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Renewable energy surge to kick off deal activity


Source: SMH, 19 Nov 2015

The wave of renewable electricity generation capacity to hit Australia over the next few years will result in more mergers and acquisitions as existing large generators such as AGL and Origin Energy protect their market position.

The federal government's renewable energy target could see as much as 5000 megawatts of additional wind power developed, global EY partner and energy adviser Matt Rennie said.

"Given we don't need more generation capacity, the implication for existing generators is they will need to be more competitive," Mr Rennie said. "There will be a lot of transactional activity around that."

The sale of the bulk of the NSW government's power distribution assets over the next year will boost deal activity in the power utility sector. The TransGrid sale is due to be concluded by the end of the year, followed by the Ausgrid network. A host of groups from China's State Grid to consortia that include Macquarie and Hastings funds are involved in the bidding.

"As well, we will see more wind sector activity - the execution of shovel-ready projects along with generator [acquisition] activity," Mr Rennie said.

The other driver for reorganisation is the disruption anticipated from the combination of rooftop solar photovoltaic (PV) systems and storage batteries, which could reduce both electricity demand and the use of the "poles and wires" electricity network.

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