The South Australia Government has agreed to get 80 percent of its energy in 2018 from SIMEC ZEN Energy, part of Sanjeev Gupta’s GFG Alliance. This will increase to 100% in 2019 when new renewable power sources come on line.
The government announcement described the agreement as: “bringing much-needed competition to the retail electricity market and putting further downward pressure on prices.”
South Australia Premier Jay Weatherill said, “It’s fantastic that we were able to secure the electricity to supply our hospitals, schools and electrified rail for the next few years while supporting the growth of a new retail business that will bring some much-needed additional competition into the energy market.”
The GFG Alliance, through its energy division SIMEC Energy, established a partnership with ZEN Energy in September of 2017. At that time, SIMEC acquired a majority stake in ZEN, creating SIMEC ZEN Energy.
This followed the GFG Alliance’s acquisition of Australia’s largest integrated steel and mining business, Arrium, now LibertyOne Steel, in October.
Speaking on the acquisitions at the time, Gupta, said, “The high cost of energy for Australian consumers is debilitating for the economy and a crying shame for a country so rich in resources. We clearly see a need for industrial groups and energy generators to work together. Long-term sustainable energy solutions need to be founded on both economic and environmental principles in order to work properly.”
Gupta disclosed that he is already in talks with senior figures in other states about bringing similar deals to both industrial and domestic users.
“I see today’s milestone as signaling the dawn of a new Australian industrial era, led by a revolution in energy prices; bringing down costs, achieving productivity gains and boosting long-term competitiveness for manufacturing and engineering businesses right across the country,” said Gupta.
This is the latest step in the GFG Alliance’s blueprint for an energy-led industrial revival across Australia, which, according to Gupta, “will see SIMEC ZEN Energy redefine the energy landscape of Australia, bringing down costs dramatically and making globally competitive energy a key advantage for Australian industry.”
Energy Minister Tom Koutsantonis, concluded, “This contract will help underpin SIMEC ZEN Energy’s investment in South Australia and add new competition to the retail market, putting downward pressure on power prices that will benefit all South Australians.”
Several issues with this article. It is not about South Australia and is limited to the South Australian government procurement for its own electricity. Also, to date there has been no confirmation or assurance that this PPA includes the voluntary surrender of LRTET RECs/LGCs and until this is confirmed the contract can only be considered as for grid electricity.