UPDATED: British billionaire Sanjeev Gupta’s South Australian interests show no sign of slowing with programs ranging from renewable energy for his company SIMEC’S mining and Liberty OneSteel’s operations, huge solar farms, pumped hydro to low cost solar for social housing tenants and the state government’s home battery scheme.
Two of these projects are expected to help swell the population of Whyalla from 22,000 to 80,000 in the next 10 to 20 years.
Now he’s turning his eyes to other states.
Gupta’s Australian clean energy company SIMEC Energy Australia, the Australian arm of GFG Alliance, currently employs around 100 people and is expanding rapidly, and according to senior business development lead Richard Turner, there’s been around a 100 per cent increase in employment in the past 12 months.
He says there’s around 40 staff working at the home base in SA, with the remainder split between Melbourne and its smallest office in Sydney.
“We’ve done well in South Australia and the focus now is on Victoria and Queensland,” Turner told The Fifth Estate.
NSW will come further down the track because it doesn’t have any generation there at present, he says.
Turner says the plan is to get “a whole portfolio of generation” happening in these states, including large solar farms, big batteries, pumped hydro, and eventually wind farms.
Although the renewables industry has seen “many ups and downs”, the company wanted to bring competition to the market by transitioning to a generator and retailer, as well as a large consumer of energy.
Turner says this business structure has the potential to bring Australia’s exorbitant energy prices down because “for the first time you have a generator for its own needs, and sharing with the rest of us.”
How it all started
The company started life in 2004 in Richard Turner’s backyard when he was trying to fit out his kids’ cubby house with solar.
From humble beginnings as a small solar outfit in Adelaide, ZEN Energy attracted the attention of Raymond Spencer who bolstered the company’s battery and storage expertise when he bought into the company.
This was solid footing to turn the company into a leader in battery and storage technology, according to Turner.
The company has since morphed into a fully-fledged generator and retailer of low-cost renewable energy for big energy users, including the South Australian government, and is now majority-owned by Sanjeev Gupta’s GFG Alliance.
ZEN Energy is now the household and commercial solar energy and energy storage solution arm of SIMEC Energy Australia, which it was renamed to align with the GFG Alliance’s global branding.
The company is delivering cheaper renewable 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.
Growth driven by a swag of big projects
The company has a lot on its plate for 2019.
It’s recently partnered with social housing provider Junction Australia to deliver solar to SA social housing communities using a new business model underpinned by a long-term finance plan – an initiative that recently won the company a Premier’s Award.
“One of the groups that gets left out of the solar story is renters and the social housing market, so the most disadvantaged among us miss out on energy behind the metre such as solar and potentially batteries.”
Turner says this new model is possible thanks to two changes in the market. The first is that the cost of solar has come down, with the pay back now two-to-three years for residential. There’s also been more long term and low cost finance introduced into the market, as well as subsidised finance such as the South Australian Home Battery Scheme.
Through long term, low cost loans for solar installations, tenants are able to pay back the solar system cost through “a few dollars extra” on rent. The tenant ends up pocketing the difference because the energy savings far outweigh the small amount of additional rent, and can still be up to 30 per cent or more.
Turner says this is a “triple bottom line win” because owners get an improved asset at no cost and tenants end up with lower electricity bills.
He says the long term long cost finance model is new to the market but expects others to follow its lead.
Rooftop solar systems keep getting bigger
Because solar is getting cheaper, Turner says there’s been more commercial uptake in solar and storage.
He also says solar systems “keep getting bigger and bigger”.
The company is the primary provider for SA’s Home Battery Scheme, which offers eligible households up to $6000 on the cost of a battery and low interest finance available if needed.
Turner hopes this subsidy will help do to household batteries what feed in tariffs and subsidies did to make rooftop solar so cheap.
“It always needs a helping hand to get scale and this will happen to batteries.”
Despite these types of incentives becoming more common, Turner says household batteries are still in the early adopter stage and even with the subsidy it takes around ten years to payback the system.
But when you put solar and storage together, the payback period averages out to a more reasonable seven years.
Large scale renewables also on the agenda
On the grid scale, the company is working on big projects such as the 280 MW Cultana solar farm – the size of 550 Adelaide ovals – which should be completed by the third quarter of next year.
There’s also the mammoth battery going in at Port Augusta to support the new solar farm being built at the Whyalla steelworks. The battery will be 100MW but can peak up to 120MW of battery storage.
He says these two huge projects are starting soon and will bring great economic growth in SA and long term sustainable jobs to the region.
The town of Whyalla is expected to grow from 22,000 to 80,000 in the next 10 to 20 years due to upgrade to its steelworks and other infrastructure projects.
The company will also manage the conversion of the Iron Duchess North mine pit, in the South Middleback Ranges of South Australia, into pumped hydro energy storage.
Turner says old iron ore mines are ideal perfect for pumped hydro because there’s already a “manmade mountain” there for the water to be pumped uphill at times of low electricity demand (when power is cheap and abundant).
Water is then run back downhill to drive turbines during periods when demand is high or when supply is low due to lack of wind or sun.