Swiss commodity trader gets approval to buy Zen retail business and PPA deals. Will it take on Big 3?

Swiss commodity trading giant Gunvor, one of the biggest in the world, has obtained regulatory approval to buy the retail business of Australian renewable energy group Zen Energy, and some of its power purchase agreements that it uses as a hedge.

The proposed deal – the terms of which have not yet been revealed – does not include Zen’s asset development business, but does include three PPAs with two solar farms and a solar hybrid and a tolling agreement with a big battery project that forms part of Zens’s hedging portfolio.

The approval for the proposed deal comes from the Australian Competition and Consumer Commission, which provided a waiver on the proposal because it says there is no horizontal overlap between the buyer and the seller, and because there is no impact on competition. Its decision was made on June 24.

Gunvor was rumoured as a buyer of Zen Energy in April, which Renew Economy editor Sophie Vorrath wrote about here, and it is no secret that Zen Energy has been canvassing buyers for all or part of its business.

Gunvor is a relatively new player in the Australian market, and hired David Maher, an energy trader who has worked with Stanwell in Australia as well as NEMMCO, to head its power trading in the Australia Asia Pacific region in 2024.

So far, the company has announced only a virtual off-take deal with Akaysha Energy’s new Brendale battery in Queensland that was revealed last year, also as reported by Sophie Vorrath.

Maher said at the time of the Brendale deal that it points to the growing opportunity in Australia’s energy market and the role global partners can play supporting the transition.

“This partnership will be an important part of Gunvor’s APAC strategy as we expand our involvement in the energy transition and provide risk management services,” he said at that time.

“This landmark  Agreement reflects the growing role of batteries in delivering much needed flexible and reliable  energy solutions. We look forward to furthering our commitment to innovative, sustainable  energy solutions.” 

But the purchase of Zen is a new move. Gunvor is a supplier of fuel to Australian fuel importers, and only participates in the wholesale electricity market with derivative contracts, such as that arranged with Brendale.

Gunvor is not involved in the wholesale generation, or the retail supply, of electricity in the NEM or elsewhere in Australia, and it does not own or control any operating energy generation assets or infrastructure.

But its emergence is interesting as it represents a potentially deep pocketed new entrant into a market that is still dominated by the big three private gen-tailers – Origin, AGL and Energy Australia – along with the federal government Snowy Hydro, but is seeing the arrival of new innovative players like Amber and Flow Power.

Interestingly, Maher is a former strategic business development director at Vitol, another global energy commodity trader, which bought into another new player in the Australian market, Flo Energy, that launched into the Australian market in 2023.

Other players targeting the commercial and industrial sector – seen as the most interesting – include the Marubeni-backed Smartest Energy.

The PPAs are linked to the Tailem Bend 2 Hybrid Project in South Australia, and 23 percent of the 400 MW New England solar farm (stage 1) and the Moree solar farm, both in NSW.

The virtual toll agreement is with Zen’s 111 MW, 270 MWh Templers big battery in South Australia. Gunvor also proposes to acquire employees, intellectual property, licences, and IT systems as part of the deal.

Renew Economy is reaching out to Gunvor and Zen for comment.

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