Leading economist Professor Ross Garnaut is set to take a more hands-on role in Australia’s low-carbon economy, announcing he will retake control of project developer Zen Energy in what he describes as a “friendly” de-merger from Sanjeev Gupta’s Simec group of companies.
Garnaut will re-emerge as the major shareholder in Zen Energy, this time through the Sunshot Energy business he has established with business partner Raymond Spencer.
The de-merger with Gupta’s Simec will see the UK steel billionaire retain control of several key projects, including the 280MW Cultana solar farm, the Playford big battery, and the Middleback Ranges pumped hydro project, all of which are destined to help reduce emissions and lower costs for Gupta’s Whyalla steelworks.
Garnaut and his two subsidiaries will reclaim the retail licence in each state, the existing retail business with Zen, and wholesale and project development capacity, and a pipeline of wind, solar and storage projects within Sunshot.
“We didn’t have exactly the same goals,” Garnaut told RenewEconomy. He said Gupta was focusing on lowering costs and emissions for his industrial sites, but Garnaut has bigger and broader intentions.
Zen Energy was founded in 2004 and was eventually merged into Sanjeev Gupta’s Simec Energy Australia in 2017. Shortly after that acquisition, Gupta flagged the potential for a public listing of the Simec Zen Energy Australia joint company, as a way to raise capital to drive the business’s expansion into larger projects.
The company had taken a central role in Gupta’s plans for sustainable manufacturing in the Whyalla region, after he stepped in to rescue the Whyalla Steelworks. As part of the Simec Energy Australia brand, Zen Energy has continued to establish its presence as a leading supplier of residential, commercial and industrial solar and storage solutions.
Gupta announced a $1 billion commitment to growing renewable energy supplies in Whyalla, which has included the construction of the 280MW Cultana solar farm to supply zero emissions power to the steelworks.
Zen Energy will now come back under the control of Sunshot Energy. Geoff Titus will return as CEO of Zen Energy.
“Supporting the renewable energy retail and technology strengths of Zen, with the development wholesale market capacities of Sunshot, is a natural partnership,” Garnaut said in a statement.
“Availability of highly competitive wholesale electricity from Sunshot Energy will enable Zen Energy to accelerate its efforts to increase competition in the energy market and lower costs through use of renewable energy.
“We now have the structure in place to deliver integrated energy solutions, combining onsite renewable energy hardware with renewables-backed energy supply contracts.”
Garnaut, who serves as both executive chairman and co-founder of Sunshot Energy, has touted the competitive advantages that Australia has in renewable energy technologies, including in the book Superpower publish last year, saying that Australia is ideally positioned to benefit from a global transition to clean energy and zero emissions manufacturing.
“Australia has the natural conditions to be a renewable energy superpower. It is up to us to use those advantages for our own prosperity and the world’s containment of climate change.
“We are committed to increasing competition in Australia’s energy market, offering our customers comprehensive sustainable energy solutions, and enhancing energy security. We will continue to work with the world’s best providers of technology in this space.
In the statement, Gupta saying he hopes to see Zen Energy continue to thrive.
“Zen Energy was one of my first investments here in Australia in 2017 when we acquired a majority shareholding. I was drawn to the company as they shared the same passion for renewable energy and the transformative effect it can have on homes, businesses, and governments,” Gupta said.
“South Australia is uniquely positioned to lead Australia through the inevitable transition to renewables, so I am confident both Simec Energy Australia and Zen Energy have a very bright future.
“I would like to especially thank Professor Ross Garnaut for his leadership and expertise over the last four years. Ross’ deep understanding of the evolving renewable energy space was pivotal in the development of our $1 billion renewable energy program. I wish Ross and the entire Zen Energy team all the best for the next stage of their business journey,” Gupta added.