Energy giant Royal Dutch Shell has expanded its presence in Australia’s electricity market, buying retailer Powershop from NZ’s Meridian Group as part of a $729m deal that may irk some customers who have tried to avoid fossil fuel companies.
Infrastructure Capital Group will take the non-retailing arm of Meridian’s Australian operations, which includes the Mount Mercer and Mount Millar windfarms, and hydro power plants attached to the major dams of Hume, Burrinjuck and Keepit.
Neal Barclay, Meridian’s chief executive, said the sale offered an “exciting opportunity” for the Australian assets and their employees given Shell’s and ICG’s plans to develop their respective renewable energy and retail presences in Australia.
“With emissions the problem, and renewable energy the solution, the buyers are readying to invest heavily in a cleaner future. The Meridian Australia team will be at the heart of a transformation that is not only good for Australia, but also the planet,” Barclay said in a statement to the NZ stock exchange.
Powershop, with about 185,000 customers, has touted its clean energy credentials, including its Climate Active certification from the Australian government that recognises its net zero emissions status.
The retail arm sells electricity to customers in Victoria, New South Wales, South Australia and south-east Queensland as well as selling gas in Victoria.
A Meridian spokesperson defended the sale of the retailing arm to one of the world’s biggest fossil fuel companies, saying the company’s commitment “to do good by our customers and the planet is stronger than ever”.
“We consider this sale as a positive for both, knowing customers will get the same great service and knowing Shell Energy and its partner ICG’s vision is to significantly invest in a transition to a cleaner energy future,” the spokesperson said. “We are proud of that.”
However, Market Forces executive director Julien Vincent said his own operations would be switching power providers “as soon as possible”, following Shell’s takeover of Powershop.
“Tens of thousands of people have switched to Powershop, lured by its claims of being a progressive company, disrupting the traditional power retailers and promoting renewable energy,” Vincent said.
“For Powershop to be in the hands of Shell, a company still fighting against a court ruling that it must reduce greenhouse gas emissions in line with the Paris Agreement, and with a history of tax avoidance in Australia, will turn the stomachs of many customers,” he said. “[T]his is undermining the concept of community power, making Powershop’s revenue available to the old fossil fuel establishment.”
Don Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility, though, said more competition in the power sector was good, and the sale would “put a heap of pressure on Origin and AGL to decarbonise more quickly”.
For its part, Shell said the purchase extended the firm’s reach into households as customers, and included offtake agreements for Meridian’s hydro and wind plants that are being sold to ICG, an Australian asset manager.
“[W]e are well-placed to manage complexity for customers so that we deliver simple, cleaner energy solutions,” said Elisabeth Brinton, Shell’s executive vice-president of renewables and energy solutions.
The companies did not disclose the price paid for the different components.
Other non-fossil fuel assets owned by Shell in Australia include the 120-megawatt Gangarri solar plant being built in Queensland; Sonnen Australia, a home battery energy storage systems provider; and the 49% share in Australian solar developer, ESCO Pacific. Shell last year bought Select Carbon, a firm specialising in carbon farming.
Read More:Shell increases stake in Australia’s electricity market with Powershop takeover | Royal Dutch Shell
2021-11-22 06:19:00
