Corporate Sector Action Speeding Demise of Australian Coal
Australia’s beleaguered coal industry has sustained “another stake in the heart” with a landmark deal that will find UK “green steel” billionaire Sanjeev Gupta’s fledgling renewable energy company, SIMEC ZEN, providing solar power at cut-rate prices to five of South Australia’s biggest energy users.
The CEO of the South Australian Chamber of Mines and Energy (SACOME), Rebecca Knol, “kicked off the plans for a corporate bulk-buy of renewable power way back in 2016, in response to wholesale electricity prices that she describes as the highest and most volatile in Australia, if not the world,” reports Renew Economy. “We wanted energy affordability, energy reliability, and energy security, and this deal with SIMEC ZEN Energy delivers all three,” Knol said.
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
The eight-year agreement, signed with a consortium brought together by SACOME, will cut energy costs for Australian mining giant Hillgrove Resources, chemical producer Adchem, retailer Foodland, storage and handling group Viterra, and irrigation infrastructure giant Central Irrigation Trust by as much as 50%.
“Gupta’s deal is doubly significant,” RenewEconomy notes, “because it is the start of his own plans to create an Australian solar-powered company, with plans to build 10 gigawatts of large-scale solar to slash the energy costs of his own manufacturing businesses and others.”
The deal is also part of a broader pattern, “just the latest in a flood of contracts between large energy users and solar companies to slash their electricity costs by sourcing power directly from their own or third-party solar farms.”
In recent weeks, the Melbourne-based e-publication notes, “companies such as CUB, Mars Australia, and the University of Queensland have signed contracts to meet all their electricity needs with large-scale solar plants, and others such as zinc refiner Sun Metals, Telstra, and CC Amatil will use solar and/or wind to supply a large part of their needs.”
But the SACOME/SIMEC ZEN deal is still a “landmark”, demonstrating “what can be achieved when businesses decide as a collective that the status quo is not acceptable”—as Gupta himself put it in a media statement last week.
That unacceptable situation has been around for a long time, RenewEconomy notes. “While South Australia’s high and volatile power prices have been blamed by conservatives and ideologues as the fault of renewables, in reality the state has always experienced such high prices, even causing the state grid provider to investigate wind energy more than half a century ago.”
The SACOME/SIMEC ZEN deal has many hoping that such energy volatility, insecurity, and crazy prices will now be things of the past. “This cross-sectoral collaboration has delivered affordable power to some of South Australia’s largest energy users and underpinned the development of new supply for the collective benefit of the state,” Knol said.