A damning draft report into the engineering factors that led to a catastrophic explosion at the Callide C power station has found its state-owned operator CS Energy failed to "value and implement effective safety practices" at the Central Queensland facility.

CS Energy commissioned forensic engineer Dr Sean Brady, of Brady Heywood, to review the cause of the 2021 explosion that resulted in a unit at the power station, near Biloela, being taken offline.

The explosion led to almost half a million Queensland customers losing power, becoming the state's worst power outage in decades.

CS Energy previously revealed the explosion was caused by the failure of a battery back-up system at the power station's C4 unit.

"The key organisational factor that contributed to the incident was a failure to implement effective process safety practices that would have increased the likelihood of identifying and managing the risks associated with replacing the new Unit C4 battery charger and bringing it into service," the draft Brady report said.

"This vulnerability, combined with known issues relating to key systems such as management of change, resulted in an organisation with a reduced likelihood of being able to anticipate and prevent a process safety incident."

The report found that in this context, "the failure to understand and assess risk, and to not effectively apply sound management of change processes in relation to the engineering factors that led to the catastrophic failure", suggested that "these were not isolated incidents".

"But rather [they were] a symptom of an organisation's failure to value and implement effective process safety practices."

The report noted the process safety program was "under-resourced and starved of funding".

"There was effectively no process safety team from April 2019 to July 2020."

'Competing tensions' between cost reduction and process safety

The draft report found that CS Energy operated in the context of significant constraints — including its status as a government-owned corporation, a joint venture ownership of Callide C power station, a highly regulated energy market and the impacts of climate change.

"The metrics focused on by the CS Energy board did not include a focus on the management of process safety. Instead, they were focused on personal injury, plant availability and financial performance."

It found "there were likely competing tensions between cost reduction and process safety".

"And while process safety was discussed in the organisation, it did not result in any meaningful improvement in how major accident risks were managed within operations."

Between 2017 and the incident in May, 2021, Callide experienced significant turnover of key roles.

"This turnover would make it difficult to maintain a process safety focus," the draft report said.

Shared ownership led to 'competing priorities'

Dr Brady found CS Energy's 2020 shareholder mandate — subject to negotiation with Treasury — drove a focus on cost savings, while at the same time placing constraints on the government-owned entity's investment strategies, including its existing assets.

The shareholder mandate is issued by the shareholding ministers every five years.

"CS Energy sought to use surplus cash reserves for investment in its existing and new assets, but received a more limited agreement that debt management must be considered equally with portfolio revenue," the draft report said.

The report said there were significant internal reforms and pressures from 2017 onwards.

"Shareholder mandates have pushed to extract more from aging assets, and multiple cost cutting initiatives have been undertaken," it said. 

Energy Minister Mick de Brenni told reporters "maintenance funding provided by the government has been increasing year on year".

Callide C power station is a 50/50 unincorporated joint venture between Callide Energy Pty Ltd and an international power generation company called Genuity Group.

Government aims to fully own generators

Premier Steven Miles said the government would be taking steps to "achieve 100 per cent ownership of the Callide generators".

"One of the causes Brady points to in his report is confusion over management structures because of that complicated joint venture arrangement, so 100 per cent public ownership is what we think will assist there," he said.

He welcomed the release of the latest drafts of the report and said the government will appoint special advisors to the board of the state-owned corporation, "to ensure the government has more direct influence over the direction and to ensure that it has appropriate governance".

"We are also directing all of our government-owned corporations a detailed management plan for all of their assets," he said.

Mr Miles said the government would also conduct a review into the publicly owned generation businesses.

Opposition leader David Crisafulli said he had received an urgent briefing about Callide, saying, "this is one of the greatest scandals we've seen in this state for a long, long time".

"It is completely and utterly disgraceful," he said.

"This is a scandal, someone must be held accountable."

In a statement, a CS Energy spokeswoman said that what was released today were "Dr Brady's draft opinions".

"When we receive the final Brady Heywood report we will publish it, along with our learnings," she said.

"We will work with the government to implement their recommendations."