Sanjeev Gupta eyes renewable expansion, float
British billionaire Sanjeev Gupta will develop a giant pipeline of renewables projects to feed the Whyalla plant.
British billionaire Sanjeev Gupta will develop a giant pipeline of renewables projects to feed its Whyalla plant in South Australia and consider a sharemarket float of its green steel assets after demerging the retail arm of Ross Garnaut’s Zen Energy from its industrial empire.
After buying a majority stake in Zen Energy nearly three years ago as part of a merger deal, Mr Gupta’s GFG Alliance has split the business in two.
GFG has taken full ownership of the renewable power, battery storage and project development side of the business under the Simec Energy Australia banner. Zen will exit the GFG Alliance and retain its retail businesses under the Zen Energy brand with Mr Garnaut a director.
Mr Gupta will now target developing up to 3000 megawatts of renewables in addition to the planned 280MW Cultana solar farm in South Australia, with the entire capacity forecast to be used for a new green hydrogen steel plant at Whyalla produced with clean energy.
“I wanted to focus on generation because my objective is industrialisation rather than developing a retail business,” Mr Gupta, executive chairman of GFG told The Australian from Romania.
“I really want to focus on doing a much bigger 2000-3000MW plant after Cultana to feed hydrogen. All of our energy projects will be part of an industrial transformation to carbon neutrality. We will finish Cultana first and then step on the gas to do the expansion.”
While the move to restructure Simec Zen Energy means a mooted Australian sharemarket listing has been shelved, the industry magnate said he would consider a float of a renewables-backed green steel business.
“The energy business is an upstream asset to the industrial business, so if we were to float, it would be the whole combined group. A hydrogen-driven steel business would be a perfect candidate for a public market issuance.”
GFG’s acquisition of Whyalla in 2017 and Arrium’s iron ore mines makes it one of Australia’s biggest power users. Rather than use its renewable projects like Cultana to sell electricity to large industrial users, Mr Gupta envisages generation will now all be used for GFG’s own purposes.
“The plan has evolved from the initial Simec Zen partnership and we want to do much bigger generation projects that are going to be consumed by us. Our projects will be capital-intensive. Cultana is $500m alone and we are talking about 2000 to 3000MW beyond that. It’s a different ball-game altogether.”
Zen — which counts the South Australian government and University of Adelaide as customers — will now partner with renewables developer Sunshot Energy, which is part owned by Mr Garnaut.
Mr Gupta conceded the existing Whyalla steel operation remained a work in progress but it was moving close to profitability.
“All the businesses in Australia actually do quite well but the one exception is the steelworks in Whyalla. Everything else is doing very well but the steelworks has always been a challenge and remains a challenge,” Mr Gupta said.
“But there is a new team hard at work trying to transform the existing plant. It’s been a loss-making business but it’s really coming to a point where it’s almost at break-even and even potentially showing some signs it will make some returns. So we’ve done a lot of work and made a lot of changes and there’s some more to come. We are focused on the existing plant being sustainable until new green steel plants get built over the next few years.”
GFG expects to push ahead with its green steel model in Europe first.
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