A new multi-billion fund with former prime minister Julia Gillard as its chair has made a spectacular push into Australia’s renewable energy market after beating off other big name contenders to seal the purchase of the Victoria wind, solar and storage assets of Neoen.
The assets sold by Neoen include the Victoria Big Battery, the Bulgana wind farm and battery, the Numurkah solar farm and more than 2.8 gigawatts of development assets. The purchase price is $950 million.
Neoen was obliged to sell the assets because of its own impending takeover by Canada’s Brookfield, which also has a controlling stake in the Victorian network company Ausnet. The competition regulator deemed there was risk of favouritism and disadvantaging other energy companies.
The HMC Energy Transition Fund was only unveiled a few months ago by HMC Capital principal David Di Pilla, with big plans to raise some $2 billion and become a major player in the renewable energy transition.
“Today is an exciting and significant step in our ambition to be a national champion of Australia’s transition to a net zero carbon economy by 2050,” Gillard, who is the chair of energy transition at HMC.
“This is a marquee acquisition to further seed HMC’s Energy Transition platform, encompassing a diversified range of renewable energy generation and storage assets. We look forward to partnering with some of Australia’s leading institutional investors in creating a clean energy future and fighting against climate change.”
Neoen says that despite the sale it still aims to reach 10 gigawatts of wind, solar and battery capacity in Australia by the end of the decade. It will have 3.7 GW of wind, solar and battery capacity in operation or under construction after the sale, including the country’s biggest battery at Collie (560 MW, 2240 MWh).
The Collie battery will have five times the storage of the Victoria Big Battery, which was for a long time the biggest in the country, and which secured a landmark contract with the state government and the market operator to act as a kind of shock absorber for the grid – a blueprint that has now been followed in NSW with the Waratah battery.
“We are extremely proud of the legacy of our Victorian portfolio – it represents a huge collective effort and a significant contribution to the State’s energy transition, and we remain deeply grateful for strong support of AEMO and the Victorian Government, ” said Jean-Christophe Cheylus, Neoen Australia’s CEO.
HMC beat off a number of big name players that were reportedly circling the assets, including Spanish-owned Iberdrola Australia and France’s Engie.
It’s not the first move by HMC but it is its biggest. It has already secured he Neoen Victorian portfolio is highly complementary to HMC’s seed asset investment in Stor Energy, which has a portfolio of six battery storage projects through Stor Energy, which are expected to start rolling out from 2027.
The 2.8 GW development pipeline to be inherited from Neoen includes over 1.5 GW of wind and 1.3 GW of storage. The projects, at various stages of development, are Bulgana Battery Extension, Kentbruck Battery, Kentbruck Green Power Hub, Loy Yang Wind Farm, Moorabool Battery and Navarre Green Power Hub.
Angela Karl, a former partner at QIC Global Infrastructure and founding director of Tilt Renewables, who managed the HMC transition fund, says it is a significant event that will propel the company into the top players in the industry.
“This will cement our Top 10 position in renewable energy and storage in the National Energy Market from Day 1,” Karl said in a statement. We look forward to working collaboratively with Neoen, our customers, our landowners and other key stakeholders to implement a smooth transition.”
Karl told Renew Economy in an interview that the deal valued the portfolio at around $1.5 million a megawatt, plus the development assets. “It’s a phenomenal price,” she said, noting that similar transaction were often pitched in the mid 2s, or even $3m/MW when the purchase comes with a management team.
That’s not the case with the Neoen deal, but Karl says the acquisition of Stor Energy, led by Gerard Dover, will give it a ready-made management team. And she recognised that HMC had an advantage in the deal because it did not need to seek foreign investment board approval, unlike its rival bidders.
“The development pipeline is entirely wind and batteries, which is what we’re really focused on, and it’s worked well for us,” Karl said.
HMC has broader ambitions than just being a major player in the renewables space, and Karl says the focus is also on green transport, natural capital and industrial decarbonisation.
“So we are building an integrated platform, and our goal is to be national leader for decarbonisation. So renewables is a necessary part of that, and we’ve always had a strategy that would necessarily be have a significant focus in utility scale, preferably wind and battery.
“But we’ve also got deep opportunities where we’re looking at natural capital solutions, transport decarbonisation, industrial decarbonisation. So there is more to come.”
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