Kerry Stokes’s Seven Group in pitch for WA pumped hydro scheme
Kerry Stokes’s Seven Group is eyeing a push into renewable energy generation, pitching a $650m pumped hydro scheme to the West Australian government.
Kerry Stokes’s Seven Group is eyeing a push into renewable energy generation, pitching a $650m pumped hydro scheme to the West Australian government.
It is understood the $8bn conglomerate made the offer to Premier Mark McGowan’s government before Christmas, offering to convert a disused coalmine in Collie into a 400-megawatt pumped hydro plant capable of feeding power into the state’s energy grid.
The proposal is understood to offer a rehabilitation path for the coalmine, with the power produced to be used to firm renewable energy supplies produced elsewhere in the grid as nearby coal-fired power plants are retired.
The plan is at an early stage and Seven Group is not believed to have received a formal response yet from the WA government.
But the offer represents Seven Group’s first major push into renewable energy, with the company better known in recent years for its interest in gas. Seven Group has built up a 30 per cent stake in Beach Energy and owns a suite of its own gas projects, including a 15 per cent stake in Shell’s Crux field off WA’s North West Shelf and ownership of the Longtom gas and condensate field in Bass Strait.
It also suggests Mr Stokes sees some of the same opportunity in renewable energy as fellow WA resources billionaire Andrew Forrest — albeit on a smaller scale than the ambitious plan outlined by the Fortescue Metals Group chairman to turn the iron ore miner into a renewables giant capable of eventually producing 235 gigawatts of energy at sites across the globe.
The Seven Group offer comes as the WA government looks for options for new industries in Collie, 200km south of Perth, as its coal industry winds down. The coal district at Collie is relatively small, with two mining companies supporting coal-fired power stations capable of producing 1.6GW of electricity a year.
But the rapid rise of solar and wind power has been pushing coal out of the WA grid, with a state government report late last year suggesting half of the remaining coal-fired stations could leave the grid within the next five years.
Up to 80 per cent of the power provided into the South West Interconnected System could be provided by renewable energy within 20 years, the report says.
The state government has flagged the closure of two of the remaining four units at the Muja power station by 2024, with only the two most modern generators — the Collie Power Station, opened in 1999 and privately owned Bluewaters, commissioned in 2009 — to remain operating. This will put the remaining coalmines, already struggling under the weight of rising costs and low prices, under further pressure.
Griffin Coal, which operated the mine Seven Group is proposing to use in the hydro plan, has been controlled by its bankers since its parent company was placed into administration in 2017.
WA’s only other working coal mine is also in Collie and is operated by China-backed Yancoal.
Faced with the loss of a major industry in Collie, the state government has promised $80m to fund work on a path to a “just transition” for the region.
In January last year Seven Group subsidiary Westrac won $2.8m from the state government to help fund a centre in Collie to train technicians and operators in the use of autonomous trucks and other equipment in the state’s mining industry.
Seven Group declined to comment on the pumped hydro proposal on Monday. Shares in the company closed up 34c to $23.79.
More Coverage
