For a more precise result for Hydro Tasmania wind power energy in Australia market, this report will focus on strategic planning based on the analysis of their activities in the past a 5 years only. Mission statement As a renewable energy business, Hydro Tasmania is focused on growing an integrated energy business (Hydro Tasmania website, 2012). To develop and integrate energy, and contribute to a sustainable environment, so as to build value for Hydro Tasmania customer and people. Business Definition Hydro Tasmania is one of Australia’s leading clean energy businesses.
Every year, Hydro Tasmania produces around 9000 getaway hours (Ugh) of electricity from the renewable energy. They have an integrated hydrophone scheme that has a total capacity of over 2600 megawatts and includes 30 power stations, 50 major dams and arioso other infrastructures. Hydro Tasmania sells this energy in Tasmania and to the rest of Australia. Hydro Tasmania built Huxley Hill Wind Farm in 1998; it was the second commercial wind farm in Australia; and there are more operational wind farms are built, which are world class wind assets.
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Business Overview Hydro Tasmania is known for most of its history as The HECK that was founded in 1930, is the government owned enterprise that is the predominant electricity generator in the state of Tasmania. It was named Hydro Tasmania in 1999, and is still a 100% Government Business Enterprise. The company generates the majority of its revenue room renewable energy business that currently contributes 60 per cent of Australia’s electricity.
Hydro-Electric operates predominantly in Tasmania with its head office located in Hobart, Hydro Tasmania employs approximately 840 staff throughout its operations, and have assets worth around $4. 8 billion. Looking at the company’s financial performance, its revenue was $812,772,000 in 2011. (Annual report,Hydro Tasmania website, 2012) Error! Not a valid link. There are three entities under group brand Hydro Tasmania, and are divided into five divisions. For the purpose of this strategic plan the focus is on the third vision, wind farm that is under entity Hydro Tasmania.
Product/Service Category Key brands and products Wind Farm Developing Mussel Wind Farm 2. 0 External Environment – Remote Environment Factors in the external environment (I. E. Economic; Socio-culture; Political ad legal; Technological, Nature forces) can act as opportunities or threat influencing a firm’s process and outcomes to a significant degree (Turner 2007). Economic Forces: Wind energy is the most cost efficient renewable energy (Brushes 2008). To build wind farm provides more employment opportunities especially during the instruction period.
The annual land leasing for the turbine sites also contribute great payment to farmers. All these factors give great opportunities to develop wind power/farms. Implications Opportunity Rating Threat Rating Wind energy is the most cost-efficient renewable energy 4-4 Extremely high starting and operating cost (AWE 2009) 3-5 Employment during construction and to a lesser extent operation. 3-5 payments to farmers for the turbine sites 2-5 Solicitude Forces: Land lease The majority of Australians think of a wind farm in positive terms (Bond 2008) gives opportunity to develop wind power.
Moreover, increasing growth rate for the population meaning a increasing demand for the product (Wind Energy & Solar Power Australia 2009) The majority of Australians think of it in positive terms 4-4 People dislike the construction of wind plants near residential area because of the block of view and the possible loss in property values (Bond 2008) 2-3 Increasing demand for product with population increasing 4-5 Political or Legal Forces: Firstly, one of the most significant external factors that will bring to Hydra Tasmania a number of positive opportunities is the political factor.
The Australian government as always been concerned with the environmental issues. In recent years, apart from providing additional research and development funding for renewable technologies (Parliament of Australia 2008), it also has come up with a series of clean energy projects including the Renewable Energy Target Scheme (MERE) which hopes to achieve a 20% renewable energy production by 2020 (Brushes 2009). Secondly, another significant factor that may bring to the company a number of opportunities is the legal factor.
The Emissions Trading Scheme (TEST), by aiming to reduce the emissions of greenhouse gas and hence leading to a rise in coal-generated energy ill make renewable energy a better deal for the market to consider (Wind Energy & Solar Power Australia 2009). Implication Opportunity Rating Threat The government’s support to develop it so as to reduce green house gases 5-4 MERE 4-4 (TEST) legislation 4-5 Technical Forces: Wind power is a more mature technology than is solar. The MEMO South Australia Supply and Demand Outlook report of 2011). With the increasing demand of wind energy, new complex transportation solutions that enable the delivery of wind turbines or electricity to different parts of the world will need to match up (Robertson 2009) Wind power is a more mature technology. Are needed 4-4 Natural Environment Forces: new complex transportation solutions One of the significant factors that may bring to the company some threats in the operation of the business is the environment factors.
Despite the fact that wind energy being a renewable energy itself an environmental friendly option and can help fight against global warming (Wind Energy & Solar Power Australia 2009), it can also bring to the environment a lot of negative impacts due to the large land and equipments required in the production process (please refer to the implication table low for the possible threats to the environment).
Australia’s vast coast lines aids to the production of wind-generated power (Wind Energy & Solar Power Australia 2009) 5-5 The possibility of removal of native vegetation areas because of the huge area needed by wind farms (ACTION Australia , 2012) 2-4 Using more wind energy instead of non-renewable energy help to prevent global warming (Wind Energy & Solar Power Australia 2009) 5-4 Visual impacts caused by the tall structure of wind turbines (EWEA2009) 2-3 Erosion issue that might be raised by construction of a wind farm and its service road (American Wind Energy
Association 2009) 2-2 (Chesterton) 2-4 Bird-killings from the tall structures of wind turbines 3. 0 External environment – Near Environment Porter’s five-torte model that looks at the twelve tortes that determines the attractiveness of the industry that Hydro Tasmania operates in -the Australian wind energy industry. Customer/Buyer The bargaining power of buyer is worth taking notice as one of the important factors.
As wind energy is still in the development stage of the product life cycle in Australia, factors such as low switching cost, resulting from the fact that energy is an end- reduce being standardized with low brand identity and low product differentiation, In other word, buyers of energy products will be price sensitive (Brushes 2008), and willing to choose for the best deal across the whole energy industry freely.
Implications: A lot of substitutes are available 3-5 Buyer may pose a credible threat of backward integration 5-5 Buyers usually purchase in large quantities – mostly BIB 4-5 5-3 Low brand identity 5-3 Low product differentiation 3-3 Low switching cost 4-4 Competitors: High price sensitivity Although the current number of competitors in the wind energy industry is medium UT taking factors such as high growth rate, 6. 9% in 2011 (BARE 2011), due to favorable government policy (e. G.
REMOTE) that encourages the use of renewable energy, low switching costs due to a lack of differentiation among products, and high exit barriers into consideration, the industry can be undoubtedly termed highly competitive. Competitors Competing products Level of threat posted Prone Silverman Wind Farm Meridian Energy Macarthur wind farm Prone and Meridian Energy are two of the major competitors for Hydro Tasmania. Prone has been developing well in their wind power energy projects. Only in NEWS it as more than 700 wind turbines.
One of their major projects is Silverman wind farm, this is one of the largest on-shore wind projects in the world, With a potential operational capacity in excess of 1 ,MOW, and it is developed in a Joint venture with Manchuria Capital Wind Fund. (Prone Website 2012) Meridian is currently developing Macarthur wind farm which has 140 turbine located in Western Victoria, it is in a Joint venture with GAL Energy. (Meridian Energy Website 2012) They also have wind tarts in New Zealand and Antarctica. N Prone and Meridian are developing larger wind farms in Australia.
They have very strong Joint ventures that have strong brands, high capital, which all give Hydro Tasmania threats to develop bigger and better wind farms. However, as a leading energy business with a longer history that Hydro Tasmania have better technological know-how, and strong state government support to develop their wind farms. Moreover, Prone has great market share in NEWS, Meridian Energy has more in other states than Tasmania, therefore, such different focus allow Hydro Tasmania have greater opportunities to develop bigger market share locally, which matches Hydro Tasmania strategy direction. ( Hydro Tasmania Website 2012)