Alinta says coal-fired power will generate savings
Electricity retailer Alinta says buying coal-fired power generation is central to its ability to offer price reductions for customers this year, drive greater competition and increase sales.
The company, privately owned by Hong Kong’s Chow Tai Fook Enterprises, is pledging to reduce average customer electricity tariffs in Victoria by 2.8 per cent from next year and deliver annual savings worth hundreds of dollars. The low-price strategy will be facilitated by Alinta’s mid-month acquisition of the 1000 megawatt brown coal Loy Yang B station in Victoria’s Latrobe Valley for just over $1 billion. The power plant has the ability to supply 1.5 million homes.
The acquisition follows a warning from the competition watchdog last year about insufficient competition in generation and retail markets as well as concern from businesses about the difficulty of shopping around for cheaper energy deals.
Alinta CEO Jeff Dimery said the promised price reduction meant Victorian customers could be between $180 and $220 better off a year when compared with the major retailers’ best advertised offers. “We understand ... there’s CO2 that comes with a plant like this … (but) energy does need to be affordable … and this is one of the cheapest forms of energy available,” he said.
Energy Minister Josh Frydenberg said Alinta’s move to reduce power prices was “consistent with the advice from the Australian Energy Market Commission that household power prices will come down over the next two years.
“Alinta’s lead should be followed by other energy companies. Their purchase of Loy Yang B and entrance into the retail market as a serious fourth player is good news for customers as more competition helps lower prices.”
Mr Dimery said acquisition of the Loy Yang B plant also underscored the importance of coal-fired generation as a transition fuel over coming decades that would allow the company to pump more investment into renewable power sources.
Thursday, January 11, 2018
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