Exclusive: Company owned by coal barons says ‘some sort of cash injection’ may be needed to make purchase viable

This article is more than 3 years old

This article is more than 3 years old

Delta Electricity, a company headed by the coal barons Trevor St Baker and Brian Flannery, has expressed an early interest in purchasing the Liddell power station.

But Delta’s company secretary, Steve Gurney, has told Guardian Australia it is currently unclear whether the purchase is viable without “some sort of cash injection”.

“Would we be interested? I think our position is ‘Yeah, we’d have a look at it’ but that’s as far as we would go at the moment,” Gurney said. “It’s very, very early days. We’re looking at other things as well, so it might be at the end of the day that our money is better put into other projects we’re working on.”

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St Baker and Flannery have previously bought struggling coal stations for low prices, in an attempt to turn them around. In 2015, the pair bought Vales Point, one of New South Wales’s largest coal-fired power stations, for the sum of $1m.

Gurney said Delta had been in conversations with the federal government but those discussions were more general in nature, concerning long-term energy supply in Australia. He could not categorically say whether or not Liddell had been discussed.

“There is interest at the moment but we are a long way from saying we are definitely interested … there would be a whole due diligence process just to understand the issues,” he said.

Delta later issued a statement saying it had not been approached by the government over Liddell but was interested in a due diligence process to consider the purchase.

Political Alert (@political_alert) Delta Electricity says at this stage it has not been approached regarding acquisition of the Liddell Power Station #auspol pic.twitter.com/Z1LxF23gPh

The government is attempting to negotiate with owner AGL to extend the life of Liddell, Australia’s oldest coal power plant, beyond its slated 2022 closure.



Malcolm Turnbull wants the plant to stay open for another five years but that idea was very publicly shot down by the AGL chief executive, Andy Vesey, on Tuesday.

Origin Energy, one of Australia’s biggest power companies, ruled out buying the Liddell plant on Wednesday. “Origin has already announced plans to close our only coal-fired power station, Eraring, by early 2030s and is not looking to buy any new coal plant,” a spokeswoman said.

The tussle between AGL and the Coalition continued on Wednesday. The government suggested that AGL had privately expressed a willingness to sell the plant.

Josh Frydenberg, the energy minister, said AGL had made it “clear to us” that he’s prepared to sell to “a responsible party”.

“That’s why we’ll have discussions with them on Monday and no doubt those discussions will be ongoing, because what we want to see is reliable and affordable power,” Frydenberg said.

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A spokesman for Frydenberg later said it was too early to consider potential buyers for Liddell.

“We have only just started discussions with AGL following a report we got from Aemo [the Australian energy market operator] on Monday night,” he said.

AGL issued a statement on Wednesday morning saying it had made “no commitment to sell the Liddell power station nor to extend its life beyond 2022”.

“AGL will continue to engage with governments, regulators and other stakeholders to deliver appropriate outcomes but notes that the company has made no commitment to sell the Liddell power station nor to extend its life beyond 2022,” the company said.

On Tuesday, Vesey took to Twitter to rule out extending the life of Liddell beyond 2022 and declare “we’re getting out of coal”.

Andy Vesey (@AndyVesey_AGL) .@TonyAbbottMHR We're getting out of coal. We committed to the closure of the Liddell power station in 2022, the end of its operating life.

That prompted the former resources minister Matt Canavan to describe Vesey as “the biggest hypocrite walking around Australia”.

Canavan said AGL was the country’s biggest producer of coal-fired power. “AGL should be operating with a modicum of the national interest in mind, not just trying to maximise their profits,” Canavan said.

“If Andy Vesey wants to ease his moral guilt about producing coal, he’s welcomed to sell coal-fired power stations at book value – indeed I was talking to some investors tonight who would happily buy his whole coal-fired power fleet at book value,” he said.

Matthew Canavan (@mattjcan) Hay @AndyVesey_AGL if you want out of coal sell your coal power stations for book value and ease your moral guilt!

Canavan’s interjection came as the federal government entered negotiations with AGL, in an attempt to keep Liddell open.

Frydenberg was asked whether Canavan’s remarks were helpful. Frydenberg described Canavan as a good friend and a good colleague.

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“He’s making the obvious point, which is that AGL still has a number of coal-fired assets that they own, and that this decision to close Liddell in 2022 will, according to Aemo, have an implication for the stability of the energy system,” Frydenberg said.

“That’s why the prime minister, whose first responsibility is to Australian families and Australian businesses, has reached out to AGL to have discussions about them about keeping that power plant going for at least another five years.”

Frydenberg said the costs of delivering stability to the energy market would also be borne by consumers.

In a report released on Tuesday Aemo found the risk of electricity supply failing to meet demand drops in scenarios where more renewable energy is driven online by state-based renewable energy targets.