South Australia’s mining lobby has signed up with a renewable energy company to supply power for a consortium of its members, in a deal that it says will save them between 20 to 50 per cent on their power bills.
As the state struggles to deal with the highest power prices in the nation, the South Australian Chamber of Mines and Energy (SACOME) sought permission from the ACCC to allow some of the state’s biggest energy users to band together to get a better deal.
It has been announced the man who will supply the power is Sanjeev Gupta, the British billionaire credited with saving Whyalla by buying and promising to ramp up production at the city’s financially troubled steelworks.
Since then, he has bought renewable energy company Zen Energy, renaming it SIMEC Zen Energy, and announced plans to build significant solar, pumped hydro and battery storage facilities in South Australia.
SIMEC Zen Energy’s Richard Turner says the consortium deal is the next step in the company’s ambition to become a significant energy generator and retailer.
“We’ve already announced massive renewable generation that we’re building for our own purposes, for our own heavy industries around the country and now this presents the opportunity for us to be able to build out excess generation, new generation, to supply the next tier of industrial users and commercial users so it’s a very exciting day for us,” he said.
SACOME’s original consortium had 22 members, but so far only five have signed up to the eight-year deal, and only one, Hillgrove Resources, is a mining company.
The others include local supermarket chain Foodland, agricultural companies Viterra and the Central Irrigation Trust and chemical manufacturer Adchem.
CEO Rebecca Knol says companies signed up as SACOME members to get in on the deal.
“This has been a very long process, a very complex commercial negotiation. We’re delighted to have an outcome. It’s taken many twists and turns,” Ms Knol said.
She said the door is still open to other SACOME members to sign up to the deal.
The contract will begin in 2019, and with SIMEC Zen Energy’s projects still under construction, the company will also contract and underwrite other projects to fulfil the deal.
But the company says all energy will come from renewable sources.