Billionaire Trevor St Baker sells Vales Point coal power station to Sev.en Global Investments
Billionaire Trevor St Baker and his business partner Brian Flannery have sold NSW’s Vales Point coal power station seven years after buying it for $1m from the state government.
Billionaire Trevor St Baker and his business partner Brian Flannery have sold NSW’s Vales Point coal power station for more than $200m to Czech company Sev.en Global Investments in a deal that could see the plant remain open beyond its planned closure date of 2029.
The two executives bought the 1320MW power station on Lake Macquarie for $1m from the NSW government in 2015. It was revalued at $722m just three years later and finally sold for more than $200m over the weekend, sources said.
It adds to a windfall for the business duo who have collected more than $130m in dividends in the past three years leading up to 2022 even as the plant has been among coal stations under pressure amid volatile prices and competition from solar generation.
Mr St Baker said he expects the new owners will extend the life of the coal station into the next decade giving a looming crunch in the electricity market with warnings of an escalating risk of blackouts amid coal plant closures, transmission delays along with rising demand.
“I’m sure they will extend. It will be needed because 24/7 power is a scarce resource these days in Australia,” Mr St Baker told The Australian. “If we shut down coal fired power stations too soon, we will have an economic disaster on our hands.”
The billionaire — who also made $170m after ERM Power was sold to Shell in 2019 — plans to pump profits from Vales Point into Brisbane electric vehicle charging innovators Tritium, where he is a major shareholder, along with fast charging station business Evie Networks.
Vales Point provides 4 per cent of power in the national electricity market and 11 per cent of the state’s electricity while coal accounts for up to 60 per cent of supply in Australia’s grid. More than 60 per cent of the current coal fleet is expected to shut down by 2030 according to official forecasts, stoking concerns whether replacement generation will be built in time to fill a potential gap.
The Czech buyers are already well established in Queensland through their half stake in InterGen, which owns part of the Callide and Milmerran coal plants in the state. Sev.en also owns one of the largest coal producers in the US, Blackhawk Mining, and runs two coal generators in the Czech Republic.
The Australian business pair have been in talks for several years about a corporate deal, with Mr St Baker holding pre-emptive rights to buy the stake from his partner and historically looking to seal total control for himself rather than sell to a third-party investor.
A plan was unveiled in 2018 to extend the life of Vales Point by a further 20 years by Mr St Baker but Mr Flannery was cool on the idea, despite the plan being refloated in February 2022 after rival Origin Energy decided to bring forward the closure of its nearby Eraring coal plant.
Mr St Baker, with investments in both coal generation and green start-ups, has for years called for coal plants to remain in the grid for decades to come to help stabilise the system through a fast-moving transition to renewables.
The Queensland business veteran in June branded fellow billionaire Mike Cannon-Brookes a “software nerd” without the energy experience to reshape AGL Energy following the high-profile defeat of its demerger plan.
“We continue to have a firm view that around the clock dispatchable generation will be necessary for the national electricity market well into the future,” Mr St Baker said on Sunday. We “have positioned the business to continue essential operations through the energy transition, but recognise that there are opportunities to grow the business and that this can be better accomplished in a portfolio with Sev.en’s other base-load capable generation interests.”
Sev.en said it had a long-term commitment to the sector as part of the investment.
“With this acquisition we will significantly strengthen our presence in Australia. Sev.en Group is a global experienced and responsible operator of conventional power plants. We make strategic investments with long-term commitment,” Sev.en chief executive Alan Svoboda said.
Queensland’s Callide coal plant, owned by InterGen and CS Energy, in May 2021 suffered a series of explosions that caused a fire that cut power to half a million homes and businesses. The unit remains out of action over a year later.
Vales Point is also under the spotlight after the NSW Environment Protection Authority inspected the coal plant site on September 13 as part of an investigation over fish kills in neighbouring Lake Macquarie.
The EPA said Delta Electricity, operator of Vales Point, had provided new information over the issue.
“The EPA is treating this as a top priority and is using all available resources, including assigning specialist investigators to the issue,” the state’s environmental regulator said.
Vales Point does not come with any clean-up liability, which was part of the deal reached with the NSW state government when the owners acquired it. The agreement stipulated that once it was closed the asset would be returned to the state government, which would remediate the land and return it to state housing.
RBC brokered the deal for Mr St Baker and Mr Flannery’s Sunset Power. Delta said various government approvals and consents should be received in the next few weeks.
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