South Australia based Zen Energy has obtained its electricity retailer licence that it will allow it offer what it has described as a “baseload renewable energy” product to big energy users, as well as proceed with the massive 1GW solar and storage facility at the Whyalla Steelworks.
Zen is now majority owned by the new owners of the Whyalla Steelworks, Liberty OneSteel, and will be used as the vehicle to push ahead with the bold plans to install 1GW of solar, pumped hydro and battery storage that it expects will slash the costs of power to the facility by around 40 per cent.
The retail licence will also allow what is now known as SIMEC Zen to sign up other business users, who will be key to the second stage of the project, which will involve some 480MW of large scale solar.
Zen’s emergence as a potential major player – with strong financial backing and investments in large scale renewables and storage – mean that business customers will likely get easier options to source renewable power.
Newcrest this week revealed it had abandoned – at least for the next 5 years – plans to build a major solar farm to help power its Cadia gold mine in NSW, because it was given a small reduction in the cost of coal power by EnergyAustralia.
Industry observers say it highlights the difficulty in signing a contract for a renewable energy source and then seeking to make up the difference with conventional power. Zen Energy hopes its storage facilities will enable it to circumvent that problem.
Zen’s retail licence is for all states in the National Electricity market except Victoria, which means it can take its product to big energy users in those states, including NSW, where it intends to use renewables to power the bulk of its needs for its electric arc furnaces.
In its licence application, Zen Energy said it concentrate only on the business market, targeting users with demand of more than 160MWh per annum.
It applied for the retail electricity licence a day before the purchase of a majority stake by Sanjeev Gupta’s GFG Alliance was announced.
It said following the announcement that SIMEC ZEN Energy would project-manage the development of new large-scale energy projects, including solar PV, battery storage and pumped hydro facilities.
Ross Garnaut, the former chairman of Zen Energy and now a minority shareholder, said in Septeber that Zen had spent years looking to introduce new solutions to Australia’s energy problems of weak competition, high costs, low reliability and unnecessary pollution.
“We’re happy for the skeptics to watch what we do, and learn what is possible,” he said in an interview on ABC TV.
Giles Parkinson is founder and editor of One Step Off The Grid, and also edits and founded Renew Economy and The Driven. He has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.
