5,342
Total other revenue 251,236 228,780 262,328 234,122

Recognition and measurement

Revenue is recognised when or as each performance obligation is satisfied at the amount of the
transaction price allocated to that performance obligation.

Sale of energy and account fees and charges

Energy sales represents the sale of gas and electricity to retail (residential and business) and
wholesale customers. Residential sales consist of short term, day-by-day contracts and revenue
is recognised on a day-by-day basis upon the delivery of energy to customers. Business and
wholesale customers are on longer contracts and the supply of energy is considered to be a single
performance obligation, and revenue is recognised when the supply of energy has been delivered
to the customer. If consideration includes a variable component, it is adjusted for the estimated
impact of the variable component at the point of recognition and re-estimated at every
reporting period.

Revenue from account fees and charges is not considered a separate performance obligation and
is therefore recognised immediately along with revenue from sale of energy to customers.

Products and services

Revenue from the sale of products and services is recognised at a point in time when the goods or
services have been transferred to the customer.

Payment in lieu of subsidies

Payment in lieu of subsidies is recognised as other revenue when received and includes the Tariff
Equalisation Contribution (TEC) and System Security Transition Payment (SSTP). These subsidies
represent payments to equalise network tariffs across the state and provide support for running
plant in an uneconomical manner, under recovery of account fees and charges from eligible
concession card holders and costs incurred in administering government initiatives.

104 SYNERGY 2023 ANNUAL REPORT

3.1 Revenue (continued)

Key estimates
A portion of the Group’s retail energy revenue is based on estimated unread energy consumption.
Unread energy consumption represents the estimated value of electricity and gas provided to
customers but not invoiced. This assessment is based on historical data adjusted for measurable
changes in consumption patterns during the estimation period.

3.2 Other operating income

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Development fee income - 3,657 - 3,657

Other operating income 8,681 5,160 13,772 4,424
Total other operating income 8,681 8,817 13,772 8,081

SYNERGY 2023 ANNUAL REPORT 105

 3.3 Expenses

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Fuel, electricity and other purchases (i) (1,670,655) (911,475) (1,670,655) (911,474)
Network access costs (1,222,529) (1,289,269) (1,222,455) (1,289,220)
Renewable energy certificates (ii) (177,746) (192,860) (177,746) (192,860)
Market participant costs (115,896) (109,370) (115,896) (109,370)
Commodity charges (iii) (381,653) (99,454) (381,653) (99,454)
Total fuel, networks and other direct (3,568,479) (2,602,428) (3,568,405) (2,602,378)
costs

i. Community service obligations

The State Government reimburses the Corporation for the cost of community service obligations
(CSOs), including energy assistance payments (EAP). This entitlement to reimbursement is
recognised in the statement of profit or loss when the right to receive the payment is established.
Where CSOs are not fully reimbursed, the cost is included in fuel, electricity and other purchases.

The total cost of unfunded renewable energy buyback scheme (REBS), and distributed energy
buyback scheme (DEBS) costs included above is $69.0 million (2022: $37.5 million).

Included in fuel, electricity and other purchases is an expense for provision for onerous contract of
$498.2 million (2022: nil). Refer to note 5.4 for details.

ii. Renewable energy certificates

The Renewable Energy (Electricity) Act 2000 requires certain purchasers to surrender a specified
number of renewable energy certificates for the electricity that they acquire during the year.
Compliance is achieved by either surrendering the required number of Large-scale Generation
Certificates (LGCs) to the Clean Energy Regulator (CER), or by paying a penalty for the shortfall in
surrendered certificates. The legislation provides a three-year window whereby a generator may
surrender certificates and receive a refund for any shortfall charge previously paid.

In both the 2019 and 2020 calendar years Synergy paid a shortfall penalty to the CER instead of
surrendering LGCs to meet its renewable energy liabilities. During the financial year, a shortfall
penalty of $60.5 million has been refunded to Synergy by surrendering LGCs to meet the 2019 and
2020 calendar year shortfalls. The penalty refund is currently recognised as an offset to renewable
energy certificates.

iii. Provision for onerous contract

Included in commodity charges is a credit amount of $12.9 million (2022: $29.3 million) in relation
to a provision for onerous contract which has been unwound as a credit to the profit or loss in the
current year, and an expense for an additional provision recognised of $275.5 million (2022: $6.1
million). Refer to note 5.4 for details.

106 SYNERGY 2023 ANNUAL REPORT

3.3 Expenses (continued)

Note Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Materials (56,504) (44,024) (56,504) (44,024)

Maintenance services (49,028) (36,721) (49,028) (36,720)
Total materials and services (105,532) (80,745) (105,532) (80,744)

Wages and salaries (131,720) (104,024) (131,067) (103,380)

Termination benefits (8,403) (34,715) (8,403) (34,715)
Post employment benefits (15,611) (13,987) (15,540) (13,920)
Total employee expenses (155,734) (152,726) (155,010) (152,015)

Audit services - Office of Auditor General (530) (681) (496) (651)

Bank fees and charges (3,361) (4,299) (3,360) (4,298)
Communication and advertising (8,325) (8,883) (8,324) (8,882)
Commissions (4,056) (2,828) (4,056) (2,828)
Contractors and consultants (211,025) (160,387) (207,534) (159,881)
Insurance (14,353) (10,814) (14,330) (10,808)
Legal fees (4,183) (4,757) (4,180) (4,757)
Metering (7,612) (9,215) (7,612) (9,215)
Rental expense (4,745) (5,296) (4,612) (5,295)
Printing (1,333) (1,329) (1,332) (1,329)
Computer software (5,103) (5,822) (4,954) (5,822)
Decommissioning expense 5.4 (11,342) (5,624) (11,342) (5,624)
Revaluation of electricity derivatives 5.5 (16,293) (14,033) (16,293) (14,033)
Other expenses (37,840) (20,862) (48,435) (20,707)
Total other expenses (330,101) (254,830) (336,860) (254,130)

Allowance for impairment of receivables 4.3 (23,561) (13,344) (23,561) (13,344)

Allowance for inventory obsolescence 933 (11,762) 933 (11,762)
Impairment of investment in joint ventures - - - (1)
Impairment reversal/(loss) of non-current
5.1-3 77,124 (569,484) 77,124 (569,484)
assets
Impairment losses 54,496 (594,590) 54,496 (594,591)

During the financial year, the Electricity Review Board (ERB) made final orders in relation to the
proceedings commenced by the Economic Regulation Authority (ERA) against the Group. A
settlement was reached whereby the Group will implement a customer offset credit totalling $30
million, distributed across eligible non-contestable customer accounts, which has been recognised
in other expenses.

SYNERGY 2023 ANNUAL REPORT 107

 3.4 Net finance costs

Note Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Interest income 9,408 1,017 9,392 1,017

Total finance income 9,408 1,017 9,392 1,017

Interest on loans and borrowings (4,097) (3,243) (4,097) (3,243)

Lease interest expense (24,357) (26,156) (24,357) (26,156)
Unwinding of discount on provisions (23,799) (2,365) (23,799) (2,365)
Interest on defined benefit fund 6.3 (790) (391) (790) (391)
Total finance costs (53,043) (32,155) (53,043) (32,155)

Net finance costs (43,635) (31,138) (43,651) (31,138)

3.5 Income tax expense

Reconciliation of income tax expense to the effective tax rate:

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Loss before income tax (732,599) (429,230) (722,646) (423,582)

Income tax using the Corporation tax rate of 30% 219,780 128,769 216,794 127,075

Effect of:
Non-deductible items 9,278 246 9,278 246
Other allowable deductions (10) (279) 3,096 1,418
Under provided tax benefit in respect of prior year 2,247 426 2,247 426
Utilisation of prior year tax losses previously not
- 36,080 - 36,080
recognised
Deductible temporary differences not recognised (231,431) (165,024) (231,415) (165,245)
Income tax (expense)/benefit (136) 218 - -

Income tax benefit includes:

Current tax benefit/(expense) 40,140 (36,080) 40,249 (36,080)
Write-back of previously derecognised deferred tax assets - 36,080 - 36,080
Deductible temporary differences not recognised (40,140) - (40,249) -
Tax (profit)/loss current year (136) 218 - -
Income tax (expense)/benefit in (136) 218 - -
statement of profit or loss

The tax rate used in the reconciliation is the corporate tax rate of 30% payable by Australian
corporate entities on taxable profits under Australian tax law.

108 SYNERGY 2023 ANNUAL REPORT

3.5 Income tax expense (continued)

Recognition and measurement

The Corporation operates under the National Taxation Equivalent Regime (NTER). While tax
equivalent payments are remitted to the Department of Treasury, the Corporation’s tax is subject to
Australian Taxation Office (ATO) administration. The calculation of the liability in respect of income
tax is governed by the Income Tax Administration Acts and the NTER guidelines as agreed by the
State Government.

Income tax equivalent expense comprises current and deferred tax. Income tax equivalent expense,
referred to as income tax in these financial statements, is recognised in the statement of profit
or loss except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in other comprehensive income.

Income tax expense includes tax adjustments for permanent and timing differences. Permanent
differences represent the differences for transactions which will never be included in taxable
income or loss, although they are recognised in the accounting profit or loss. Timing differences
represent the differences between the time transactions are recognised for accounting purposes
and when they are recognised for tax purposes.

Income tax expense is calculated based on amounts of income which are assessable for tax and
amounts of expenditure which are deductible for tax, irrespective of when that assessment or
deduction arises. Income tax payable reflects amounts which are assessable or deductible in the
current year, which does not always align with the timing of recognition in the statement of profit
or loss.

Synergy has not formed a tax consolidated group. The tax losses of the subsidiaries cannot be used
to offset against the Group’s taxable income. Therefore, the income tax liability of the Group will
represent the income tax liability of the Corporation and each subsidiary.

3.6 Deferred tax

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000
Deferred income tax relating to:
Trade and other receivables 34,873 30,966 34,873 30,966
Intangible assets 14,659 13,927 14,659 13,927
Property, plant and equipment 82,296 134,901 82,296 134,901
Right of use asset 8,842 - 8,842 -
Trade and other payables 789 1,306 781 1,292
Lease liabilities 45,957 59,931 45,957 59,931
Employee benefits 33,773 33,921 33,758 33,904
Provisions 396,592 157,382 396,592 157,382
Carried forward tax losses and R&D credits 79,845 37,440 76,441 33,909
Total deferred tax asset 697,626 469,774 694,199 466,212

Inventories (16,870) (6,677) (16,870) (6,677)

Derivative financial instruments (2,159) (8,303) (2,159) (8,303)
Right of use asset - (5,344) - (5,344)
Total deferred tax liability (19,029) (20,324) (19,029) (20,324)
Total de-recognition of deferred tax asset (675,170) (445,888) (675,170) (445,888)
Net deferred tax asset 3,427 3,562 - -

SYNERGY 2023 ANNUAL REPORT 109

 3.6 Deferred tax (continued)

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000
The (increase)/ decrease in deferred tax relates to:

Trade and other receivables 3,907 6,588 3,907 6,588

Derivative financial instruments 6,479 6,421 6,479 6,421
Right of use asset 14,186 20,237 14,186 20,237
Intangible assets 732 9,245 732 9,245
Trade and other payables (517) (4,309) (511) (4,311)
Lease liabilities (13,974) (7,101) (13,974) (7,101)
Employee benefits (104) 9,583 (102) 9,575
Provisions 239,210 6,655 239,210 6,655
Business related costs - (10) - -
Inventories (10,193) 9,495 (10,193) 9,495
Property, plant and equipment (52,605) 107,133 (52,605) 107,133
Carried forward tax losses and R&D credits 42,405 (34,555) 42,532 (34,773)
De-recognition of deferred tax asset (229,661) (129,164) (229,661) (129,164)
Amount recognised in statement of profit and loss (135) 218 - -

Derivative financial instruments (335) 151 (335) 151

Defined benefit re-measurement (44) (443) (44) (443)
De-recognition of deferred tax asset 379 292 379 292
Amount recognised in OCI - - - -

Total movement (135) 218 - -

110 SYNERGY 2023 ANNUAL REPORT

3.6 Deferred tax (continued)

Recognition and measurement

Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the taxation authorities. Deferred tax is calculated using the liability method on
temporary differences between the tax bases of assets and liabilities and their carrying amounts for
accounting purposes at the reporting date.

Deferred income tax liabilities and assets are recognised for all temporary differences except for
the following:

• temporary differences associated with investments in subsidiaries and interests in joint

ventures, when the timing of the reversal of the temporary differences can be controlled;

• where it is probable that the temporary differences will not reverse in the foreseeable future;
or

• where taxable profit will not be available against which the temporary differences can be
utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.

Key estimates

The Group and Corporation have tax losses and research and development (R&D) credits that are
available indefinitely for offsetting against future taxable profits. As at 30 June 2023, deferred tax
assets have not been recognised in respect of capital temporary differences of $15.1 million for the
Group (2022: $14.9 million) and $19.6 million for the Corporation (2022: $19.6 million), and in the form
of tax losses and R&D credits of $76.4 million for the Group and the Corporation (2022: $34.0 million)
as there are no tax planning opportunities or other evidence of recoverability in the near future.

SYNERGY 2023 ANNUAL REPORT 111

 Section 4 - Operating capital

4.1 Key operating and financial risks

The Group is exposed to operational, market, credit and liquidity risks.

The board of directors oversee the management of these risks, supported by an audit and risk
committee (ARC) that advises on financial risks and the appropriate financial risk governance
framework for the Group.

The ARC is assisted in its governance oversight role by an internal audit function. Internal audit
undertakes both regular and ad hoc reviews of risk management controls and procedures, the
results of which are reported to the ARC.

The board of directors approves policies for managing risk, which are summarised below.

4.1.1 Operational risk management

Operational risk is made up of the following:

• single source supply risk; and

• climate risk.

Single source supply risk

The Group is exposed to single sources of supply in relation to both its coal and gas commodity
purchases and networks access. As such these suppliers represent a significant source of failure risk
and the Group seeks to protect itself by endeavouring to include protective rights under its supply
contracts. Despite these contractual rights, the Group cannot entirely ensure that the supplier will
continue to supply. From time to time, the Group enters into discussions with its suppliers to address
any potential interruptions to supply.

Climate risk

The Group is exposed to climate risk. Whilst the demand for new technologies and carbon
management are expected to grow to support decarbonisation, climate risk impacts the demand
for fossil fuels and cost of insurance.

The State Government has committed to decarbonisation outcomes in the South West
Interconnected System (SWIS) by 2030, with the replacement of coal by renewables and storage to
support emission reductions.

Coal currently plays a critical role for baseload supply, but with an ageing fleet and growing
renewables driving down average prices and increasing intra-day volatility, the role of coal is
reduced. As coal is retired and use of renewables increase, the market will require investment
for reliability. The Group is currently implementing strategies, including batteries and other
technologies to improve flexibility and capacity.

112 SYNERGY 2023 ANNUAL REPORT

4.1 Key operating and financial risks (continued)

4.1.2 Market risk management

Market risk is made up of the following:

• interest rate risk;

• foreign currency risk; and

• commodity price risk.

The Group enters into derivatives in order to manage market risks. All such transactions are carried
out within approved guidelines. Generally, the Group seeks to apply hedge accounting in order to
manage volatility in the statement of profit or loss.

All derivative activities for risk management purposes are carried out by specialist teams that have
appropriate skills, experience and supervision. It is the Group’s policy that no speculative trading in
derivatives may be undertaken.

Interest rate risk

Interest rate risk is the risk that the Group’s financial position will fluctuate due to changes in market
interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily
to financial instruments with floating interest rates including long-term debt obligations and cash
and short-term deposits.

The Group manages its interest rate risk by a mix of fixed and variable rate borrowings, based on
management’s best estimates of future market conditions. The Group’s policy is to limit its exposure
to changes in interest rates on borrowings to certain percentages in accordance with the duration
of the borrowing.

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments
was:

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Financial assets - 210,000 - 210,000

Financial liabilities (297,168) (321,277) (297,168) (321,277)
Total fixed rate instruments (297,168) (111,277) (297,168) (111,277)

Financial assets 300,187 236,956 298,047 235,916

Financial liabilities (45,139) (45,142) (45,139) (45,142)
Total variable rate instruments 255,048 191,814 252,908 190,774

SYNERGY 2023 ANNUAL REPORT 113

 4.1 Key operating and financial risks (continued)

For variable rate instruments, a change of 25 basis points in interest rates at the reporting date,
with all other variables held constant, would have increased/ (decreased) profit or loss and other
comprehensive income by the amounts shown below.

- 25 basis points + 25 basis points

Carrying Effect on Effect on Effect on Effect on

amount profit equity profit equity
before tax before tax

$’000 $’000 $’000 $’000 $’000

Group - 2022
Cash and cash equivalents 236,956 (592) - 592 -
Unsecured loans and
(45,142) 113 - (113) -
borrowings

Group - 2023
Cash and cash equivalents 300,187 (750) - 750 -
Unsecured loans and
(45,139) 113 - (113) -
borrowings

Corporation - 2022
Cash and cash equivalents 235,916 (590) - 590 -
Unsecured loans and
(45,142) 113 - (113) -
borrowings

Corporation - 2023
Cash and cash equivalents 298,047 (745) - 745 -
Unsecured loans and
(45,139) 113 - (113) -
borrowings

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes
in foreign exchange rates relates primarily to the Group’s operating and capital expenditure. The
currency giving rise to this risk is primarily the United States Dollar (USD).

114 SYNERGY 2023 ANNUAL REPORT

4.1 Key operating and financial risks (continued)

The Group manages its foreign currency risk by hedging transactions. When the nature of the hedge
relationship is not an economic hedge, it is the Group’s policy to negotiate the terms of the hedging
derivatives to match the terms of the underlying hedge items to maximise hedge effectiveness. The
Group hedges its exposure to fluctuations by using foreign currency swaps and forward exchange
contracts. At 30 June 2023, the Group hedged 100% of its foreign currency purchases for which
highly probable forecasted transactions existed at the reporting date; the average deal rates were
USD 0.6990 (2022: USD 0.7176 and EUR 0.6251).

The Group’s exposure to foreign currency risk at end of the reporting period was as follows, based
on notional amounts:

USD EUR

2023 2022 2023 2022

Group and Corporation $'000 $'000 $'000 $'000

Estimated forecast purchases 2,318 23,632 - 8,018

Forward exchange contracts (2,318) (23,632) - (8,018)
Net exposure - - - -

A 10% strengthening or weakening of the Australian dollar against the above currencies at the
reporting date, with all other variables held constant, would not have a material impact on the
Group’s equity or the profit or loss in the current period.

Commodity price risk

Commodity price risk arises from an electricity commodity derivative. A change of 10% in the
market price of the commodity would have increased/ (decreased) profit or loss and other
comprehensive income by the amounts shown below. This analysis assumes that all other variables,
in particular interest rates, remain constant.

-10% +10%

Carrying Effect on Effect on Effect on Effect on

amount profit equity profit equity
before tax before tax

Group and Corporation $’000 $’000 $’000 $’000 $’000

2022
Embedded electricity derivatives 28,267 5,867 - (5,867) -

2023
Embedded electricity derivatives 6,672 4,518 - (4,518) -

SYNERGY 2023 ANNUAL REPORT 115

 4.1 Key operating and financial risks (continued)

4.1.3 Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating
activities (primarily trade receivables) and from its financing activities, including deposits with banks
and financial institutions, foreign exchange transactions and other financial instruments.

Customer credit risk is managed under the Group’s established policy, procedures and control
relating to customer credit risk management. The Group has credit policies under which the
creditworthiness of contestable retail and wholesale customers is assessed before credit is offered.
The Group’s review includes external ratings, where available. Purchase limits are established for
each customer and customers that fail to meet the Group’s benchmark creditworthiness may
transact with the Group only on a prepayment basis or with a security in an acceptable form. The
Group regularly reviews the creditworthiness of its counterparties.

An impairment analysis is performed at each reporting date. The maximum exposure to credit risk
at the reporting date is the carrying value of each class of financial assets disclosed in note 4.3.

4.1.4 Liquidity risk management

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall
due. The liquidity position of the Group is managed to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group monitors its risk to a shortage of funds using a liquidity planning tool. The Group’s
objective is to maintain a balance between continuity of funding and flexibility through the use of
the WATC loan facility.

116 SYNERGY 2023 ANNUAL REPORT

4.1 Key operating and financial risks (continued)

The table below summarises the maturity profile of the Group’s financial liabilities based on
contractual undiscounted payments:

3-12
< 3 months 1-5 years > 5 years Total
months

$'000 $'000 $'000 $'000 $'000

Group
Year ended 30 June 2022
Interest-bearing loans and
- - (45,018) (116,235) (161,253)
borrowings
Trade and other payables (491,092) (107,031) (3,880) (1,173) (603,176)
Lease liabilities (11,365) (34,094) (171,647) (108,066) (325,172)
Derivatives (993) - - - (993)
Total financial liabilities (503,450) (141,125) (220,545) (225,474) (1,090,594)

Year ended 30 June 2023

Interest-bearing loans and
- - (45,018) (116,233) (161,251)
borrowings
Trade and other payables (438,693) (125,677) (3,406) (1,338) (569,114)
Lease liabilities (11,680) (35,039) (154,552) (75,675) (276,946)
Derivatives (216) - - - (216)
Total financial liabilities (450,589) (160,716) (202,976) (193,246) (1,007,527)

Corporation
Year ended 30 June 2022
Interest-bearing loans and
- - (45,018) (116,235) (161,253)
borrowings
Trade and other payables (491,041) (107,031) (3,880) (1,173) (603,125)
Lease liabilities (11,365) (34,094) (171,647) (108,066) (325,172)
Derivatives (993) - - - (993)
Total financial liabilities (503,399) (141,125) (220,545) (225,474) (1,090,543)

Year ended 30 June 2023

Interest-bearing loans and
- - (45,018) (116,233) (161,251)
borrowings
Trade and other payables (445,329) (125,677) (3,406) (1,338) (575,750)
Lease liabilities (11,680) (35,039) (154,552) (75,675) (276,946)
Derivatives (216) - - - (216)
Total financial liabilities (457,225) (160,716) (202,976) (193,246) (1,014,163)

The disclosed financial derivative instruments in the above table are the gross undiscounted cash
flows. These amounts may be settled gross or net, however the impact is not material on the Group.

SYNERGY 2023 ANNUAL REPORT 117

 4.2 Cash and short-term deposits

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Cash at bank and on hand 300,187 236,956 298,047 235,916

Short-term deposits equal to and less than 3 months - 210,000 - 210,000
Total cash and cash equivalents 300,187 446,956 298,047 445,916

Cash at bank earns interest at floating rates based on daily bank deposit rates. Term deposits
earn interest at fixed rates based on bank deposit rates at the inception of the term deposit. Term
deposits are for varying periods of up to three months.

Reconciliation of loss for the year to net cash flows from operating activities

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Loss for the year (732,735) (429,012) (722,646) (423,582)

Adjustments for:
Profit/(loss) on disposal of plant and equipment (120) 1,384 (120) 1,384
Depreciation and amortisation 34,253 77,911 34,223 77,911
Impairment loss on trade receivables 23,561 13,344 23,561 13,344
Impairment (reversal)/loss on inventories (933) 11,762 (933) 11,762
Impairment (reversal)/loss of other assets (77,124) 569,484 (77,124) 569,485
Non cash interest expense 23,799 2,365 23,799 2,365
Share of profit from joint ventures (283) (419) - -
(729,582) 246,819 (719,240) 252,669

Changes in trade and other receivables (17,446) (71,885) (24,790) (72,245)

Changes in inventories (45,452) 13,658 (45,452) 13,658
Changes in intangible assets 14,991 (24,045) 14,991 (24,045)
Changes in derivative financial instruments 21,596 21,406 21,596 21,406
Changes in tax assets and liabilities 135 (181) - 37
Changes in trade and other payables (76,679) (26,548) (69,374) (13,991)
Changes in provisions and others 734,617 (34,424) 723,016 (52,433)
Net cash (used in)/from operating activities (97,820) 124,800 (99,253) 125,056

118 SYNERGY 2023 ANNUAL REPORT

4.3 Trade and other receivables

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Trade receivables 180,362 168,672 183,714 169,064

Unbilled receivables 222,655 215,510 227,001 215,605
Inter-group receivables - - 190 -
Commodity swaps 217 - 217 -
Other receivables 4,933 12,636 4,834 12,639
Prepayments 153,496 14,704 153,408 14,671
Total current trade and other receivables 561,663 411,522 569,364 411,979

Equipment purchase deposits 244,840 - 244,840 -

Total non-current trade and other receivables 244,840 - 244,840 -

Recognition and measurement

Trade and other receivables that do not have a significant financing component are initially
recognised at their transaction price and subsequently measured at amortised cost less an
allowance for expected credit losses.

Other financial assets, including commodity swaps, that do not satisfy the contractual cash
flow and business model tests are subsequently measured at fair value. Subsequent fair value
movements are recognised in the income statement.

Non-current equipment purchase deposits are deposits and advances for property, plant and
equipment relating to the development of renewable generation and energy storage infrastructure
(2022: nil).

The Group applies the ‘simplified approach’ to trade receivable balances. Uncollectable amounts
are determined using the expected loss impairment model. Collectability and impairment are
assessed on a regular basis. Subsequent recoveries of amounts previously written off are credited
against impairment losses in the statement of profit or loss.

The Group’s customers are required to pay in accordance with agreed payment terms. Trade
receivables are not interest-bearing and are generally on terms of 7 to 30 days. For terms and
conditions relating to related party receivables, refer to note 6.6.

Trade, unbilled and inter-group receivables are shown net of expected credit loss allowances.

SYNERGY 2023 ANNUAL REPORT 119

 4.3 Trade and other receivables (continued)

Key estimates

Allowance for expected credit losses

The Group applies judgement when assessing expected credit losses on trade receivables. Evidence
of a requirement for an allowance may include indications that the customer is experiencing
significant financial difficulty, and observable data indicating a decrease in the estimated future
cash flows, such as changes in arrears or economic conditions that correlate with defaults.

The following factors have been considered by the Group in assessment of expected losses for the
current year:

• observable changes to customer behaviour arising from government stimulus measures and
those mandated measures such as reduced disconnections;

• the electricity credits announced in May 2023 as part of the cost of living support package in
the 2023-24 State Budget, including the $500 Household Electricity Credit for EAP recipients,
$400 Household Electricity Credit for other households and a $650 credit for small businesses
consuming up to 50MWh of electricity per annum.

Commodity swaps

The Group has entered into an agreement to deliver gas to a counterparty which will be returned
at a future date. The fair value of the commodity swap asset is estimated at the present value of
future commodity receipts.

120 SYNERGY 2023 ANNUAL REPORT

4.3 Trade and other receivables (continued)

Ageing of trade and inter-group receivables

Past due

Total Current < 30 days 30-90 days >90 days

$’000 $’000 $’000 $’000 $’000

Group
2022
Gross carrying amount 250,019 112,497 36,225 26,685 74,612
Expected credit losses (81,347) (5,291) (5,206) (9,349) (61,501)
Trade receivables 168,672 107,206 31,019 17,336 13,111

2023
Gross carrying amount 274,376 131,279 34,871 25,786 82,440
Expected credit losses (94,014) (6,102) (6,134) (10,483) (71,295)
Trade receivables 180,362 125,177 28,737 15,303 11,145

Corporation
2022
Gross carrying amount 250,411 112,889 36,225 26,685 74,612
Expected credit losses (81,347) (5,291) (5,206) (9,349) (61,501)
Trade and inter-group receivables 169,064 107,598 31,019 17,336 13,111

2023
Gross carrying amount 277,918 134,713 34,871 25,786 82,548
Expected credit losses (94,014) (6,102) (6,134) (10,483) (71,295)
Trade and inter-group receivables 183,904 128,611 28,737 15,303 11,253

Allowance for expected credit losses

As at 30 June 2023, an allowance for expected credit losses on trade receivables of $94.0 million
(2022: $81.3 million) and $22.8 million (2022: $22.1 million) on unbilled receivables was recognised in
the Group and in the Corporation.

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000
Allowance for impairment of receivables
Balance at 1 July (103,443) (101,757) (103,443) (101,757)
Charge for the year, net of recoveries (23,561) (13,344) (23,561) (13,344)
Amounts written-off during the year 10,240 11,658 10,240 11,658
Balance as at 30 June (116,764) (103,443) (116,764) (103,443)

SYNERGY 2023 ANNUAL REPORT 121

 4.3 Trade and other receivables (continued)

The Group’s expected credit loss allowance for receivables is made up of items that have been
individually assessed to be impaired and items that have been collectively assessed to be impaired.
The model provides a specific provision for customers who are already assessed to be impaired, and
a collective provision for the balance of the portfolio utilising a statistical approach to predict an
eventual loss event based on the:

• probability of default: likelihood that a customer will not be able to meet their obligation to
pay;

• loss given default: for customers in default - the exposure likely to be lost; and

• exposure default: exposure at the point when a customer enters default.

This methodology is forward looking and enables the use of early warning detection techniques to
identify emerging risks in the portfolio driven by systematic and unsystematic factors.

4.4 Inventories

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Fuel 113,460 79,624 113,460 79,624

Spares and consumables 29,451 16,902 29,451 16,902
Total inventories 142,911 96,526 142,911 96,526

Recognition and measurement

Inventories are valued at the lower of cost and net realisable value. Cost is determined using the
weighted average cost method. Inventories determined to be obsolete or damaged are written
down to net realisable value, being the estimated selling price less selling costs. Spares and
consumables include adjustments to revalue at the lower of cost and net realisable value of $46.6
million (2022: $48.4 million).

During 2023 the Corporation sourced fuel inventories from interstate to mitigate the risk of possible
coal supply disruptions, funded in part by the SSTP. $5.3 million of inventory write-downs have been
recognised as an expense to revalue at the lower of cost and net realisable value.

122 SYNERGY 2023 ANNUAL REPORT

4.5 Trade and other payables

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Trade payables and accruals 515,160 591,335 521,796 591,284

Other payables 44,861 3,695 44,861 3,695
Accrued salaries 5,981 5,442 5,981 5,442
Interest accrued 1,029 786 1,029 786
Total current trade and other payables 567,031 601,258 573,667 601,207

Deferred costs 2,083 1,918 2,083 1,918

Total non-current trade and other payables 2,083 1,918 2,083 1,918

Recognition and measurement

Trade and other payables are recognised initially at fair value net of transaction costs and
subsequently at amortised cost. For terms and conditions relating to related party payables, refer to
note 6.6.

During 2023 the Corporation received $419.6 million (net of GST) from the State Government to
provide a $400 electricity credit for residential households, announced as part of the 2022-23 State
Budget and allocated to customer accounts in July 2022. At 30 June 2023, trade payables and
accruals include an amount of $14.7 million (2022: $22.3 million), representing the credit balance on
customer accounts for the unutilised portion of one-off government credits.

SYNERGY 2023 ANNUAL REPORT 123

 4.6 Deferred income

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Current 7,572 4,656 7,572 4,656

Non-current 2,667 3,077 2,667 3,077
Deferred income 10,239 7,733 10,239 7,733

Represented by:
Deferred lease income 7,161 3,488 7,161 3,488
Unearned revenue 3,078 4,245 3,078 4,245
Deferred income 10,239 7,733 10,239 7,733

Recognition and measurement

Deferred lease income

The Group received an upfront lease payment in relation to the Emu Downs Wind Farm (EDWF) off-
take agreement, which was recorded at cost, deferred and recognised as revenue on a straight-line
basis over the term of the lease.

Unearned revenue

The Group receives prepaid amounts from the sale of energy, which are deferred and recognised
upon delivery.

124 SYNERGY 2023 ANNUAL REPORT

Section 5 - Invested capital

5.1 Property, plant and equipment

Plant and Work in

Group Note Land Buildings equipment progress Total

$'000 $'000 $'000 $'000 $'000

At Cost
Balance at 1 July 2021 6,334 161,174 2,561,905 54,219 2,783,632
Additions - 1,453 13,091 165,830 180,374
Transfers 5.2 - 2,473 (2,678) (28,779) (28,984)
Disposals/ write-off - - (49,782) - (49,782)
Decommissioning
5.4 - - 37,744 - 37,744
adjustment
Balance at 30 June 2022 6,334 165,100 2,560,280 191,270 2,922,984

Balance at 1 July 2022 6,334 165,100 2,560,280 191,270 2,922,984

Additions - 6 39,243 81,236 120,485
Transfers 5.2 - - 42,355 (43,910) (1,555)
Disposals/ write-off - (508) (314) - (822)
Decommissioning
5.4 - - 17,433 - 17,433
adjustment
Balance at 30 June 2023 6,334 164,598 2,658,997 228,596 3,058,525

Depreciation and impairment

Balance at 1 July 2021 (2,064) (113,764) (1,912,363) (1,229) (2,029,420)
Annual depreciation charge - (3,204) (46,553) - (49,757)
Impairment - (33,228) (460,302) - (493,530)
Transfers - - 17,132 1,229 18,361
Disposals/ write-off - - 48,316 - 48,316
Balance at 30 June 2022 (2,064) (150,196) (2,353,770) - (2,506,030)

Balance at 1 July 2022 (2,064) (150,196) (2,353,770) - (2,506,030)

Annual depreciation charge - (1,475) (24,357) - (25,832)
Impairment 2,064 17,215 87,272 - 106,551
Disposals/ write-off - 413 312 - 725
Balance at 30 June 2023 - (134,043) (2,290,543) - (2,424,586)

Carrying amount
At 30 June 2022 4,270 14,904 206,510 191,270 416,954
At 30 June 2023 6,334 30,555 368,454 228,596 633,939

SYNERGY 2023 ANNUAL REPORT 125

 5.1 Property, plant and equipment (continued)

Plant and Work in

Corporation Note Land Buildings equipment progress Total

$'000 $'000 $'000 $'000 $'000

At Cost
Balance at 1 July 2021 6,334 161,174 2,561,905 54,219 2,783,632
Additions - 1,453 13,091 165,830 180,374
Transfers 5.2 - 2,473 (2,678) (28,779) (28,984)
Disposals/ write-off - - (49,782) - (49,782)
Decommissioning
5.4 - - 37,744 - 37,744
adjustment
Balance at 30 June 2022 6,334 165,100 2,560,280 191,270 2,922,984

Balance at 1 July 2022 6,334 165,100 2,560,280 191,270 2,922,984

Additions - 6 38,912 81,236 120,154
Transfers 5.2 - - 42,355 (43,910) (1,555)
Disposals/ write-off - (508) (314) - (822)
Decommissioning
5.4 - - 17,433 - 17,433
adjustment
Balance at 30 June 2023 6,334 164,598 2,658,666 228,596 3,058,194

Depreciation and impairment

Balance at 1 July 2021 (2,064) (113,764) (1,912,363) (1,229) (2,029,420)
Annual depreciation charge - (3,204) (46,553) - (49,757)
Impairment - (33,228) (460,302) - (493,530)
Transfers - - 17,132 1,229 18,361
Disposals/ write-off - - 48,316 - 48,316
Balance at 30 June 2022 (2,064) (150,196) (2,353,770) - (2,506,030)

Balance at 1 July 2022 (2,064) (150,196) (2,353,770) - (2,506,030)

Annual depreciation charge - (1,475) (24,327) - (25,802)
Impairment 2,064 17,215 87,272 - 106,551
Disposals/ write-off - 408 312 - 720
Balance at 30 June 2023 - (134,048) (2,290,513) - (2,424,561)

Carrying amount
At 30 June 2022 4,270 14,904 206,510 191,270 416,954
At 30 June 2023 6,334 30,550 368,153 228,596 633,633

126 SYNERGY 2023 ANNUAL REPORT

5.1 Property, plant and equipment (continued)

Recognition and measurement

Property, plant and equipment

Property, plant and equipment (PPE) is stated at cost, net of accumulated depreciation and
impairment losses.

Costs include costs of purchase, delivery, and installation, and borrowing costs for long-term
construction projects. When significant parts of PPE are required to be replaced at intervals, the
Group recognises such parts as individual assets with specific useful lives and depreciates them
accordingly. Repair and maintenance costs are recognised in the statement of profit or loss as
incurred.

The present value of the expected cost for the decommissioning of an asset after its use is included
in the cost of the respective asset if the recognition criteria for a provision are met. Refer to
provisions (note 5.4) for further information about the decommissioning provision.

Depreciation

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets.
Leased assets and leasehold improvements are depreciated over the shorter of the lease term and
their useful lives. The estimated useful lives for the current and comparative periods are as follows:

• Buildings 10 – 40 years

• Plant and equipment 2 – 45 years

Land is not depreciated. Work in progress (WIP) is not amortised until the assets are completed and
ready for use.

The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at the end of each reporting period and adjusted prospectively, if appropriate.

Assets held for sale

Assets are held for sale when value is recovered through sale rather than continued use. They must
be immediately available for sale, and a sale must be highly probable. Assets held for sale are
measured at the lower of carrying value and fair value less cost to sell. Where fair value is less than
the asset’s carrying value an impairment loss is recognised in the statement of profit or loss.

There were no assets held for sale at 30 June 2023 (2022: $5.4 million).

Key estimates

Property, plant and equipment

In determining the useful lives of the Group’s generation assets, assumptions and estimates are
made in relation to the period over which an asset is expected to be available for use. Judgement
extends to include the intended design life and the operating and maintenance regime of the fleet,
and notional plant retirement dates.

When there are changes in the assumptions on plant retirement dates, the Group has determined
that either an extension or reduction in the useful life of certain generation assets is required to
align with the current management assumptions, as used in the decommissioning provision. There
was no change in the annual depreciation expense in 2023 (2022: no change).

SYNERGY 2023 ANNUAL REPORT 127

 5.1 Property, plant and equipment (continued)

Impairment

The Group assesses at each reporting date, whether there is an indication of impairment or,
where an impairment has previously been recognised, an indication of impairment reversal. If
any indication of impairment or impairment reversal exists, or where annual impairment testing is
required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the
higher of an asset or cash-generating unit’s (CGU) fair value less costs of disposal (FVLCD) and its
value in use (VIU). Recoverable amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups of
assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.

For assets previously impaired, if the recoverable amount exceeds the carrying amount, the
impairment is reversed, but only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been recognised if no impairment had occurred.

The principal changes since the last assessment at 30 June 2022 are:

• additional green power infrastructure capital expenditure (wind generation and battery
storage) due to supply chain constraints and commodity price increases;

• estimated regulated electricity price increases capped at consumer price index; and

• the discount rate as a consequence of increasing interest rates.

As a result of these impairment indicators, an impairment assessment was performed on the

following CGUs:

• Electricity CGU comprises electricity generation and retail and wholesale electricity sales,
through the Group’s portfolio of generating assets and power purchase agreements.

• Gas Trading CGU comprises trading of gas in the retail and wholesale market. As there are no
assets allocated to the Gas Trading CGU, an impairment assessment is not required.

Both VIU and FVLCD were assessed to determine the recoverable amount of the Electricity CGU:

• The VIU was calculated using a 20-year discounted cashflow model incorporating the
dispatch profile of each generating unit in the portfolio, and a terminal value. The pre-tax
discount rate used in the VIU calculation is 11.1%. The recoverable amount under the VIU model
was determined to be nil (2022: $401.8 million).

• As a result of the VIU model indicating no recoverable amount for the CGU, an external valuer
was engaged to inform the FVLCD assessment across the Group’s assets at 30 June 2023. The
recoverable amount under the FVLCD assessment was $633.9 million. The key assumptions
utilised in the valuation are detailed below.

As a result of management’s assessment, an impairment reversal of $77.1 million (2022: $569.5 million
loss) was recognised in impairment expenses and allocated to PPE, intangible assets (refer to note
5.2) and right of use assets (refer to note 5.3).

Fair value less costs of disposal assumptions

The fair value of the CGU assets is the price that would be received in an orderly transaction
between market participants at 30 June 2023. It has been assessed that the highest and best use of
the CGU assets are continuation of existing use.

128 SYNERGY 2023 ANNUAL REPORT

5.1 Property, plant and equipment (continued)

To arrive at fair value, market, income and cost valuation methodologies were considered:

• The market approach was not considered appropriate as the assets of the CGU are highly
specialised and rarely traded on the open market, resulting in limited comparable sales
evidence.

• The income approach was not considered appropriate as it is not possible to reliably attribute
an income stream to individual assets, since all assets forming part of the CGU contribute to
earnings as a portfolio of assets including working capital and intangible assets.

• A lack of reliable market-based evidence for the assets of the CGU resulted in the cost
approach being considered the most appropriate basis to determine fair value.

The cost approach involved the establishment of a replacement cost new of the individual assets
of the CGU, and then depreciating the cost over the asset’s normal useful life to reflect its effective
age, with due regard made to an estimated end-of-life residual value. It is based on the principle
that the price a buyer in the market would pay for the assets would not be more than the cost
to assemble or construct an equivalent asset. This is commonly referred to as the depreciated
replacement cost approach.

A cost of disposal for each of the group’s assets was incorporated based on estimated
decommissioning liabilities for each of the assets, and transaction costs likely to be incurred in any
sale of such an asset.

Sensitivity analysis

There are significant assumptions and estimates used in the preparation of the VIU calculation used
for assessing impairment. These include non-contestable electricity prices and the discount rate.

Significant assumption Sensitivity of the input to

the CGU

Electricity tariff prices Prices are capped at 2.5% in line with the 1.0% increase in FY 2028
approved price path in the 2023-24 State would result in an increase in
Budget for non-contestable residential and the recoverable amount of
small business tariffs. $172.6 million.

Discount rate The current market assessment of the risks 0.50% increase would
specific to the Electricity CGU. result in a decrease in the
recoverable amount of $134.4
million.

Capital expenditure An estimated $4.6 billion will be invested to 1.0% increase in construction
replace the capacity lost by the retirement of costs would result in a
coal power stations with wind and decrease in the recoverable
storage assets. amount of $42.4 million.

A sensitivity analysis has not been performed on the FVLCD assessment due to the nature of the
valuation approach, being depreciated replacement cost.

Impact of climate change related risk

The estimated recoverable amount used in the impairment analysis considers climate change
risk through the adjustment of cash inflows associated with the planned closure of all coal fired
generation assets. Any further change to the planned closure dates of coal and gas-fired generation
plants as a result of climate change or any change in climate policy may have a material impact on
the SWIS and may result in a material change to Synergy’s estimated cashflows.

SYNERGY 2023 ANNUAL REPORT 129

 5.2 Intangible assets

Computer Environment Sale

Group and Corporation Note software certificates agreements Total

$'000 $'000 $'000 $'000

At Cost
Balance at 1 July 2021 217,388 29,670 17,524 264,582
Additions 6,404 200,300 - 206,704
Transfers from WIP 5.1 5,422 - - 5,422
Disposals/ surrenders (26,374) (176,256) - (202,630)
Balance at 30 June 2022 202,840 53,714 17,524 274,078

Balance at 1 July 2022 202,840 53,714 17,524 274,078

Additions 2,490 230,440 - 232,930
Transfers from WIP 5.1 1,555 - - 1,555
Disposals/ surrenders (584) (245,429) - (246,013)
Balance at 30 June 2023 206,301 38,725 17,524 262,550

Amortisation and impairment

Balance at 1 July 2021 (180,801) - (14,254) (195,055)
Annual amortisation charge (12,254) - (3,016) (15,270)
Transfers (13) - - (13)
Disposals 26,229 - - 26,229
Impairment (24,852) - (174) (25,026)
Balance at 30 June 2022 (191,691) - (17,444) (209,135)

Balance at 1 July 2022 (191,691) - (17,444) (209,135)

Annual amortisation charge (4,155) - (80) (4,235)
Disposals 529 - - 529
Impairment 5.1 (10,683) - - (10,683)
Balance at 30 June 2023 (206,000) - (17,524) (223,524)

Carrying amount- current

Balance at 30 June 2022 - 53,714 80 53,794
Balance at 30 June 2023 - 38,725 - 38,725

Carrying amount- non-current

Balance at 30 June 2022 11,149 - - 11,149
Balance at 30 June 2023 301 - - 301

130 SYNERGY 2023 ANNUAL REPORT

5.2 Intangible assets (continued)

Recognition and measurement

Intangible assets acquired separately are measured, on initial recognition, at cost. The cost of
intangible assets acquired in a business combination is their fair value at the date of acquisition.
Environmental certificates purchased from external sources are recognised at the weighted
average cost of purchase.

Internally generated intangible assets include costs that meet the recognition criteria for
development costs only, as research costs are expensed as incurred. Development costs include the
cost of materials, direct labour and overhead costs that are directly attributable to preparing the
asset for its intended use.

Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and impairment losses.

Where the Group has entered into a cloud computing or software as a service arrangement, costs
relating to licensing, configuration and customisation are expensed as incurred unless increasing
the future economic benefits flowing from the Groups existing assets.

Amortisation and impairment

Intangible assets with finite lives are amortised on a straight-line basis over the period of expected
future benefits.

Intangible assets with indefinite useful lives are not amortised but are tested for impairment
annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite
life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.

The estimated useful lives for the current and comparative periods are as follows:

• Software 2 – 10 years

• Sales and purchase agreements 10 – 15 years

The Group’s environmental certificates are not amortised.

The Group assesses, at each reporting date, whether there is an indication of impairment or
impairment reversal for those assets which have previously been impaired. If any indication exists, or
where annual impairment testing is required, the Group estimates the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal
and its value in use. Recoverable amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups of
assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.

Key estimates

Software as a service arrangements

When determining if a cloud computing or software as a service arrangement contains an asset,

judgement is required around control of the software and the treatment of customisation and
configuration costs.

SYNERGY 2023 ANNUAL REPORT 131

 5.3 Right of use assets and lease liabilities

5.3.1 Right of use assets

Power
purchase
Group and Corporation Note Buildings agreements Other Total

$'000 $'000 $'000 $'000

At Cost
Balance at 1 July 2021 22,236 285,260 1,749 309,245
Additions 304 - 1,070 1,374
Balance at 30 June 2022 22,540 285,260 2,819 310,619

Balance at 1 July 2022 22,540 285,260 2,819 310,619

Additions 1,959 - 335 2,294
Leases re-measurement (2,211) - - (2,211)
Disposals/ write-off (136) - (372) (508)
Balance at 30 June 2023 22,152 285,260 2,782 310,194

Depreciation and impairment

Balance at 1 July 2021 (12,294) (210,696) (970) (223,960)
Annual depreciation charge (2,498) (9,779) (607) (12,884)
Impairment (5,348) (44,722) (858) (50,928)
Balance at 30 June 2022 (20,140) (265,197) (2,435) (287,772)

Balance at 1 July 2022 (20,140) (265,197) (2,435) (287,772)

Annual depreciation charge (458) (3,028) (700) (4,186)
Impairment 5.1 (1,690) (17,035) (19) (18,744)
Disposals/ write-off 136 - 372 508
Balance at 30 June 2023 (22,152) (285,260) (2,782) (310,194)

Carrying amount
At 30 June 2022 2,400 20,063 384 22,847
At 30 June 2023 - - - -

The Group has lease contracts for office buildings, power purchase agreements (PPA), motor
vehicles and office equipment. The Group also has leases of equipment with terms of less than
12 months or with low value, to which the Group applies the short-term and lease of low-value
recognition exemptions.

Recognition and measurement

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration.

The Group recognises right of use (ROU) assets at the commencement date of the lease. ROU
assets are measured at cost, net of accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of ROU assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received.

132 SYNERGY 2023 ANNUAL REPORT

5.3 Right of use assets and lease liabilities (continued)

ROU assets are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets, as follows:

• Buildings and other 2 – 10 years

• Power purchase agreements 15 – 25 years

5.3.2 Lease liabilities

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Current 24,577 21,344 24,577 21,344

Non-current 156,478 183,821 156,478 183,821
Total lease liability 181,055 205,165 181,055 205,165

In September 2022, the Group entered into a new office building lease agreement for an initial
period of ten years with an option to renew for two periods of five years from expiry of the initial
term. The Group also lodged a two year notice to terminate the current corporate office building
lease. As a result of termination, the lease liabilities and ROU assets have been revalued which
resulted in a revaluation profit of $2.0 million recognised in other operating income.

Recognition and measurement

Lease liabilities are initially measured at the present value of future fixed lease payments net
of cash lease incentives that are not paid at the balance date. To calculate the present value,
where the implicit interest rate is not readily determinable, payments are discounted using the
Group’s incremental borrowing rate. Subsequently, lease liabilities are remeasured when there is a
modification or change in lease terms.

Variable lease payments are recognised as an expense in the period in which the condition that
triggers the payment occurs. Total variable lease payments of $115.6 million (2022: $121.2 million) are
included in cost of sales.

Lease payments on short-term or low value leased assets are recognised as expense on a straight-
line basis over the lease term.

Key estimates

Lease term options

Judgement is applied when determining if it is reasonably certain whether or not to exercise an

option to renew or terminate a lease. Factors considered include economic incentives, operational
risk and strategic objectives. After the commencement date, the Group reassesses the lease term if
there is a significant event or change in circumstances that is within its control and affects its ability
to exercise or not to exercise the option to renew or to terminate.

Interest rates

Where the Group cannot readily determine the interest rate implicit in the lease it uses discount
rates sourced from the WATC as its incremental borrowing rate to measure lease liabilities.

SYNERGY 2023 ANNUAL REPORT 133

 5.4 Provisions

Renewable
Decom. Commodity energy Onerous Other
Note provision swaps certificates contracts provisions Total

Group and Corporation $'000 $'000 $'000 $'000 $'000 $'000

Balance at 1 July 2021 402,520 149,255 47,076 175,098 42,248 816,197

Recognised in profit or loss 5,624 (8,208) 194,546 6,600 37,820 236,382
Utilised (31,757) (20,254) (176,253) (29,340) (2,649) (260,253)
Change in assumptions in
5.1 37,744 - - - - 37,744
PPE
Reversed during the year - - (1,171) (500) (30,163) (31,834)
Unwinding of discount 727 964 - 1,142 - 2,833
Balance at 30 June 2022 414,858 121,757 64,198 153,000 47,256 801,069

Balance at 1 July 2022 414,858 121,757 64,198 153,000 47,256 801,069

Recognised in profit or loss 11,342 14,429 185,994 773,712 5,669 991,146
Utilised (21,592) (19,960) (185,980) (12,849) (6,296) (246,677)
Change in assumptions in
5.1 17,433 - - - - 17,433
PPE
Reversed during the year (3,461) - (8,145) - - (11,606)
Unwinding of discount 14,472 5,254 - 5,218 - 24,944
Balance at 30 June 2023 433,052 121,480 56,067 919,081 46,629 1,576,309

2022
Current 48,323 19,901 64,198 7,631 4,843 144,896
Non-current 366,535 101,856 - 145,369 42,413 656,173
414,858 121,757 64,198 153,000 47,256 801,069
2023
Current 48,313 31,349 56,067 73,074 1,212 210,015
Non-current 384,739 90,131 - 846,007 45,417 1,366,294
433,052 121,480 56,067 919,081 46,629 1,576,309

Recognition and measurement

Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.

Decommissioning provision

The Group has recognised a provision for decommissioning obligations associated with the
facilities owned by the Group. Recognition of a provision is consistent with the Group’s policies and
applicable legal requirements.

Decommissioning costs are provided at the present value of expected costs to settle the obligation
using estimated cash flows and are recognised as part of the cost of the particular asset. The
unwinding of the discount is recognised in the statement of profit or loss as a finance cost. Changes
in the estimated future costs, useful lives or in the discount rate applied are added to or deducted
from the cost of the asset or in the income statement for assets that have reached the end of life.

134 SYNERGY 2023 ANNUAL REPORT

5.4 Provisions (continued)
Commodity Swaps

Under long-term gas swap agreements entered into from 2012, the Group has been receiving gas
from various counterparties and is obliged to return gas in the future. The gas agreements are
entered into for the purpose of providing flexibility in managing the Group’s fuel requirements.

Provision for commodity swaps is recognised at the present value of expected costs to settle the
obligation using estimated cash flows. The unwinding of the discount is recognised in the statement
of profit or loss as a finance cost. Changes in the estimated future costs are recognised as an
expense in the statement of profit or loss.

Renewable energy certificates

The Renewable Energy (Electricity) Act 2000 requires electricity wholesale purchasers to source
specified amounts of electricity from renewable energy sources and imposes an annual liability on
the Group.

The provision for renewable energy certificates (RECs) is measured at the estimated cost of settling
the obligation, being the weighted average cost of RECs held at the date of surrender, less any
internally generated RECs on hand. At period end any shortfall in certificates is measured at market
value. The liability is expensed in the statement of profit or loss as cost of sales.

Onerous contracts

The Group has supply agreements and sales contracts where the unavoidable costs of meeting the
obligations under the agreements exceed the economic benefits the Group is expected to receive
from fulfilling the contract. A provision for onerous contracts has been recognised as the net present
value of unavoidable net costs i.e. the difference between expected revenue and the costs to fulfil
the agreements. The costs that relate directly to a contract to provide goods or services include
both incremental costs and an allocation of costs directly related to contract activities.

Assets associated with the fulfilment of these contracts have been assessed for indicators of
impairment, and written down to their recoverable amount, before a separate provision for onerous
contracts is recognised.

As a result of management’s assessment, an additional provision for onerous contracts of $773.7

million was recognised in 2023 (2022: $6.1 million). This additional provision for onerous contracts
contributed to a net deficit and greater net asset deficiency for the year ended 30 June 2023 (refer
to note 6.1).

SYNERGY 2023 ANNUAL REPORT 135

 5.4 Provisions (continued)

Key estimates

Decommissioning provision

In determining the amount of the provision, assumptions and estimates are made in relation to
discount rates, the expected cost to decommission the site, and the expected timing of those
costs. Judgement extends to include the anticipated removal date, impact of future environmental
legislation, extent of reclamation activities required, engineering methodology for estimating costs,
future removal technologies in determining removal cost, and asset specific discount rates to
determine the present value of these cash flows.

During 2022 the Group engaged an independent expert to estimate the future decommissioning
costs. The mid-point of the estimate range, which represents the probability weighted average
of the possible scenarios, estimated by the expert, was adopted as the basis for calculating the
provision. Because of the long-term nature of the liability, there is significant estimation risk around
the estimated decommissioning costs that will be incurred. The Group has assumed the sites will be
restored using the technology and materials that are currently available.

Commodity Swaps

The commodity swap liability represents the value of the obligation to return gas. In determining the
amount of the provision, assumptions and estimates are made in relation to discount rates, future
commodity prices and the expected timing of the gas returns.

Onerous contracts

The onerous contract assessment requires the Group to make estimates regarding the unavoidable
costs and the expected economic benefits from the contract. These estimates require significant
judgement and are subject to risk and uncertainty.

In determining the amount of the provision, assumptions and estimates are made in relation
to discount rates, the expected revenue and costs including excess quantity not used, and the
expected timing of these cash flows. The market yields on corporate bonds as published by the
Group of 100 for fixed long-term borrowings of similar durations has been used to discount the
cashflows.

Electricity dispatch modelling is utilised to model probable demand and supply of the Group and
other market participants over the life of the contracts. This modelling projects customer electricity
demand, generation plant mix, fuel consumption levels and electricity purchase requirements,
which have a material impact on the projected cost to supply electricity and the level of excess fuel
or commodity purchases beyond requirements.

The onerous contract provision of the group estimates the cost of key inputs in future years, such
as fuel and trading commodities, based on market reports prepared by specialists and tendering or
commercial negotiation activities in recent years. A sensitivity analysis on these inputs is provided.

Significant assumption Sensitivity of the input

Projected cost to supply electricity Key costs to supply electricity include 10% increase in supply costs
and purchase commodities direct fuel costs, preventative and would result in an increase in
corrective maintenance and market the provision of $237.7 million
electricity purchases
Discount rate The current market assessment 1% in discount rates would
of the risks specific to the onerous result in a decrease in the
contract liability provision of $47.1 million

136 SYNERGY 2023 ANNUAL REPORT

5.5 Derivative financial instruments

Group Corporation

2023 2022 2023 2022

$’000 $’000 $’000 $’000

Forward exchange contracts- cash flow hedge 740 401 740 401
Total current financial assets through OCI 740 401 740 401

Electricity derivatives - embedded current 1,463 5,302 1,463 5,302

Electricity derivatives - embedded non-current 5,209 22,965 5,209 22,965
Total financial assets through profit or loss 6,672 28,267 6,672 28,267

Total financial assets at fair value 7,412 28,668 7,412 28,668

Forward exchange contracts - cash flow hedge 216 993 216 993
Total financial liabilities through OCI 216 993 216 993

The Group uses derivative financial instruments, such as forward currency contracts and forward
commodity contracts, to hedge its foreign currency risks and commodity price risks.

Forward exchange contracts

When the Group has expected foreign currency denominated purchases, foreign exchange forward
contracts are entered into and designated as hedging instruments in cash flow hedges. These
expected transactions are highly probable, and they comprise 100% of the Group’s total expected
purchases in foreign currencies. Where the period of the underlying transaction is less than 12
months, foreign exchange forward contracts are not generally designated as cash flow hedges.

The foreign exchange forward contract balances vary with the level of expected foreign currency
purchases and changes in foreign exchange forward rates. The terms of the foreign currency
forward contracts match the terms of the expected highly probable forecast transactions. As a
result, no hedge ineffectiveness arises requiring recognition through the statement of profit or loss.

Electricity derivatives

Electricity derivatives are the contract-for-difference component of some electricity trading

contracts the Group has entered into. These electricity derivatives have been separated and are
carried at fair value through profit or loss. These financial instruments reflect the change in fair
value of electricity derivatives that are not designated in hedge relationships but are nevertheless
intended to reduce the level of commodity price risk.

SYNERGY 2023 ANNUAL REPORT 137

 5.5 Derivative financial instruments (continued)

Recognition and measurement

Derivative financial instruments are classified, at initial recognition, as either financial assets or
liabilities at fair value through profit or loss, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate. Financial assets and liabilities at fair value through profit or
loss are measured at fair value with net changes in fair value presented as finance costs or finance
income in the statement of profit or loss.

Hedging

Derivatives that are designated within qualifying hedge relationships are initially recognised at fair
value on the date the contract is entered into.

For relationships designated as fair value hedges, subsequent fair value movements are recognised
in the statement of profit or loss. For relationships designated as cash flow hedges, subsequent fair
value movements for the effective portion of the hedge are recognised in other comprehensive
income and accumulated in reserves; fair value movements for the ineffective portion are
recognised immediately in the statement of profit or loss.

Fair value

Fair value is the price that would be received for the sale of an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. When the fair
values cannot be measured using quoted prices in active markets, it is measured using valuation
techniques considered appropriate in the circumstances and for which sufficient data is available,
maximising the use of relevant observable inputs.

Fair value of derivative financial instruments

The following were used to estimate the fair values of the Group’s derivative financial instruments:

• fair values of foreign exchange forward contracts are determined using the deal rates and the
forward curve rates to maturity, discounted using the base currencies discount curve. Curves
used are those published by financial institutions at the end of the reporting period; and

• fair value of electricity derivatives is determined using the discounted cash flow method.
Internally projected forward electricity price is used to calculate the forward price curve.
These are discounted using the market yields on corporate bonds as published by the Group
of 100 for fixed long-term borrowings of similar durations.

All assets and liabilities for which fair value is measured are categorised within the fair value
hierarchy, based on the lowest level input that is significant to the fair value measurement as a
whole.

138 SYNERGY 2023 ANNUAL REPORT

5.5 Derivative financial instruments (continued)

The following table provides the hierarchy of the Group’s financial instruments measured at fair
value:

Total Level 1 Level 2 Level 3

$’000 $’000 $’000 $’000

2022
Electricity derivatives - embedded 28,267 - - 28,267
Forward exchange contracts - cash flow hedge (592) - (592) -
2023
Electricity derivatives - embedded 6,672 - - 6,672
Forward exchange contracts - cash flow hedge 524 - 524 -

For recurring assets and liabilities, there were no transfers between Level 1 and Level 2 during the
reporting period.

2023 2022
Reconciliation of Level 3 financial instruments $'000 $'000

Opening balance 28,267 49,672

Unwinding (5,302) (7,372)
Revaluation (16,293) (14,033)
Closing balance 6,672 28,267

Key estimates

Electricity derivatives

Where discounted cash flow techniques are used, estimated future cash flows are based on
management’s best estimates of the forward electricity price and the discount rate. The inputs
to these models are taken from observable markets where possible, but where this is not feasible
a degree of judgement is required by management in establishing fair values. Changes in
assumptions could affect the reported fair value of financial instruments. The following are the
significant unobservable inputs in the electricity derivatives:

• internally projected forward electricity price – a 10% increase/ (decrease) would result in a
decrease/ (increase) in fair value by $4.5 million.

• discount rate – a 1% increase/ (decrease) would result in an insignificant change in fair value.

• internally projected sales volumes – a 10% increase/ (decrease) would result in a decrease/
(increase) in fair value by $0.7 million.

SYNERGY 2023 ANNUAL REPORT 139

 5.6 Interest bearing loans and borrowings

Group Corporation

2023 2022 2023 2022

Interest rate Maturity $’000 $’000 $’000 $’000

Unsecured borrowings 0.47% - 4.23% Jan-30 161,130 161,130 161,130 161,130

Secured borrowings 3.13% Jun-30 121 123 121 123
Total interest-bearing loans and borrowings 161,251 161,253 161,251 161,253

Unsecured borrowings

This loan has been drawn down under a Master Lending Agreement with WATC. The fair value of the
unsecured borrowings at 30 June 2023 is $150.6 million (2022: $150.2 million). There is no fixed term
on this facility. The loans drawn under the facility are repayable at dates designated at drawdown
and are classified as short-term or long-term based on each loan’s maturity as at the reporting
date.

At 30 June 2023, the Group had an approved borrowing limit of $211.0 million (2022: $280.0 million),
of which $161.1 million has been utilised (2022: $161.1 million). In addition, the Group also had $125.0
million of undrawn committed working capital facility from WATC (2022: $125.0 million).

Based on the best estimate at the balance date taking into account the cash and bank balances
and the undrawn balance available from the above facilities, the Group is in a position to pay its
debts as and when they fall due for payment.

Classification

As at 30 June 2023, the non-current unsecured borrowings of $161.1 million included an amount
of $20.1 million that will become due and payable during the 2024 reporting year. It is the Group’s
expectation and discretion that this amount will be refinanced under the master lending agreement
with the WATC rather than repaid, and therefore has been classified as non-current. This is
supported by:

• a master lending agreement with the WATC that allows the Group to refinance all or any part
of maturing debt at regular intervals; and

• the approval of the Group’s forecast borrowing requirements for the next four years, including
no repayment of amounts classified as non-current above, in the 2023-24 Western Australian
State Budget handed down in May 2023.

Recognition and measurement

Loans and borrowings are initially recognised at fair value, net of directly attributable transaction
costs, and are subsequently measured at amortised cost.

140 SYNERGY 2023 ANNUAL REPORT

Section 6 - Other items

6.1 Contributed equity, accumulated losses and reserves

Contributed equity

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Contributed equity 1,886,445 1,448,445 1,886,445 1,448,445

Contributed equity comprises contributions by the owner, the State Government of

Western Australia.

The initial contribution by owner was made on 1 April 2006 and comprised assets and liabilities
transferred from Western Power Corporation. On 1 January 2014, an additional contribution
was received in the form of a transfer of the assets and liabilities from the former Electricity
Retail Corporation. Contributions of assets and liabilities, under a restructure of administrative
arrangements, are recognised at their carrying values through equity as capital contribution by
owner.

During the year, the Group received $438.0 million (2022: $155.7 million) in additional equity
contributions from the State Government of Western Australia to fund the development of
renewable generation and energy storage infrastructure to replace its coal-fired generation assets
by 2030.

Net deficit

As at 30 June 2023, the Group incurred a loss of $732.7 million (2022: $429.0 million), net operating
cash outflows of $97.8 million (2022: $124.8 million net inflows) and its financial position indicates
current net assets of $199.3 million (2022: $208.4 million) and a net asset deficiency of $604.6
million (2022: $311.7 million). The net asset deficiency is primarily driven by impairment (note 5.1)
and onerous contracts provision (note 5.4) movements. Although these movements are reflected in
the consolidated profit and loss for the year ended 30 June 2023, there is no impact to the Group’s
short-term liquidity position or its ability to pay its debts as and when they fall due for payment.
Net assets are expected to return positive in 2024 supported by additional government equity
contributions of $1,586 million from the State Government of Western Australia for wind generation
and battery storage projects.

Accumulated losses and reserves

The reserve includes the effective portion of the cumulative net change in fair value of cash flow
hedging instruments related to transactions that have not yet occurred, and the Group’s share of
other comprehensive income that will subsequently be reversed through the profit or loss statement
from its investment in joint ventures.

There were no dividends paid during the 2023 financial year (2022: nil).

SYNERGY 2023 ANNUAL REPORT 141

 6.1 Contributed equity, accumulated losses and reserves (continued)

The disaggregation of changes of other comprehensive income by each type of reserve is

shown below:

Accumulated losses Reserves Total

Group $’000 $’000 $’000
Changes in fair value of cash flow hedges, net of tax - 12,135 12,135
Re-measurement on defined benefit plans, net of tax 1,475 - 1,475
As at 30 June 2022 1,475 12,135 13,610
Changes in fair value of cash flow hedges, net of tax - 1,632 1,632
Re-measurement on defined benefit plans, net of tax 146 - 146
As at 30 June 2023 146 1,632 1,778

Corporation
Changes in fair value of cash flow hedges, net of tax - (504) (504)
Re-measurement on defined benefit plans, net of tax 1,475 - 1,475
As at 30 June 2022 1,475 (504) 971
Changes in fair value of cash flow hedges, net of tax - 1,117 1,117
Re-measurement on defined benefit plans, net of tax 146 - 146
As at 30 June 2023 146 1,117 1,263

6.2 Commitments and contingencies

Capital and other commitments

As 30 June 2023 the Group has commitments relating to the future purchase of renewable energy
certificates, energy purchase agreements, information technology and contact centre support
services of $10.0 billion (2022: $8.4 billion), and other committed capital expenditure of $951.0 million
(2022: $93.3 million).

In determining the value of commitments, assumptions and estimates are made in relation to the
future output of generating assets and renewable energy certificate prices.

Site restoration contingency

The Group provides for the restoration of its power station sites including any environmental
rehabilitation as required by various environmental regulations (and as disclosed in note 5.4). Based
on management’s best estimates and assumptions, the Group has made adequate provision to
cover these anticipated restoration costs.

However, many of these costs will be incurred at some time in the future and as such, the provisions
will be subject to changes due to significant estimation risk surrounding such estimates and
assumptions.

In addition, there may be residual environmental obligations on sites which have been declared
rehabilitated, and to the extent that these may arise, represent contingent liabilities to the Group.
Management does not have any means of quantifying this residual exposure.

142 SYNERGY 2023 ANNUAL REPORT

6.2 Commitments and contingencies (continued)

Asbestos management contingency

The Group operates a portfolio of thermal power stations of varying ages. Many of these power
stations used asbestos for its insulation and fire-resistant qualities prior to the market becoming
aware of the dangers of asbestos. The Group has a current asbestos management process in place
and addresses these risks on an ongoing basis.

However, diseases which emanate from asbestos, such as asbestosis may take many years to
develop. As such, the Group may have a liability to those workers and other contractors who came
in contact with asbestos at one of its power stations in the past.

The Group has a contingent liability for undiagnosed illnesses which may arise from exposure to
asbestos at one of its sites. The quantum of this contingent liability is extremely uncertain and
cannot be estimated with any accuracy.

Contractual dispute

The Group is currently in a contractual dispute with a supplier. Synergy filed and served an
amended Statement of Claim in the Supreme Court of Western Australia on the supplier in
June 2023.

Management expect that the resolution of the dispute will likely be favourable for the Group.
However, as the outcome is not virtually certain, the value of the contingent asset, estimated at $15.1
million at 30 June 2023, is disclosed but not recognised.

6.3 Employee benefits

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Annual leave 19,136 20,036 19,085 19,979

Long service leave 17,801 18,315 17,801 18,315
Total current liability 36,937 38,351 36,886 38,294

Long service leave 4,898 2,845 4,898 2,845

Defined benefit plan obligation 24,003 24,704 24,003 24,704
Total non-current liability 28,901 27,549 28,901 27,549

Annual and long service leave benefits are reported as current because Synergy does not have an
unconditional right to defer settlement.

SYNERGY 2023 ANNUAL REPORT 143

 6.3 Employee benefits (continued)

The amount of annual and long service leave expected to be taken or paid within and after the next
12 months are presented below:

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000
Annual leave:
Annual leave expected to be settled < 12 months 11,581 11,830 11,530 11,773
Annual leave expected to be settled > 12 months 7,555 8,206 7,555 8,206
19,136 20,036 19,085 19,979
Long service leave:
Long service leave expected to be settled < 12 months 2,102 1,084 2,102 1,084
Long service leave expected to be settled > 12 months 15,699 17,231 15,699 17,231
17,801 18,315 17,801 18,315

Recognition and measurement

Provision is made for benefits accumulated as a result of employees rendering services up to

the end of the reporting period. These benefits include wages, salaries, annual leave and long
service leave.

Liabilities expected to be wholly settled within one year after the end of the period are classified
as short-term and measured at the amount due to be paid. Liabilities that are not expected to be
wholly settled within one year after the end of the period are classified as long-term and measured
at the present value of the estimated future cash outflow, using the projected unit credit method.

The Group’s employees are entitled to benefits upon retirement, disability or death from any
number of superannuation plans, which may include a defined contribution pension plan, a defined
benefit pension plan, or both. The cost of providing benefits under the defined contribution plan is
recognised in the statement of profit or loss as incurred. The cost of providing benefits under the
defined benefit plan is determined using the projected unit credit method.

With respect to the defined benefit plan, re-measurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are recognised in other comprehensive income.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. It
is recognised, along with changes in the present value of defined benefit obligations resulting from
plan amendments or curtailments, in the statement of profit or loss as past service costs.

Key estimates

Long service leave

Management requires judgement to determine key assumptions used in the calculation including
future increases in salaries and wages, future on-cost rates and future settlement dates of
employees’ departures.

144 SYNERGY 2023 ANNUAL REPORT

6.3 Employee benefits (continued)

Defined benefit plan obligations

The cost of the defined benefit pension plan and the present value of the pension obligation are
determined using actuarial valuations. An actuarial valuation involves making various assumptions
including the determination of the discount rate, future salary increases, mortality rates and future
pension increases. Due to the complexities involved in the valuation and its long-term nature, a
defined benefit obligation is highly sensitive to changes in these assumptions.

An actuarial review was conducted for the year ended 30 June 2023 using the membership data as
at 30 April 2023, as it is not expected that the membership data will be materially different as at 30
June 2023.

Defined benefit plan obligation

The Corporation participates in two defined benefit plans consisting of the Pension Scheme and the
prior service component of the Gold State Scheme, in which members receive pension benefits on
retirement, death or invalidity, or a lump sum benefit on resignation. The schemes, which are now
closed to new members, are wholly unfunded. The schemes have no assets. The schemes operate
under the State Superannuation Act 2000 (Western Australia) and the State Superannuation
Regulations 2001 (Western Australia).

Although not formally subject to the Superannuation Industry (Supervision) (SIS) legislation, the
Western Australian government has undertaken to operate the schemes in accordance with the SIS
legislation. As an exempt public sector superannuation scheme (as defined in the SIS legislation),
the schemes are not subject to any minimum funding requirements. As a constitutionally protected
scheme, the schemes are not required to pay tax.

The Government Employees Superannuation Board (GESB) is the schemes’ trustee and is responsible
for the governance of the schemes.

A reconciliation of the movement in the present value of the obligation recognised in the statement
of financial position is shown below.

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000

Balance at 1 July 24,704 27,067 24,704 27,067

Interest cost 790 391 790 391
Benefits paid (1,345) (1,279) (1,345) (1,279)
Actuarial changes in assumptions (146) (1,475) (146) (1,475)
Balance at 30 June 24,003 24,704 24,003 24,704

The significant actuarial assumptions used at valuation date include the discount rate based on
the yield on the federal government bonds maturing in 2030 of 3.55% (2022: 3.35%), expected future
salary increase of 3.50% (2022: 3.50%) and expected pension increase of 2.50% (2022: 2.50%).

Sensitivity analysis was performed on the defined benefit obligation using a 0.5% increase/decrease
in the assumptions above, whilst retaining all other obligations, and the variances had a maximum
impact on the statement of comprehensive income of $1.3 million (2022: $1.4 million).

SYNERGY 2023 ANNUAL REPORT 145

 6.4 Key management personnel compensation

2023 2022

$'000 $'000
Short-term employee benefits 4,175 4,375
Post-employment benefits 299 314
Termination benefits 632 -
Total compensation paid to key management personnel 5,106 4,689

The amounts disclosed in the table are the amounts paid during the reporting period related to key
management personnel of the Group.

6.5 Group structure

6.5.1 Information relating to subsidiaries

The financial statements of the Group include:

Country of
Principal activity incorporation % Equity interest

2023 2022

South West Solar Development Renewable energy Australia 100% 100%

Holdings Pty Ltd development

The movement in the net carrying value of the subsidiaries is shown below:

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000
Net carrying value
Balance at 1 July - - 1,462 1,462
Balance 30 June - - 1,462 1,462

Recognition and measurement

Subsidiaries are all the entities over which the Group has the power over the investee such that the
Group is able to direct the relevant activities, has exposure, or rights, to variable returns from its
involvement with the investee and has the ability to use its power over the investee to affect the
amount of the investor’s returns.

146 SYNERGY 2023 ANNUAL REPORT

6.5 Group structure (continued)

6.5.2 Interest in associates and joint arrangements

The financial statements of the Group include:

Report Country of
Principal activity % Equity
date incorporation

2023 2022

Associates
Premier Coal Limited (i) Coal mining 31 Dec Australia - -

Joint arrangements
Bright Energy Investments Renewable energy construc-
30 June NA 19.9% 19.9%
Trust (BEI) tion and operation

i. Under the Amended Coal Supply Agreement and the Convertible Loan Agreement (Loan) with
Premier Coal Limited (PCL), the Loan automatically converts into a 25% equity stake in PCL at
the end of the term of the Loan on 30 June 2030, unless it is repaid by PCL, converted into equity
or forgiven by Synergy at an earlier time.

There were no reported contingent liabilities as at 30 June 2023 (2022: nil), in relation to
these investments.

Group Corporation

2023 2022 2023 2022

$'000 $'000 $'000 $'000
Investment in joint ventures 25,993 36,287 41,043 41,043
Balance at 30 June 25,993 36,287 41,043 41,043

SYNERGY 2023 ANNUAL REPORT 147

 6.5 Group structure (continued)

The movement in the net carrying value of investments is shown below:

Group BEI Collie Total

$'000 $'000 $'000

Balance at 1 July 2021 28,571 226 28,797

Distributions (5,342) (226) (5,568)
Share of profit for the year 419 - 419
Share of other comprehensive income 12,639 - 12,639
Balance at 30 June 2022 36,287 - 36,287

Balance at 1 July 2022 36,287 - 36,287

Distributions (11,092) - (11,092)
Share of profit for the year 283 - 283
Share of other comprehensive income 515 - 515
Balance at 30 June 2023 25,993 - 25,993

Investments in associates and joint arrangements including summarised financial information:

Group

2023 2022
$'000 $'000

Cash and cash equivalents 10,262 17,711

Other current assets 19,009 8,467
Non-current assets 640,087 663,526
Current financial liabilities 21,394 77,824
Other current liabilities 1,299 1,125
Non-current financial liabilities 462,445 376,203
Other non-current liabilities 52,776 51,380
Net assets of joint venture 131,444 183,172
Carrying value of interest in JV 25,993 36,287

Revenue 55,622 56,533

Depreciation and amortisation 25,512 25,411
Income tax expense - 3
Net profit after tax 1,424 2,104
Share of profit 283 419
Other comprehensive income 2,587 63,514
Share of other comprehensive income 515 12,639

148 SYNERGY 2023 ANNUAL REPORT

6.5 Group structure (continued)

Recognition and measurement

Joint arrangements

Joint arrangements are arrangements in which two or more parties have joint control. Joint control
is the contractual agreed sharing of control of the arrangement which exists only when decisions
about the relevant activities require unanimous consent of the parties sharing control. Joint
arrangements are classified as either a joint operation or joint venture, based on the rights and
obligations arising from the contractual obligations between the parties to the arrangement.

To the extent the joint arrangement provides the Group with rights to the individual assets and
obligations arising from the joint arrangement, the arrangement is classified as a joint operation,
and as such the Group recognises its share of the operations assets, liabilities, revenue and
expenses, including those incurred jointly. To the extent the joint arrangement provides the Group
with rights to the net assets of the arrangement, the investment is classified as a joint venture and
accounted for using the equity method.

Joint arrangements acquired which are deemed to be carrying on a business are treated as
business combinations and are accounted for under AASB 3 Business Combinations. Joint
arrangements which are not deemed to be carrying on a business are treated as asset acquisitions.

Associates

Associates are those entities in which the Group has significant influence, but not control or joint
control, over the financial and operating policies. Interests in associates are accounted for using the
equity method.

6.6 Related parties

The Group is a wholly owned public sector entity, controlled by the State Government of Western
Australia, and so related parties of the Group include:

• all Ministers and key management personnel (KMP) and their close family members, and their
controlled or jointly controlled entities;

• other departments and statutory authorities, including their related bodies, that are included
in the whole of government consolidated financial statements;

• associates and joint ventures of an entity that are included in the whole of Government
consolidated financial statements; and

• the Government Employees Superannuation Board (GESB). GESB is responsible for the
governance of the Group’s pension schemes, further details of which are disclosed in note 6.3.

SYNERGY 2023 ANNUAL REPORT 149

 6.6 Related parties (continued)

Transactions with related parties

Transactions with State Government related entities include the retail sale of electricity in the
ordinary course of business on normal commercial terms. Other significant transactions include:

• Department of Treasury:

» $419,657,000 for the WA Household Electricity Credit 2022, allocated to customer accounts
in July 2022 (2022: nil);

» $240,707,000 of other revenue relating to payment in lieu of subsidies (2022: $216,362,000);

$10,832,000 of which was repayable at 30 June 2023 (2022: $16,330,000); and

» $125,345,000 of reimbursement of the cost of CSOs included in fuel, electricity and other
purchases, (2022: $153,931,000); $1,964,000 of which was repayable at 30 June 2023 (2022:
$28,757,000 receivable).

• WATC

» borrowings under a Master Lending Agreement (note 5.6); the Group has drawn down
$161,130,000 (2022: $161,130,000) of borrowings at 30 June 2023, and repaid nil during the
year (2022: $57,110,000); and

» incurred interest charges of $4,189,000 during the year (2022: $3,208,000); $693,000 of
interest was accrued at 30 June 2023 (2022: $407,000);

• network access and metering services from the Electricity Networks Corporation; and

• energy sales to the Regional Power Corporation and the Water Corporation.

The Group is not aware of any material transactions with the KMP or their close family members
or controlled entities, or the Premier of Western Australia or any of the Cabinet Ministers during the
year ended 30 June 2023. Remuneration and benefits received by directors and KMP are disclosed
in the directors’ report and in note 6.4.

Transactions with joint ventures and operations and associates include sale, purchase and service
transactions in the ordinary course of business on normal commercial terms.

Amounts Amounts Commitments

Sales Purchases
owed by owed to outstanding

$’000 $’000 $’000 $’000 $’000

30 June 2022
Associate - 139,561 - 5,137 -
Joint Ventures and Operations 53,821 41,599 357 3,521 562,373
Government Related Entities
Water Corporation 8,589 46 330 - -
Regional Power Corporation 25,365 23 720 - -
Electricity Networks Corporation 5,453 1,314,069 2,986 303,692 4,889
30 June 2023
Associate - 159,251 - 1,500 -
Joint Ventures and Operations 13,900 60,249 12,177 11,007 856,683
Government Related Entities
Water Corporation 59,182 49 - - -
Regional Power Corporation 30,505 - - - -
Electricity Networks Corporation 4,875 1,237,256 2,920 204,296 2,421

150 SYNERGY 2023 ANNUAL REPORT

6.7 Accounting standards and interpretations issued but not
yet effective

At the date of this financial report the following standards and interpretations, which may
materially impact the entity in the period of initial application, have been issued but are not
yet effective:

Reference and
Summary
application date

AASB 2022-5 Lease liability in a AASB 2022-5 amends AASB 16 Leases to add subsequent measure-
sale and leaseback ment requirements for sale and leaseback transactions that satisfy the
requirements in AASB 15 Revenue from Contracts with Customers to be
Effective 1 January 2024 accounted for as a sale.

Application date 1 July 2024 AASB 16 already requires a seller-lessee to recognise only the amount of
any gain or loss that relates to the rights transferred to the buyer-lessor.
The amendments made by this Standard ensure that a similar approach
is applied by also requiring a seller-lessee to subsequently measure lease
liabilities arising from a leaseback in a way that does not recognise any
amount of the gain or loss related to the right of use it retains.

The impact of the amendments is not expected to have a significant

impact on the Group’s consolidated financial statements.

AASB 2022-6 Non-current liabilities AASB 2022-6 amends AASB 101 Presentation of Financial Statements to
with covenants improve the information an entity provides in its financial statements
about long‑term liabilities with covenants where the entity’s right to
Effective 1 January 2024 defer settlement of those liabilities for at least twelve months after the
reporting period is subject to the entity complying with conditions speci-
Application date 1 July 2024 fied in the loan arrangement.

The impact of the amendments is not expected to have a significant

impact on the Group’s consolidated financial statements.

AASB 2022-10 Fair Value Measure- AASB 2022-10 amends AASB 13 Fair Value Measurement for fair value
ment of Non-Financial Assets of Not- measurements of non-financial assets of not-for-profit public sector
for-Profit Public Sector Entities entities not held primarily for their ability to generate net cash inflows.

Effective 1 January 2024 The impact of the amendments is not expected to have a significant
impact on the Group’s consolidated financial statements.
Application date 1 July 2024

6.8 Events after the reporting date

There were no significant events after reporting date.

SYNERGY 2023 ANNUAL REPORT 151

 Directors’ declaration
In the opinion of the Directors of the Electricity Generation and Retail Corporation (the Corporation):

(a). the financial statements and notes of the Corporation are prepared in accordance with
the Government Trading Enterprises Act 2023, including section 176 and the Government
Trading Enterprises Regulations 2023 and:

i. gives a true and fair view of the financial position of the Group and the Corporation as at 30
June 2023 and of its performance for the year ended on that date; and

ii. complies with Australian Accounting Standards (including the Australian Accounting
Interpretations), and the Corporations Regulations 2001;

(b). there are reasonable grounds to believe that the Corporation and Group will be able to pay
its debts as and when they become due and payable;

(c). financial records of the Corporation for the financial year have been properly maintained.

The directors have been given the declaration by the Chief Executive Officer and Chief Financial
Officer for the reporting year ended 30 June 2023.

Signed in accordance with a resolution of the Directors:

Michelle Shepherd
Chair

Yasmin Broughton
Deputy Chair

Date: 29 August 2023

Perth

152 SYNERGY 2023 ANNUAL REPORT

Independent auditor’s report

Auditor General
INDEPENDENT AUDITOR’S REPORT
2023
Electricity Generation and Retail Corporation (trading as Synergy)

To the Parliament of Western Australia

Opinion
I have audited the financial report of Electricity Generation and Retail Corporation (trading as
Synergy) (the Corporation) and its subsidiaries (Group), which comprises:
• the Statements of Financial Position as at 30 June 2023, and the Statements of Profit or
Loss, Statements of Comprehensive Income, Statements of Changes in Equity and
Statements of Cash Flows for the year then ended
• Notes comprising a summary of significant accounting policies
• the directors’ declaration.

In my opinion, the financial report of the Corporation and the Group is prepared in accordance
with the Government Trading Enterprises Act 2023, including section 176 and the Government
Trading Enterprises Regulations 2023, and:
• gives a true and fair view of the financial position at 30 June 2023 and of its performance for
the year then ended
• in accordance with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for opinion

I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of my report.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis
for my opinion.

Emphasis of Matter
I draw attention to the matter below. My opinion is not modified in respect of this matter.

Onerous contracts
I draw attention to notes 3.3 Expenses and 5.4 Provisions of the financial report which
discloses the Group’s recognition of an additional provision for onerous contracts of
$773.7 million during the year which consists of $498.2 million included in fuel, electricity and
other purchases and $275.5 million included in commodity charges.

Page 1 of 3

7th Floor Albert Facey House 469 Wellington Street Perth MAIL TO: Perth BC PO Box 8489 Perth WA 6849 TEL: 08 6557 7500

SYNERGY 2023 ANNUAL REPORT 153

 Independent auditor’s report (continued)

Other information
The directors are responsible for the other information. The other information is the information in
the Group’s annual report for the year ended 30 June 2023, but not the financial report and my
auditor’s report.

My opinion on the financial report does not cover the other information and accordingly, I do not
express any form of assurance conclusion thereon.

In connection with my audit of the financial report, my responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or my knowledge obtained in the audit or otherwise appears to be
materially misstated.

If, based on the work I have performed, I conclude that there is a material misstatement of this
other information, I am required to report that fact. I did not receive the other information prior to
the date of this auditor’s report. When I do receive it, I will read it and if I conclude that there is a
material misstatement in this information, I am required to communicate the matter to those
charged with governance and request them to correct the misstated information. If the misstated
information is not corrected, I may need to retract this auditor’s report and re-issue an amended
report.

Responsibilities of the directors for the financial report

The directors of the Corporation are responsible for:
• keeping proper records
• preparation of the financial report in accordance with the Government Trading Enterprises
Act 2023, including section 176 and the Government Trading Enterprises Regulations 2023
that gives a true and fair view in accordance with Australian Accounting Standards and
Corporations Regulations 2001
• such internal control as the directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for:
• assessing the Corporation’s ability to continue as a going concern
• disclosing, as applicable, matters related to going concern
• using the going concern basis of accounting unless the Western Australian Government has
made policy or funding decisions affecting the continued existence of the Corporation.

Auditor’s responsibilities for the audit of the financial report

As required by the Auditor General Act 2006, my responsibility is to express an opinion on the
financial report. The objectives of my audit are to obtain reasonable assurance about whether the
financial report as a whole is free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing
Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of the financial report. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations or the override of internal control.
A further description of my responsibilities for the audit of the financial report is located on the
Auditing and Assurance Standards Board website. This description forms part of my auditor’s
report and can be found at https://www.auasb.gov.au/auditors_responsibilities/ar3.pdf.

Page 2 of 3

154 SYNERGY 2023 ANNUAL REPORT

Independent auditor’s report (continued)

My independence and quality management relating to the report on the financial

report
I have complied with the independence requirements of the Auditor General Act 2006 and the
relevant ethical requirements relating to assurance engagements. In accordance with ASQM 1
Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other
Financial Information, or Other Assurance or Related Services Engagements, the Office of the
Auditor General maintains a comprehensive system of quality management including
documented policies and procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory requirements.

Matters relating to the electronic publication of the audited financial report

This auditor’s report relates to the financial report of the Corporation for the year ended
30 June 2023 included in the annual report on the Corporation’s website. The Corporation’s
management is responsible for the integrity of the Corporation’s website. This audit does not
provide assurance on the integrity of the Corporation’s website. The auditor’s report refers only to
the financial report described above. It does not provide an opinion on any other information
which may have been hyperlinked to/from the annual report. If users of the financial report are
concerned with the inherent risks arising from publication on the website, they are advised to
contact the Corporation to confirm the information contained in the website version.

Sandra Labuschagne
Deputy Auditor General
Delegate of the Auditor General for Western Australia
Perth, Western Australia
6 September 2023

Page 3 of 3

SYNERGY 2023 ANNUAL REPORT 155

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GPO Box F366 Perth WA 6841

synergy.net.au

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