Australia’s biggest energy producer AGL Energy Ltd (AGL.AX) said on Wednesday Hong Kong-owned rival Alinta Energy has expressed interest in buying its coal-fired Liddell Power Station, which is slated to be closed.
AGL wants to shutter the plant in 2022 as part of a phased exit from coal by 2050 so it can become a purely renewable energy supplier. But the firm has come under pressure from Australia’s government to sell the power station instead.
AGL said it received “an approach from Alinta last night expressing an interest in entering negotiations” to buy the plant, but that no formal bid had been made.
A formal offer “would be given consideration in order to meet our obligations to customers and shareholders,” AGL said in an emailed statement.
Australia’s electricity supply business has become a hot political issue in the past year, after a string of blackouts and price spikes hit households and major industrial users including miners BHP (BLT.L) (BHP.AX) and Rio Tinto (RIO.L) (RIO.AX).
That has prompted the country’s conservative government to scrap some subsidies for renewable projects. This week a breakaway group of lawmakers called for the government to provide more financial support for new coal-fired plants.
Alinta’s Managing Director Jeff Dimery said in a radio interview on Wednesday that the government had asked his company, which is owned by Hong Kong’s Chow Tai Fook Enterprises Ltd, to consider buying Liddell.
“We stated that we had no objection to owning critical assets required for stability and reliability in the marketplace as we transition to a low-carbon economy,” Dimery told Australian Broadcasting Corp radio.
“We conducted some preliminary analysis that led us to an opinion that, at a commercial rate, there’s an opportunity here,” he added.
AGL previously rejected the idea of selling the plant because it needs Liddell, located north of Sydney, to maintain supplies to its own customers ahead of the original 2022 closure plan.
“AGL is relying on Liddell to generate power for our customers until 2022 and we will require its infrastructure for our replacement plans into the future,” it said on Wednesday.
Source: Reuters.com