OPINION: Brookfield showed the way, now the local investment giant has followed. Both show there is value in owning an electricity provider with a big customer base.
If you want to be a big renewables developer and make big money from Australia’s energy transition, the easiest and safest way to do it is by also owning a big customer base.
EnergyAustralia uses power from its Yallourn station to match demand from its 1.6 million customers in the eastern states.That penny has dropped at Brookfield, one of the biggest renewables investors globally, and now Macquarie. One is going after Origin Energy, while the other is thinking about a significant stake in EnergyAustralia.
In the case of AGL and Origin, the two listed players, investors sold stock as they fretted about carbon emissions and capital requirements. Outages at plants and the cost of coal smashed earnings, hurting their share prices, and their boards considered restructuring or reshaping their corporate models to paper over the cracks.
Attention has now turned to EnergyAustralia, owned by Hong Kong’s CLPP Group, which has had bankers talking to potential investors for a few years. It has attracted interest from Australia’s Macquarie asWhile there’s plenty of water to go under the bridge as far as Macquarie and EnergyAustralia are concerned, it is big news that the bank is thinking about an investment.
While there’s debate about which one among Origin, AGL and EnergyAustralia is most attractive and best positioned for an incoming investor such as Brookfield or Macquarie, the fact that all are or have been in play shows just how much the conversation around Australia’s energy transition has changed.If you are going to be a dominant renewables play, it makes it easier if you have a big customer book.
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