The Australian Energy Review - - CONTENTS - EL­IZ­A­BETH FABRI

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".

Im­age: ENGIE.

The Loy Yang B coal power plant in Vic­to­ria.

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