Essential Energy’s Corporate Strategy sets a clear direction for how we best contribute to the energy transition. The Strategy upholds safety, reliability and affordability as our customer commitments while recognising the growing role of the electricity distribution network in the transition to a lower carbon world. The Strategy was expanded during 2023–24 to acknowledge the digital transition’s role in our ability to meet the needs of the communities we serve.

Through our Strategy, we are building capabilities and enhancing network insights to strengthen our core business capabilities and enable the network. Business process and system initiatives are streamlining and enhancing our network management and administrative functions. Our new Enterprise Asset Management (EAM) solution, launched in May 2024, strengthens how we track and analyse electricity network asset data to support strategic and operational decisions.

Innovations in Consumer Energy Resources (CER) (including rooftop solar and batteries) are providing locally-generated energy when communities need it, driving connections and load across the network and enhancing its resilience. During the year, we installed our first two pole-mounted batteries, in Clarence Town, to help mitigate local network issues and enable increased exports from CER.

We plan to deploy 35 pole-mounted community batteries as a trial with Origin Energy, with the first of these installed in Wagga Wagga during June 2024.

We hosted Future Energy Roadshows throughout regional New South Wales (NSW) during 2023–24, with support from Charles Sturt University and Business NSW, to engage with our customers and communities about the energy transition. The events provided information about renewable generation and innovations, as well as potential economic benefits for regional communities.

Key to these opportunities is the potential to connect more large-scale renewable generation to Essential Energy’s existing distribution network. The 57 large-scale systems already connected have a combined capacity of 1.54GW. More than 3,000GWh was delivered to the Essential Energy network by these systems in 2023–24. This generation served more than 23 per cent of total Essential Energy network load during the year. Essential Energy’s network includes approximately 10,000km of sub-transmission powerlines, with capacity to host more than 8GW of new large-scale renewable generation and storage, while reducing the need for new infrastructure. We are working with regulators, renewable generation developers and other industry stakeholders to optimise the use of the Essential Energy network – to help streamline the energy transition and benefit regional communities and Australia.

Essential Energy continued to support electric vehicle (EV) adoption by trialling innovative solutions for charging infrastructure across our network area. Working with key suppliers, during the year we installed the first electricity pole-mounted EV charging point on our network and developed and trialled a fully integrated streetlight pole-mounted EV charger. These technologies use existing infrastructure and electricity supply to provide convenient charging options for all EV owners. These projects are helping us refine our charging point connection and installation practices to support increasing connections.

Providing communities with access to safe and reliable power during extreme weather events remains a focus. In May 2024, we secured Australian Government funding for six portable Stand Alone Power Systems (SAPS) to support vital telecommunications infrastructure during extreme weather events, as well as improvements at 12 network locations vulnerable to flooding and bushfires. To improve the resilience of our network, we installed more than 30 fire-resistant composite poles in South Durras and committed to replacing more than 11,000 timber poles with composite poles over the next five years.

Safety remains a core value so that our employees, contractors, customers and communities can return home safely each day. Our 2023–24 safety performance was mixed. No Major Lost Time Injuries (LTIs) were recorded. However, the Serious Claim Frequency Rate (SCFR), Total Recordable Injury Frequency Rate (TRIFR) and High Potential Incidents Frequency Rate (HPIFR) all increased compared with the previous year. Near miss incident reporting increased slightly, typical of a mature safety culture. Our Health and Safety Strategy will continue to advance our safety focus in the year ahead.

We are building an inclusive, diverse and growth-oriented workforce. Employees embraced our new future skills training program which is increasing capability for managing the energy transition’s impacts on our network. We also welcomed 143 new apprentices, 20 trainees and 21 graduates to our business in early 2024, bringing the total number of people in these Early Talent Pathway roles to 359, as of 30 June 2024.

Broadening the diversity of our industry and workforce is a continued focus.

Achievements this year included developing our first Accessibility and Inclusion Plan and delivering domestic and family violence information sessions for more than 1,200 employees.

At the Work180 Equitable Workplace Awards 2024, Essential Energy received the ‘Pay Equity’ award and the ‘Mining, Resources and Energy’ award. This was pleasing recognition of our progress towards gender balance and encouragement to continue our efforts.

We advanced our progress towards reconciliation, through career and business opportunities, cultural awareness and engagement with Aboriginal and Torres Strait Islander people, while also preparing our next Reconciliation Action Plan. Our new First Nations Engagement team is building meaningful relationships with First Nations communities in our network area and working to better understand the experiences of our First Nations customers.

Employee engagement levels increased this year, continuing the upward trend of recent years. The percentage of engaged employees rose to 45 per cent in 2024, up from 40 per cent in 2023 and 15 per cent in our first survey in 2018. We remain committed to listening to our people and improving as an organisation, to be a workplace we can all be proud of.

Maintaining strong relationships with our communities is fundamental to our business. We continue to listen and learn directly from our customers through our Customer Advocacy Group and Essential People’s Panel.

We supported local community organisations, donating more than $514,000 to community groups, stakeholders and charity organisations – combined contributions from Essential Energy and our employees. We particularly thank our employees for their continued generosity in support of our Essential Giving Program charities.

Intium, Essential Energy’s new commercial subsidiary, progressed during the year toward establishing itself as a provider of innovative energy solutions to support Australia’s transition to net zero. Securing Intium’s first Preliminary Works Agreement – for the Forest Glen Solar Farm Connection Infrastructure project – was an exciting milestone. The project involves helping the customer to design, construct and operate electricity network connection infrastructure for a 90MW solar farm and future battery storage solution.

The Australian Energy Regulator (AER) approved our 2024-29 revenue allowances on 30 April 2024 in response to our Regulatory Proposal and Tariff Structure Statement. Developed after consultation with more than 400 customers and stakeholders, the Proposal outlines how we will operate and maintain the network along with proposed capital investments, and associated costs, over the five years from 1 July 2024. Under the approved proposal, we will continue to strive to keep customers’ network charges as low as possible.

Essential Energy delivered sound financial performance (page 72 of Annual Report PDF) for the year with earnings before interest, tax, depreciation and amortisation (EBITDA) coming in above the Statement of Corporate Intent target by $29.6 million. The net loss after tax of $46.2 million was unfavourable to target and was largely due to high depreciation, amortisation and impairment costs following revaluation of assets and the impairment of public lighting assets.

Total assets of Essential Energy increased by $284.7 million over the financial year, mainly driven by capital expenditure of $691.8 million which was $37.5 million more than target.

We sincerely thank all employees for their dedication and contributions during the year and thank our shareholders and stakeholders for their ongoing support. By working together, we can continue to lead the way in helping regional, rural and remote communities transition to the net zero economy.

DOUG HALLEY
Chair

JOHN CLELAND
Chief Executive Officer