Alinta Energy owner Chow Tai Rook Enterprises will buy Loy Yang B Power Station, a year after it was put on the market.
The company did not confirm the purchase price of the station due to commercial in confidence restrictions but it is believed to have sold for as much as $1.1 billion, according to Fairfax Media.
Majority owner ENGIE and 30-per-cent stakeholder Mitsui signalled their intention to sell the 1000-megawatt plant shortly after announcing the closure of Hazelwood last year.
Alinta has a portfolio of natural gas-fired power stations across the country including a 94-megawatt station at Bairnsdale as well as natural gas and distillate-fuelled stations in Western Australia and Queensland plus Glenbrook Power Station in New Zealand.
Alinta Energy executive director of merchant energy Ken Woolley said the company entered into the agreement on Wednesday to become sole owner of the station.
“It has been a competitive [bidding process] but these assets aren’t like homes that can be turned over in a month of two, these things take time,” Mr Woolley said.
“This … is an important asset that comes with a lot of information and a lot of history that needs to be understood and these take time to negotiate.”
The station is the Latrobe Valley’s most modern and supplies about 17 per cent of Victoria’s baseload energy supply and employs more than 150 people in the Latrobe Valley.
CFEMU Mining and Energy Division secretary Geoff Dyke expected the acquisition would have minimal impact on the station’s current staffing levels.
“At this stage the enterprise bargaining agreement has a fixed staffing structure so there can’t be any changes to staffing until that’s renegotiated,” Mr Dyke said.
The current EBA expires in September 2019.
“We will sit down with Alinta and have a chat about how they propose to operate the station in the meantime,” Mr Dyke said.
Latrobe City mayor Darrell White said the sale was a “tremendous vote of confidence” for the Latrobe Valley as the power generation hub of Victoria.
“This investment will see our region’s natural resource, coal, converted into prosperity for our community, for the benefit of every Victorian – including those who wish to campaign against its utilisation,” he said.
“Our hope is that this level of astute investment re-sets the tone for future asset development, particularly a high efficiency, low emissions brown coal power generator here in the Latrobe Valley.”
Alinta was favoured by shareholders over rival China Resources after a third consortium, comprised of NSW-based Delta Electricity and private equity company Apollo Global Management, withdrew from bidding in the final stages.
The company had been in negotiations about the sale for the past six months.
Greens spokesperson for climate change and energy Adam Bandt said “buying a brown coal-fired power station in 2017 makes as much sense as investing in a chain of Blockbuster stores”.
But Mr Woolley rejected Mr Bandt’s claims.
“I wouldn’t want to invest in a chain of Blockbuster stores myself and I don’t think our owners would, but we’re really pleased to be buying an asset that is the newest of the coal-fire power stations here in Victoria.
“[It] has a terrific coal structure and coincidently it’s one of the most reliable assets in the national electricity market, so I feel pretty good about the investment.”
Mr Woolley said Alinta would honour the state government’s Worker Transfer Scheme. Alinta Energy is expected to take ownership of the station early next year.