Now that Chapter 18 has been posted, the Hydro Explainer series has reached the end of its journey – at least for now. My thanks to everyone who has stayed with it. A clearer understanding of what is actually happening inside our energy system is the only way we will make progress together.
For ease of reference, all eighteen chapters have been combined into a single PDF. The Executive Summary sets out the purpose of the Explainer, and the Table of Contents is the best way to navigate the material. If you want to understand how the NEM works, Chapter 4 will take you straight there. If you’re curious about the components that make up Hydro’s profits, Chapter 10 is the place to start. And if you want to see the myths that have distorted the public debate on Tasmania’s electricity future, Chapter 14 lays them out clearly. The full Explainer PDF is available HERE.
Given the length of the full document, I’ve also produced a shorter Summary version – not a chapter‑by‑chapter précis, but an overview of the analysis and its key conclusions. That can be found HERE.
And for those who prefer something even more concise, there is a Dot‑Point Summary HERE
– a quick reminder of the main ideas that need to be understood.
This paper reminds us that Hydro Tasmania has been the State’s most important financial and strategic asset for more than a century. It powered industrialisation, stabilised the Budget, and gave Tasmania a rare degree of economic independence. But the financial position revealed in the 2024/25 accounts shows a business under growing pressure – and a public narrative that no longer reflects the underlying reality.
This Explainer has been written with support from John Lawrence and draws on information publicly available on the Australian Energy Market Operator, the Office of the Tasmanian Economic Regulator, Annual Financial reports of the State-owned Energy Companies and other relevant public documents. The Explainer seeks to set out, in plain English, how Hydro actually earns money, how the National Electricity Market shapes its fortunes, and why the numbers in its accounts now matter more than at any time in the past two decades. It dismantles the myths that have dominated public debate – including the belief that Tasmania earns Victorian prices, benefits from negative Victorian prices, or can rely on arbitrage to fund its future. It explains the mechanics behind IRRs, LGCs, PPAs, REGOs, FCAS, and the Tasmanian price, and shows how each contributes to Hydro’s revenue, risk, and long‑term sustainability. There abbreviations are all supported by a glossary of abbreviations and terms to assist readers.
The reconstructed financials reveal a clear pattern: underlying profit has turned negative, liabilities have grown, cash flow has tightened, and Hydro’s liquidity now depends on borrowing rather than earnings. The business is more leveraged, more exposed to drought and market volatility, and more dependent on settlement flows than most Tasmanians realise.
The Explainer also examines the governance environment – the Whole of State Business case (WoSBC) redactions, the opaque annual report, the refusal to disclose basic financial information, and the public repetition of myths about the NEM – and shows how these patterns have eroded transparency at a time when clarity is most needed.
The final chapters look forward. They outline the fiscal stakes for Tasmania, the reforms required to restore transparency and resilience, and the choices that will determine Hydro’s next century. The message is simple: Hydro remains one of Tasmania’s greatest assets, but its future – and the State’s – depends on honesty, clarity, and reform.