Snowy Hydro bulks up in $600m asset spree
Source: SMH, 15 Sep 2014
Snowy Hydro has emerged as the fourth-largest energy utility in the country, with the surprise $600 million purchase of a series of Australian assets from New Zealand-based infrastructure investor Infratil.
The acquisitions will position Snowy Hydro well for any future privatisation decision. Even though an earlier plan to sell off the electricity group was aborted, a recent Productivity Commission report threw its weight behind the privatisation of public assets.
The asset buy comes as the NSW government is preparing to sell its remaining power sector assets.
In addition to operating a hydro-electric scheme, Snowy has two peaking power stations in Victoria, although earlier plans for a similar power station in Sydney were shelved some years ago.
Snowy Hydro has recently been beefing up its presence in the retail market using the Red Energy label and moving into parts of NSW beyond its base in Victoria. Peaking power stations are used for short periods of time to take advantage of any surge in wholesale electricity prices.
The purchase of the Infratil assets gives it additional peaking power stations across South Australia and NSW, including 165 megawatts of capacity at Angaston, Port Stanvac and Lonsdale in SA, as well as a further plant in NSW’s Hunter Valley. The deal also includes a site for a potential gas-fired power station south of Sydney.
Infratil has more than 515,000 customers via its Lumo Energy brand. With Snowy’s customer base of more than 400,000, this makes it a clear leader among the second-tier energy retailers, lagging only industry heavyweights AGL Energy, EnergyAustralia and Origin Energy.
Read more HERE