ALINTA SPENDS BIG ON LOY YANG B
CHINESE-OWNED Alinta Energy is moving back into coal-fired power generation after entering a conditional binding agreement to buy the Loy Yang B coal power plant in Victoria for an estimated $1.2 billion in November. Owned by ENGIE (70 per cent) and Japan’s Mitsui (30 per cent), the 24-year-old 1000 megawatt (MW) power plant supplies about 17 per cent of Victoria’s energy needs, with coal sourced from the adjacent open cut Loy Yang mine. The project has been on the market for six months with a line-up of eager buyers including China's state-owned China Resources and a consortium including Delta Electricity and Apollo Global Management. The deal will mark Alinta Energy’s re-entry into the coal market after closing its 520 MW Northern power station in South Australia in 2016. It is also in line with ENGIE’S long-term strategy to end coal production following the closure of it Hazelwood coal plant in March 2017. “This transaction confirms ENGIE’S positioning in low-carbon generation, energy infrastructures and integrated customer solutions,” ENGIE chief executive Isabelle Kocher said. Alinta Energy chief executive and managing director Jeff Dimery said the transaction would add modern, reliable and efficient baseload generation to its portfolio and further support its role as a growing energy company on the east coast. “Alinta Energy is delighted that our owners [Chow Tai Fook Enterprises] have made this major investment in the State of Victoria,” Mr Dimery said. “It will provide much-needed certainty for the Latrobe Valley and secure the future of the Loy Yang B power station, which will continue to deliver essential services to both Victoria and the NEM, for many years to come.” However the news was not welcome by all. Delta Electricity owner Trevor St Baker, one of the company’s which lost out on the deal, voiced his disappointment with the Government’s decision to allow the sale to Chow Tai Fook Enterprises to proceed. "If the government wants foreign companies playing 'ducks and drakes' with Australia's electricity pricing, [then] they have got that result, despite it being contrary to their announced critical national electricity generation infrastructure policy," Mr St Baker told the Australian Financial Review. Mr Dimery, while not able to comment on the foreign investment conditions agreed upon, said the Foreign Investment Review Board “felt the national interest test was being met".
The Loy Yang B coal power plant in Victoria.