By Nick Toscano
A Singaporean energy giant has struck a $6.5 billion deal to buy Australia’s fourth-largest power generator and retailer, Alinta, and outlined plans to invest in a major build-out of renewable energy across the country.
The deal, announced late on Thursday night, ends months of talks between Alinta’s owners and Singapore-listed Sembcorp Industries, and marks one of the most significant foreign forays into Australia’s energy market in years.
Alinta owns Victoria’s Loy Yang B coal-fired power station.Credit: Fairfax
If it gains regulatory clearance, Sembcorp will acquire all of Alinta’s operations, including its retailing business with 1.1 million customers and generation assets spanning renewables, gas plants and the huge Loy Yang B coal-fired power station in Victoria’s Latrobe Valley.
Buying Alinta would provide Sembcorp with a platform to “accelerate renewables growth in Australia”, the company said. Sembcorp has named Australia as a key market for its ambitions to grow its global renewable energy portfolio to 25 gigawatts by 2028.
“Australia jumped out as a very attractive market for us,” said Alex Tan, Sembcorp’s regional president of renewable energy. “It offers us room and scale to grow our renewables footprint.”
Australia is experiencing one of the world’s fastest energy transitions as polluting coal-fired generators, which still supply most of the grid’s electricity, approach the end of their lives, while wind and solar farms, household rooftop solar panels and batteries are expanding their role in the grid every year. The Albanese government has set a target for renewables to supply 82 per cent of the grid by the end of the decade.
The 1200-megawatt Loy Yang B power station, which burns brown coal to generate electricity, has the latest scheduled retirement date of any coal plant in Victoria, and one of the latest in Australia.
This timeline conflicts with the official assumptions of the energy market operator that brown coal will have exited the grid entirely by the mid-2030s, as plant owners continue facing soaring costs to maintain ageing equipment and midday surges of cheap solar power flooding the market and eroding their profits.
However, Sembcorp, whose major shareholder is the Singaporean government’s investment fund Temasek, on Friday said Loy Yang B remained an important asset in Alinta’s portfolio and signalled no plan to revise its closure date. “We believe it’s important to strike a balance between affordability and security and decarbonisation,” Tan said.
With more than half of eastern Australia’s remaining coal-fired power stations scheduled to close within 10 years, officials and experts are worried that the rollout of new generators, storage assets and powerlines is lagging the speed needed to keep electricity supply and prices steady through the transition, and are calling on the private sector for an urgent lift in investment.
Alinta chief executive Jeff Dimery, who will remain in the role, said that having access to Sembcorp’s global industry expertise and strong balance sheet would help drive a necessary uplift in renewable energy and battery installations.
“There is lots of excitement from our end for what the future holds,” he said.
“What the Australian government and community want to hear is not what we are going to close, it’s what we are going to open and what we are going to bring to the grid to help drive down the cost of energy and secure the reliability of the system.”
The sale of Alinta comes as its current owner, Chow Tai Fook Enterprises, has been looking to sell off some assets around the world.
Chow Tai Fook has invested $1.1 billion of cashflow back into Alinta since it bought the company in 2017. Over that time, it has driven significant increases to Alinta’s underlying earnings, electricity generation capacity and customer base.
The sale of Alinta, which is subject to shareholder and regulatory approvals, is expected to close in the first half of 2026.
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Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: www.smh.com.au
