Gupta’s GFG Alliance splits SIMEC Energy from ZEN Energy to boost renewable projects and retail
Billionaire Sanjeev Gupta will split off his retail renewable power business so it can concentrate on cheaper power for Adelaide households.
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Billionaire Sanjeev Gupta will focus his renewable energy interests on Whyalla steelworks projects, freeing up the retail side to split off and concentrate on providing cheaper power to consumers.
Adelaide businessman Raymond Spencer and leading economist Ross Garnaut have taken ownership of the retail business, ZEN Energy.
“We are committed to increasing competition in Australia’s energy market,” Prof Garnaut said.
Port Adelaide Football Club sponsor Mr Gupta said separating his business from ZEN Energy would allow each to focus on their strategies and attract investors.
“ZEN Energy was one of my first investments here in Australia in 2017 when we acquired a majority shareholding,” Mr Gupta said.
“I was drawn to the company as Ross and his team shared the same passion for renewable energy and the transformative effect it can have on homes, businesses and governments.
“South Australia is uniquely positioned to lead Australia through the inevitable transition to renewables so I am confident both SIMEC Energy Australia (owned by Mr Gupta’s GFG Alliance) and ZEN Energy have a very bright future.”
Mr Spencer said the demerger was a mutual decision not a buyout with the two arms of the business – project development and retail – having different strategies.
“They have different capital and management requirements,” he said.
“We’ll keep working together.
“The new structure will allow ZEN Energy to accelerate its growth strategy and it will increase competition in the local market and lower costs through the increased use of renewable energy.”
ZEN supplies all of the State Government’s electricity, a group of customers through the SA Chamber of Mines and Energy as well as Adelaide University, Bickford’s, Electrolux and LifeCare.
Mr Spencer said ZEN aimed to sign up more commercial customers and, while not yet ready to announce a plan “would not rule out” expanding to the residential sector.
ZEN, established in Adelaide in 2004, is a major supplier of solar rooftop and battery systems to households and businesses.
Last year, Prof Garnaut and Mr Spencer founded a company called Sunshot Energy which buys power from wind and solar generators and sells electricity and financial products.
It will now retail through ZEN with ZEN chief executive Geoff Titus to be based in Adelaide.
Mr Gupta plans to invest about $1bn in renewable energy projects, including the Cultana solar farm at Whyalla where construction is due to begin in coming months and the grid-scale Playford battery at Port Augusta which has development approval.
Mr Gupta has bought ageing metal manufacturing plants around the globe in the belief steel and aluminium demand will grow even as the world demands lower carbon emissions.
“The plants need investment, and we’re going to make investments for technologies that go toward the future rather than the past,” he said.
“Our ambition is to be carbon neutral – all our steel production, all our aluminium production will be green in short order, supported by our renewable energy business.”
GFG Alliance is building a new arc furnace and a iron reduction facility at Whyalla.
The Cultana farm will provide power and produce hydrogen to reduce ore to iron.
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