New Delta Group CEO hints Vales Point coal station safe amid slow transition

The group taps Richard Wrightson as its new boss, dampening speculation that Vales Point could be the next coal power station to close.

The Vales Point coal power station remains a reliable and much-needed component of Australia’s electricity grid, the newly appointed chief executive of Delta Group has said – dampening speculation that the 1300 megawatt facility in NSW could be the next fossil fuel asset to be retired.

Delta Group on Tuesday said it has appointed former AGL Energy executive Richard Wrightson as the company’s new CEO, succeeding Greg Everett.

The company is composed of Delta Electricity, which owns the power station, and coal miner Delta Coal.

The appointment had stoked speculation about the future of Vales Point, but Mr Wrightson said early indications continue to support the company’s proposed closure date of 2029, but said there would be consistent evaluations.

“When you look at assets like Vales, there are two things that drive closures – economics, will it still have a role in the marketplace at the time? And physical capabilities – is it safe to operate,” Mr Wrightson told The Australian.

“You have to look at both those things constantly. But from my perspective, if you look at the market – what is happening with Snowy 2.0 and the slow build out of transmission – there is a demand for safe, reliable and affordable supply.”

Mr Wrightson said that while he had yet to begin his new job, Vales Point also satisfied the reliability question.

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

The future of coal in Australia is contentious.

Australia expects nearly all of its coal power stations to be closed in little more than a decade, amid mounting economic pressure from renewables and social push to curtail emissions. But there are rising concerns about whether Australia has sufficient generation capacity to allow coal closures to occur so rapidly.

The appointment of Mr Wrightson hints the owner of Delta Group is doubling down on its strategy in Australia.

Billionaire Trevor St Baker and his business partner Brian Flannery sold NSW’s Vales Point coal power station for more than $200m in September 2022 to Czech company Sev.en Global Investments in a deal that could see the plant remain open beyond its planned closure date of 2029.

Czech company Sev.en Global Investments, which owns Delta Group and is one of Europe’s largest private power generators, has positioned the company to capitalise its view that Australia’s energy transition will occur more slowly than many expect.

Mr Wrightson said Sev.en Global Investments continues to be keen on growth in Australia but cautioned the energy market in Australia is complicated.

“Sev.en is very, very interested in growing the portfolio in Australia. But what is that opportunity space? I’ve been involved in many acquisitions, investment opportunities and energy is a really hard thing to make a business case from because it’s so uncertain, and it’s actually trying to work out what assets make sense and where you think he can make money out is difficult,” said Mr Wrightson.

Mr Wrightson joins from Lochard Energy, which owns the Iona underground gas storage plant in Victoria. He previously worked at AGL Energy.

Mr Wrightson will start his new role on August 21.

His appointment comes as Australia’s energy market continues to debate the need for Origin Energy’s Eraring coal power station to stay open.

Eraring is Australia’s largest coal power station, accounting for about 25 per cent of the energy needs of NSW. It is due to close in 2025, but the market is very concerned that Australia does not have sufficient renewable energy generation capacity to compensate for the loss of Eraring.

Insufficient capacity would increase wholesale prices and increase the risk of blackouts. The NSW state government has said it will move to ensure sufficient capacity, stoking expectations that it could seek a so-called closure contract where Brookfield - which is looking to acquire Origin - is paid to keep the power station open.

Deferring the closure would jeopardise Australia’s renewable energy target - a key pillar of Canberra’s plan to be net zero by 2050.