Spanish push for a bigger slice of Australia’s power pie

Spanish power giant Iberdrola may use an $840m takeover of Infigen Energy to launch an assault on the national electricity market.

Wind turbines at Infigen’s Woodlawn Wind Farm.

Spanish power giant Iberdrola may use an $840m takeover of Infigen Energy to launch an assault on the national electricity market with plans to grab greater market share after identifying Australia as a major market.

Iberdrola’s bid was recommended by Infigen’s board on June 17 after the two companies held talks over the last year, spoiling an existing $777m offer from UAC Energy lobbed on June 3.

The Spanish-listed utility, the largest wind power producer in the world, said it would look to replicate its global integrated strategy in Australia, suggesting it may target a bigger chunk of the electricity market should its Infigen deal be successful.

“We describe ourselves as the utility of the future and think we have a lot to offer in terms of the model we have developed,” an Iberdrola spokesman said. “Iberdrola is an integrated utility, and if we are successful we will assess the Infigen business and its growth opportunities.”

The addition of Iberdrola to Australia’s electricity market signals a new wave of European utilities looking to muscle in on the turf of Australia’s big three integrated generator retailers — AGL Energy, Origin Energy and EnergyAustralia.

French energy giant Total revealed plans in May to supply electricity to large industrial customers, while Australia has been identified as one of six target markets where Shell will look to create a fully integrated electricity supply business.

Iberdrola signed up in January to a 320MW, $500m wind and solar development in South Australia’s Port Augusta, marking its first major project into Australia, as part of a global plan to invest €10bn ($16.3bn) annually to boost its 55GW generation base.

The Spanish firm, which will release its Infigen bidder’s statement this week, said it expected to have a 1GW development pipeline in Australia if it gains control of Infigen, which has seven wind farms in Australia.

“We’d be looking at a development pipeline in excess of 1GW with a commitment to accelerate our investment in that platform. In terms of technology, we are technology agnostic — we put the right project in the right place, whether that is solar, wind, hydro or storage,” Iberdrola said.

“The global trend of a decarbonising energy sector is irreversible and we are playing a leading role in it. We can make a contribution to that in Australia as well.’’