After 12 months on the market an announcement about the sale of Loy Yang B Power Station is imminent and could be made as soon as this week.
While it is not confirmed, The Express understands Alinta Energy, an Australian generation, electricity and gas retailing company owned by Hong Kong-based Chow Tai Fook Enterprises, is the frontrunner to purchase the Latrobe Valley’s newest brown coal-fired power station.
Current owner ENGIE announced on November 3 last year it had put the station on the market, the same day it announced it would close Hazelwood Power Station in March this year.
During a visit to the Latrobe Valley to announce the closure, ENGIE in Australia chief executive Alex Keisser said the company was attempting to reduce its operation in carbon plants.
He said the station’s estimated 200 workers would retain their jobs during the sale period.
Alinta Energy has a portfolio of natural gas-fired power stations across the country including a 94-megawatt station at Bairnsdale as well as five natural gas and distillate-fuelled stations in Western Australia and Queensland and Glenbrook Power Station in Auckland, New Zealand.
Fairfax Media reported last week Alinta was favoured among shareholders than its rival China Resources after a third consortium, comprised of NSW-based Delta Electricity and private equity company Apollo Global Management, withdrew from bidding.
ENGIE is the largest shareholder of Loy Yang B, with Japan’s Mitsui holding a 30 per cent stake.
Committee for Gippsland chief executive Mary Aldred described the imminent sale as an “accolade” for the Latrobe Valley.
Ms Aldred said despite some grand standing in recent times, she was pleased to see significant international interest in a Latrobe Valley asset in Loy Yang B Power Station.
“There is a genuine commercial interest in coal and that’s been proven by the quite large number of interested parties,” Ms Aldred said.
“It’s one of the newest [power stations], it’s got a good life span ahead of it and has access to plenty of resources.
“It’s a good asset for the region and it’s very good for Gippsland when we have this level of commercial interest actively wanting to invest in the region.”
Ms Aldred said the committee would support a conversation around a new base load power station in the Latrobe Valley with the prospective owner.
“[This] is an important aspect for our region and it aids a more broader conversation we’re having about future uses of brown coal and replacement energy generation through using the latest technology available,” she said.
“The closure of Hazelwood [Power Station] and the tightening of the energy market has really opened an opportunity to this discussion.
“While they’re’ two separate things in terms of the sale of Loy Yang B and a potential new power station, I think the important point of this is the level of commercial interest in buying Loy Yang B [which] is a clear signal of broader investor interest in coal-fired energy generation.”
Alinta Energy has previously operated the North and Playford power stations in South Australia.
CFMEU mining and energy division Victorian secretary Geoff Dyke a transfer of ownership would not affect the station’s current enterprise bargaining agreement which expires in September 2019.
“Obviously a new owner coming in may have a different way of doing things but we’re hopeful that a new owner wants to invest in the Latrobe Valley,” Mr Dyke said.
“We would like to see a high efficiency low commission brown coal power built in the Latrobe Valley to replace aging base load power stations like Yallourn and also Liddell in New South Wales.”
Mr Dyke said the CFMEU would seek to build rapport with Loy Yang B’s new owner.