Solar energy company Zen Energy launched a program this month to add 1 gigawatts of renewable generation for industrial users in South Australia. The plan includes several solar and battery projects aimed at reducing electricity costs for steelworks.
London-based international industrial, energy, natural resources, and financial services group GFG Alliance, headed by British billionaire Sanjeev Gupta, bought a 50.1% stake in Zen Energy last September, the Guardian reported. Zen Energy’s board approved the plan to establish 1 gigawatt of renewable generation assets on November 2.
The plan, which the Guardian called the country’s largest solar and power storage investment, is aimed at providing additional renewable energy to major industries on the Eyre peninsula in South Australia. Whyalla, one of the most populous cities in South Australia, is located on the peninsula’s northeast side and is the site of Liberty OneSteel steelworks, owned by Gupta.
Projects at the Ready
According to the Zen Energy’s announcement, the board endorsed projects ready for early development that include:
- 200 megawatts of solar PV, comprising 80 megawatts in the Whyalla Council industrial area, expanded by 120 megawatts on adjacent land owned by Liberty OneSteel
- A 100-megawatt / 100 megawatt-hour battery at Port Augusta
- 100 megawatts of demand response at the Whyalla Steelworks and other South Australia sites
- 120 megawatts / 600 megawatt-hours pumped hydro storage facility at a disused iron ore mine pit in the Middleback Ranges
In addition, the company is planning to install an additional 480 megawatts of solar capacity in the future intended to support the expansion of industrial capacity in Whyalla and industrial loads in other parts of South Australia.
“These first steps in [South Australia] will improve reliability and greatly reduce costs of electricity in our own steelworks at Whyalla, and provide competitive sources of power for other industrial and commercial users,” Gupta stated in a press release about the 1 GW plan. “This will be followed by early steps to lower Liberty OneSteel’s electricity costs in [New South Wales] and Victoria, and to provide power at lower cost to other industrial enterprises in these states and Queensland.”
A massive storm in September 2016 caused a state-wide blackout in South Australia that damaged critical infrastructure. Weather-related blackouts ensued. Electricity costs have soared nationally in Australia for businesses, stemming in part from hot weather and the closure of a large coal-fueled power station.
The issue of energy costs in Australia is controversial and highly politicized. New York Times op-ed contributor Waleed Aly called climate change in Australia “a political graveyard” where three previous prime ministers had their tenures buried. “A series of scare campaigns and political backflips has meant no form of carbon pricing has taken hold, and even emissions intensity schemes and clean energy targets have been rejected. As a result, Australia’s power grid is stretched thin, consumer energy prices are exorbitant and carbon emissions are rising,” he wrote.
Earlier this year, Australia’s chief scientist recommended the government adopt a clean energy plan that would have required companies to provide a percentage of their energy from renewable, low-emissions sources like wind and solar, Deutsche Welle reported. Instead, Australian Prime Minister Malcolm Turnbull introduced an energy plan in October that only requires energy providers have a minimum amount of power at the ready — “dispatchable” energy — from sources like coal, gas, hydro, and batteries.
“The reliable energy quota is deliberately agnostic on the sources of energy, thereby making it a blank political canvas,” Aly wrote in the New York Times. “[W]hat he has offered is not so much a policy as a framework for what might become a policy.”
Gupta acknowledged uncertainty with the country’s electricity policy and said in the Zen Energy press release that he’s monitoring it closely. “I believe there is a great future for energy-intensive industries in Australia,” he said.