The future of another Australian coal-fired power station, Engie’s Loy Yang B, will be decided in the coming week.
Street Talk understands Alinta Energy owner Chow Tai Fook Enterprises and Delta Electricity tabled final bids for the brown coal power station in Victoria’s LaTrobe Valley.
Brookfield and China Resources were also said to have been in the final round of the Rothschild-run auction, but it is unclear if they lodged binding offers.
Paris-listed utility Engie is the largest shareholder while Japan’s Mitsui & Co has a 30 per cent stake in Loy Yang B.
Delta is owned by interests held by power industry maverick Trevor St Baker.
Sources suggested that a reluctance by many banks to finance coal station bids and posturing by state and federal governments will have weighed on the final offers for Loy Yang B.
Victoria’s $1.3 billion renewable energy tender announced last month will bring on another swathe of wind and solar plants, bidding into the wholesale market at near-zero cost and further undermining the economics of inflexible baseload plant.
The federal government’s push to extend the life of the Liddell coal fired generator also points to lower wholesale prices post 2022 than otherwise would be the case.
That would feed through to bidders’ valuation of Loy Yang B.
The government’s moves has also highlighted the increased risk of intervention in the energy market, made evident by projects including the Snowy 2.0 project, South Australia’s taxpayer-funded gas plant and state-based renewables targets.
Elsewhere in the sector, the sale process for IFM Investors’ gas-fired power stations in Victoria is gearing up.
This column understands indicative bids are due next month.
EnergyAustralia, advised by Morgan Stanley, is up against parties including Alinta Energy.