UK steel billionaire Sanjeev Gupta has flagged a possible float of the Simec Zen Energy business that will take the lead in his ambitious solar and storage program, and confirmed his company’s interest in bidding for the Coalition government’s controversial tender for new dispatchable generation.
One of Gupta’s key lieutenants in Australia, the CEO of Simec Zen Mark Barrington, told The Australian newspaper that the company – formerly chaired by economist Ross Garnaut and now majority owned by Gupta’s GFG Alliance – would likely need access to capital in the future to develop its ambitious plans, and a float was one option.
Gupta has flagged up to 1GW of solar and storage – a battery bigger than the Tesla facility at the Hornsdale Power Reserve plus a pumped hydro project in an old iron ore mine – as part of his “Green Steel” plans to revive the fortunes of Whyalla. He has also flagged a solar rollout 10 times bigger as part of a push to “solarise” the Australian economy and provide a platform for manufacturing with a cheap and green power supply.
Barrington also confirmed Gupta’s interest in the government’s underwriting tender for “new dispatchable” generation that will seek “registrations of interest” until January 23, in the hope that contracts can be finalised – after a more formal request for proposals – before the next federal election is called for mid May.
“One thing that will help achieve globally competitive prices is the underwriting guarantee that has come out of (energy minister) Angus Taylor’s office,” Barrington told The Australian.
“This is a positive because the issues around funding at good, low rates all centre around the nature of credit. So being able to bring in new, competitive retailers is a good way to compete against the entrenched energy companies that are out there.”
However, Taylor’s office has largely ignored the details of the ACCC recommendation, and has opened up the tender to existing coal and gas plants, and could drop any requirement for lower emissions technology.
It also reserves the right to pick and choose whichever mechanisms suits the needs of its preferred proposals.
This is largely seen as a move to accommodate proposals such as the life extension of the ageing Vales Point coal-fired generator in NSW, possibly in conjunction with a long-term off-take agreement with the Tomago aluminium smelter, which is concerned about the planned closure of the Liddell coal generator in 2022.
Gupta could also offer a competitive project – the Cultana solar project near Whyalla plus the mooted 140MWh big battery – as well as a firm contract with the Whyalla steel-works he owns and/or other big energy users.
The Coalition plans four different phases to this tender, but this may be academic if the Coalition loses power, as the polls predict, in the next election.
