The South Australian mining lobby has signed a deal with a renewable energy company to supply electricity for a consortium of its members, which will save them between 20 and 50 percent on their power bill.
South Australia has the highest energy bills in the country and the South Australian Chamber of Mines and Energy (SACOME) requested permission from the Australian Competition and Consumer Commission to allow some of its members to join forces to get a better deal.
The ACCC authorised SACOME members to go to the market to negotiate for a new electricity supplier.
“We did this because, as a group, they had a better chance of securing supply from a new source of generation that would bring new competition to the market,” ACCC chairman Rod Sims said.
“New independent generation capacity is critical to improving competition and helping bring down electricity prices.”
Power will be supplied by SIMEC Zen Energy, which is owned by British billionaire Sanjeev Gupta, who recently bought out Whyalla steelworks, promising to ramp up production and create jobs by tapping into renewable energy to drive down power bills.
Gupta announced that his company will be making big investments in solar, pumped hydro and battery storage in South Australia in the coming years.
Speaking about the deal, SIMEC Zen Energy’s Richard Turner said the mining lobby consortium deal is the next step in its ambitions to become not only a significant energy generator but also a retailer.
“We’ve already announced massive renewable generation that we’re building for our own purposes, for our own heavy industries around the country and now this presents the opportunity for us to be able to build out excess generation, new generation, to supply the next tier of industrial users and commercial users so it’s a very exciting day for us,” he said.
SACOME’s original mining lobby consortium had 22 members, but so far five have signed up to the eight-year deal, and only one, Hillgrove Resources, is a mining company.
Other members of the consortium include local supermarket chain Foodland, agricultural companies Viterra and the Central Irrigation Trust and chemical manufacturer Adchem.
CEO Rebecca Knol explained that companies signed up as SACOME members to get in on the deal. She said the door is still open to other SACOME members to sign up to the deal, which will take effect in 2019.
Some of SIMEC Zen Energy’s projects are still under construction and the company will contract and underwrite other projects to deliver on the deal.
Although Zen will be sourcing energy from other markets until all its projects come on stream, it will all be from renewable sources.