Whyalla steel owners buy into Zen solar and storage company

Whyalla steel owners buy into Zen solar and storage company

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New owners of Whyalla Steelworks buy majority stake in Ross-Garnaut chaired solar and storage company Zen Energy, saying renewables will underpin the future of large industry – in direct contrast to the push for more coal by the federal government.

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The new owners of the Whyalla Steelworks in South Australia have made good on their commitment to green energy, announcing the purchase of a majority stake in the Ross-Garnaut chaired Zen Energy, an Adelaide company specialising in solar and battery storage.

The deal was announced less than a month after UK billionaire Sanjeev Gupta’s GFG Alliance completed the acquisition of Whyalla, saying it was investment in renewable energy that would make the bankrupt steel-making operation viable again.

RenewEconomy understands that Zen had been in discussions with GFG in the lead-up to the purchase, mostly about the various renewable energy options for the new owner of Australia’s largest integrated steel and mining business, including wind, solar, co-generation and pumped hydro.

Those talks have now resulted in GFG taking a majority stake in Zen and building a strategic alliance led by SIMEC Energy, GFG’s energy unit. The new venture will be called SIMEC Zen.

The alliance has the potential to reshape the debate about renewable energy and its benefits for big business in Australia. Whyalla is not the first major industrial user to turn to renewables to reduce the cost of energy from Australia’s dysfunctional, fossil fuel-dominated grid, and it won’t be the last.

Asked on ABC Radio on Thursday morning if the partnership was based on a “belief” that renewables could power industry, Garnaut responded: “It is not a belief, it is the economic reality.”

(See our interview with Ross Garnaut and his plans for large-scale solar, pumped hydro and battery storage here).

Gupta said on Wednesday the high cost of energy is “debilitating for the economy and a crying shame for a country so rich in resources”, and a step change was needed in the power industry to reduce the cost of dispatchable power.

“Our main focus, as in the UK, will be renewable energy,” he said, adding that the company believed renewable energy would be the basis for a low-carbon industrial future

The commitment by one of the country’s biggest energy users – following the investment in solar by Queensland zinc refiner Sun Metals and telecoms giant Telstra – comes as federal politics attempts to do a u-turn and focus on ageing coal plants rather than new renewables.

Former prime minister Tony Abbott threatened to cross the floor of parliament to vote against the future and any policy that looked to address climate change, however modestly, or encourage new renewable energy.

“You can’t run a steel mill on renewables,” Abbott has said. Yes you can, says Gupta, and he intends to show how, using the combination of wind, solar, pumped hydro, battery storage and co-generation for most of its needs.

The announcement also comes days after Zen made a formal application to the Australian Energy Regulator for a licence to retail electricity to customers using solar and storage and demand management technologies.

Zen has made no secret of its plans to launch a renewable-based retailer, and to service the industrial sector, and it also has plans for large-scale solar plants and large-scale battery storage arrays, despite missing out on a South Australia government tender that was won by Tesla and French company Neoen.

“GFG Alliance has now taken a major step towards realising its Australian energy ambitions,” it said in a statement. “The opportunity to invest in large-scale power projects to meet its own industrial requirements and support the domestic economy was a key driver for GFG’s strategic entry into Australia.”

The venture will also focus on providing “cheaper, more reliable and environmentally sustainable energy” for SIMEC’s mining operations in South Australia and Liberty OneSteel’s operations in South Australia, Victoria, New South Wales, Queensland, and Western Australia.

SIMEC ZEN Energy will also project-manage the development of SIMEC Energy Australia’s new large-scale energy projects, including solar PV, battery storage and pumped hydro facilities.

Garnaut, one of the architects of Labor’s now defunct carbon price, which Abbott repealed after warning that a carbon price would turn Whyalla into a ghost town, said Zen had spent years looking to introduce new solutions to Australia’s energy problems of weak competition, high costs, low reliability and unnecessary pollution.

“We’re happy for the skeptics to watch what we do, and learn what is possible,” Garnaut said in a report on ABC TV.

“We have been looking for the right capital investor and strategic partner to help realise our plans, and have found the perfect match in Sanjeev and the SIMEC Energy team,” he said in an earlier statement.

“Their understanding of the energy dilemma this country faces, which is making much of our industry uncommercial and environmentally unsustainable, means we see the market need and opportunity in the same way.

“We are excited about the future, as this will yield benefits for Australian jobs, investors, communities and the environment.”

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  1. RobertO 3 years ago

    Remember Abbott said” You can not run a Steel Works on Renewable Energy, You can not run a Steel Works on a battery”, and for once he a statement 1/2 right, a battery is a tad too small on it own, I know RE will prove the Mad Monk is mad as a hatter. Him and his two stoges need to be put out to pasture (retired as soon as possible and never given any more time on TV, Radio or by the Press). I hope that the next election gives him the justice he deserves

    • Joe 3 years ago

      Tony 2.0 needs those battery leads plugged into his brain…might just kickstart some sensible talk for a change.

      • solarguy 3 years ago

        Oh goodie, can I flick the switch…… can I …..please.

        • Joe 3 years ago

          Go and give the MAX Voltage !

          • solarguy 3 years ago

            Thank you Master….heee ………heeee

  2. Thucydides 3 years ago

    Business taking charge of its future and showing the way. Will the voters follow, or will we let the kleptocracy and right wing nut jobs mortgage our future by building billions of dollars of coal plant?

  3. BushAxe 3 years ago

    Market changing development, will watch with interest as capital starts pouring into ZEN’s projects and others take notice.

  4. Guy Stewart 3 years ago

    If anyone is looking for the original Tony Abbott quote:

    It is satisfying, though no surprise that large electricity users are looking to acquire the cheapest, most readily available and scaleable electricity sources for themselves.

    The less satisfying part is the longer the government holds out in the face of all market evidence and technological progress, the more fragmented and uneconomic the grid network becomes.
    Like the NBN interference, the investment and regulatory environment that exists now will only serve to decrease our national efficiency and readiness for the future.

    • Joe 3 years ago

      Saw the piece on ABC 7.30 program last night (20/9/17 ). There was the Tony 2.0 and all…NO, NO,NO. And there was Mr Ross and Mr Sanjeev all…YES,YES,YES….and Whyalla Steel plus RE it is going to happen, not just empty talk. How dumbass the Tony 2.0 looks again. Please get the Tony 2.0 at the same desk with Mr Sanjeev and have the talk eyeball to eyeball. None of this Tony 2.0 continually hiding behind a friendly microphone. Why oh way is the Tony 2.0 continually courted to speak his nonsense and rubbish.

      • brucelee 3 years ago

        Why can’t Labour ram home these facts in Parliament?! It’s on a platter for them!??

        • BushAxe 3 years ago

          They’re just lobbing the odd grenade over the fence and sitting back watching the coalition tear itself apart!

      • Aluap 3 years ago

        Why have Tony 2.0 at the same deck? He has created most of our sour political problems for the past decade. He should be retired by his electorate.

        • Ian 3 years ago

          For the scale of his economic and environmental vandalism he gas caused, he should be in jail

          • neroden 3 years ago

            Yes, life imprisonment for Abbott. Unfortunately Australia no longer has the death penalty, not even for treason, genocide, and crimes against humanity.

          • Carl Raymond S 3 years ago

            I despise Neanderthal Abbott, but can’t condone the death sentence – it makes us all Neanderthals. Resettlement of all denialist politicians to a low lying island would suffice.

  5. riley222 3 years ago

    Talk about putting your money where your mouth is.
    Maybe we’ll see a pumped hydro project as part of this project. Could start a trend, and really set Oz on a realistic energy path.

  6. RobertO 3 years ago

    I am old and must have mis heard the Monk (I think it was in Sky News that he said the bit about the Battery) sorry if I have mis lead anyone

  7. solarguy 3 years ago

    And say so all of us!

  8. Robert Comerford 3 years ago

    Can’t see how this can work without pumped hydro or some other form of mass storage so look forward to hearing their plans to achieve that.
    Go Sanjeev and Ross !

    • Guy Stewart 3 years ago

      They aren’t going off grid, just setting themselves up to take advantage of the cheapest electricity on the market, behind the meter solar. They will still be using the grid for a whole host of services.
      This is the issue, without cheap wholesale renewables available to the market due to government created artificial investment risk. The more end user customers just buy their own.

      • neroden 3 years ago

        They aren’t going off grid *yet*. For a big industrial operation, it takes a while.

  9. RobertO 3 years ago

    When you are powering the steel mill remember my NZ mate (barneeeeebe with his $100 roast and stuck in the lift no2 problem) said “we do not care where the electron come from” and now he is joined at the hip with “Mad Monk” about “it must come from COALition coal. At the end of the day it is a simple engineering problem and even simpler engineering solution. Get the pollies out of the road (I wish somebody would run over the RWNJ ) and build RE for the future. Simple mathmatics say too expensive to build new coal (and in about 5 to 7 years it may be too expensive to feed coal power station). Fuel supply for both wind and solar are free and able to be used to pump H2O uphill. We have some 22,000 potential sites and some will be cheaper to build than others (and some will be faster to build than others). Change standard Gravity hydro to Peaking Hydro with additional generator units that can also work as Pump Hydro (Franics Turbines are one type). Snowy 2.0 may be double the current output but I am sure with the engineers designing systems you could double that again. It not that hard to do

    • Mike Shackleton 3 years ago

      This is the problem – where are the scientists and engineers in parliament? (Apart from Malcolm Roberts, who has jettisoned his engineering credibility)

      Without people in parliament to help understand and navigate the technical challenges, how is decent policy to support the solutions going to be formulated?

      • riley222 3 years ago

        There’s plenty of parliamentarians capable of steering Oz through this, trouble is they’re not being given the chance.
        Abbott is a wrecker pure and simple, and maybe the best we can hope for is a stalemate till the next election.

      • Joe 3 years ago

        Hang on …’Aussie Robbo’ a scientist ? There must be a mistake, we need to see that ‘Empirical Data’ or is this another case of ‘Aussie Robbo’ choosing to believe…. whatever .

        • Brian Tehan 3 years ago

          He’s a mining engineer, not a scientist.

          • Joe 3 years ago

            Yes, I have read that he is a mining engineer which is someway short of being a scientist. But I guess that ‘Aussie Robbo’ is free to ‘choose to believe’ …whatever.

        • Peter 3 years ago
      • Peter 3 years ago

        Once upon a time, the Public Service analysed the policy needs and options in their area and were always ready to advise the minister. But, since, various governments have politicised the Public Service and turned it into a Government Service. As a result, there is now little expertise in the service to advise politicians, or else the minister announces policy and then demands support from the service to support their actions. Engineers are less likely to be politicians because not many work by argument as lawyers do.

      • Farmer Dave 3 years ago

        Mike, while I think it would probably help a lot if we had more engineers and scientists in parliament, it should not be necessary. If the government of the day cannot access the best expertise available, then who can? In all technical matters, we expect our political leaders to avail themselves of the best technical advice – and to formulate policy based on that advice. They do it for health, cyber security, military issues, … But they don’t do it for climate change. Why not? Why don’t the media ask the politicians who their expert advisers are whenever they say something about climate change? This is an important point of vulnerability that all who try to limit action on climate change have, but they are not called out on it.

        • Mike Shackleton 3 years ago

          The problem is, Engineers and Scientists speak a language that is prone to misrepresentation by politicians. Just like the “high degree of certainty” with climate change – politicians see that the position is not absolute, and create FUD over the language that is being used.

          I work in Engineering and I’ve seen my advice and others misrepresented time and time again. No regard is given to the limitations of the advice given. People see advice such as, “If you keep on doing what you are doing, it is highly probable you’re going to have a problem xyz, or based on the information I have, I can’t recommend that course of action” as signs that they can do what they want to do because I may be wrong and they will pull off whatever scheme they are trying to pull.

        • nakedChimp 3 years ago

          and adding to Mike’s answer.. the whispering coming from the brown bags filled with money (or jobs before or afterwards) are way more convincing.. so they listen to them and do what those say.

      • Joe 3 years ago

        It’s now official. The High Court has determined that ‘Aussie Robbo’ was in deed also ‘Pommie Robbo’ ( and probably ‘Indian Robbo’ in amongst that as well ) when he was elected as Senator. So the “Empirical Evidence” is IN and ‘Aussie Robbo’ should be OUT next month when The High Court decides its actions. ‘The New Zealander of the Year’ aka Bananabee and ‘Italiano Matteo’ aka Bambino Canavan must be feeling a little unwell at the moment. All this ‘Identity Fraud’ should be vigorously punished.

  10. Rob G 3 years ago

    To accept that Abbott and the government are correct with their assumptions on renewables is to go against all expert opinion, many existing examples, most other countries and general feeling within the Australian community. Another words to go against facts. It certainly is a lonely place for this ignorant and ideologically bound government. And it now appears possible that Abbott is even more out-of-touch than ever before.

    • stucrmnx120fshwf 3 years ago

      So few realize, that a Clean Disruption, is occurring, 1GW solar plant, in the Pilbura desert, with a cable, to Jakarta, giant mining trucks, run on batteries and electric motors, 1/10 th of the maintenance, 1/10 th as much cost to power. Now I know what the sceptics are saying, 25% of Australia’s desert can only provide 1,250 times our annual power usage, a trillion tonnes of liquid hydrogen, that a million million tonnes per year, isn’t enough. That 25 times as much power available, isn’t the roaring twenties, the Third industrial revolution’s, peak decade of industrial revolution.

      Just because solar is cheaper, than carbon dioxide emissions based power, capital markets, shouldn’t move to solar, but I make a counter argument, just do the math. Then the real benefits of no CO2, smog, soot, oxygen as a waste product of high rise agriculture and liquid hydrogen production, in the cities. Air quality will increase, as fast, as water quality, in the last roaring twenties.

  11. RobSa 3 years ago

    South Australia is leading the way. The companies that turn to renewables the quickest will become the most profitable. The states that facilitate this kind of reliable and sustainable energy development will become more and more attractive to investors because of the certainty they provide.

  12. bedlambay 3 years ago

    One engineer I was working with in Whyalla in 1991 said all the dirty emissions occurred at night. Good to see Mr Gupta will clean up the old plant.

  13. Bristolboy 3 years ago

    As mentioned in the article this is following the precedent set in the UK, including such plans as a large-scale wind farm – http://www.cityam.com/271431/gfg-alliance-plots-wind-farm-support-scottish-metals

  14. SomethingSomethingSomething 3 years ago

    And now the holes start appearing in the dam. As high consuming businesses users start reducing their grid usage, with behind-the-meter renewables, the death spiral accelerates, and the gentailers have only themselves to blame. No doubt the profiteering locusts will move on to somewhere else leaving the mess behind for us.

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