CS Energy is facing a $1 billion-plus damages claim from its joint venture partner in the Callide C coal-fired power plant near Biloela.

Sev.en Global Investments, through its subsidiary IG Power, has filed a statement of claim in the Federal Court of Australia concerning the explosion of the C4 generator in 2021, the collapse of the C3 cooling towers in 2022 and the explosion of the C3 boiler in 2025.

The Czech-based investment group is seeking to recover losses, saying more than 1700 days of generation capacity had been lost in the last five years alone between those two units.

State Government-owned generator CS Energy operates Callide C on behalf of the JV.

It said it had been aware for a number of years of potential claims by Sev.en for alleged losses relating to historical events since 2021 at Callide C.

“CS Energy will defend the legal action brought by Sev.en Global Investments in relation to any such claims,” a CS Energy spokeswoman said.

“CS Energy is committed to the safe, reliable and compliant operation of Callide C in the best interests of Queenslanders and the Crisafulli Government’s Energy Roadmap.”

Sev.en argues CS Energy failed to disclose deficiencies in its process safety procedures (identified in numerous audits and complaints) as well as the specific deficiencies in its management of the battery recharger project that sparked the 2021 explosion and its maintenance of the cooling towers.

Among other things, it failed to disclose to the JV partner serious concerns expressed by a CS Energy process safety manager in early 2019, who resigned due to the ‘unmanageable’ workload, ‘responsibility without authority/resources’ and ‘toxic’ culture, according to the statement of claim.

These concerns included that ‘the lack of maintenance at Callide over the last few years, pushing out overhaul dates, ageing plant and budget restrictions, four fires in five months and several managers over the past few years… [were] the tell tale signs that a process safety incident is quite possible’, it said.

IG Power’s case states that repairs in the wake of the 2021 C4 unit explosion have so far cost $250 million, while the costs of the repair, demolition and rebuild of the C3 unit cooling towers exceeded $330 million.

As a result of the incidents, generating unit C4 was offline from May 25, 2021, to August 30, 2024, and unit C3 was offline from October 31, 2022, to April 11, 2024.

As a result of the C3 boiler explosion, additional repair costs were incurred and unit C3 was offline for a further 58 days, resulting in millions of dollars in foregone revenue and profits, it stated.

The statement of claim says that; ‘while offline, unit C3 and unit C4 were unable to export electricity to the grid and were therefore unable to generate any revenue for IGPC and CEPL. As a 50 per cent owner in the joint venture, IGPC was required to pay over $290 million in rebuild costs and lost many hundreds of millions of dollars in foregone profits.

‘As a result of Callide C being totally offline following the C4 explosion and C3 cooling tower collapse, yet facing large liabilities for the rebuild costs, IGPC had no income and was put into voluntary administration. The administration costs were over $36 million.’

CS Energy was then contractually entitled to make unilateral decisions about the operation and management of Callide C, including the rebuild, it said.

‘As a result of the C3 boiler explosion, additional repair costs were incurred and unit C3 was offline for a further 58 days, resulting in millions of dollars in forgone revenue and profits,’ the statement of claim says.