Shell teams with ICG to buy Meridian’s Australian assets in $729m deal


Global oil and gas giant Shell announced on Monday it had teamed with Australian investment manager Infrastructure Capital Group (ICG) to take over energy retailer Powershop via a total acquisition of its parent company, Meridian Energy Australia (MEA), a subsidiary of New Zealand-based company Meridian Energy.

When the transaction is completed, the consortium will separate MEA, with Shell taking ownership of the energy retail business Powershop Australia, which currently provides electricity to 185,000 customers across New South Wales (NSW), Victoria, South Australia, and the south-east corner of Queensland.

ICG will become owner of MEA’s portfolio of renewable energy generation assets, including the Burrinjuck and Keepit hydro power stations in NSW, the 131 MW Mount Mercer Wind Farm in Victoria and the 70 MW Mount Millar Wind Farm in South Australia, and development projects including the 20 MW/40 MWh Hume battery energy storage system (BESS) set to be installed alongside the 200 GWh Hume Hydroelectric Power Station in regional NSW.

As part of the transaction, Shell has agreed to acquire all output from the wind and hydro assets under purchase agreements (PPAs).

Shell’s Renewables and Energy Solutions executive vice president Elisabeth Brinton said the acquisition of Powershop is in line with the company’s Powering Progress strategy and will form Shell’s residential power platform in Australia.

“Our aim is to become a leading provider of clean power-as-a-service and this acquisition broadens our customer portfolio in Australia to include households,” she said.

“Shell’s presence across the entirety of our changing energy system means we are well placed to manage complexity for customers so that we deliver simple, cleaner energy solutions.”

Shell said it aims to sell about 560 TWh a year globally by 2030 as part of its integrated power business, twice as much electricity as its businesses sell today, and expects to serve more than 15 million retail and business customers worldwide.

Purchase adds to Australian portfolio

The purchase of Powershop builds on Shell’s portfolio in Australia. The energy giant acquired electricity retailer ERM Power in 2019 and followed that with the purchase of a 49% stake in ESCO Pacific, one of Australia’s biggest utility-scale solar developers before buying Perth-based carbon farming specialist, Select Carbon.

Australia is also the site of the oil major’s first global investment in an industrial-scale solar farm with the 120 MW Gangarri Solar Farm in Queensland’s south west powering up in September.

Shell Australia chairman Tony Nunan said the company is committed to building a cleaner energy system in Australia through a diversified and integrated portfolio that delivers a broad range of decarbonisation solutions and services to business and residential customers.

“This acquisition is another example of how we are continuing to grow our footprint in Australia to meet customers’ evolving needs through the energy transition,” he said.

“Powershop today offers innovative energy packages, and customers will benefit in the future from access to Shell’s broader suite of energy solutions linked to e-mobility and battery storage.”

ICG said the transaction, which will see it acquire MEA’s assets through its Australian Renewables Income Fund (ARIF), will complement its existing portfolio of renewable energy assets.

ICG managing director Tom Laidlaw said the deal will increase the company’s operating renewable energy generation capacity under management to 875 MW and expands the extensive development pipeline of opportunities.

Meridian plans to develop a 20 MW battery storage system alongside the Hume hydro power station.

Image: Meridian

“We are delighted to have partnered with Shell to acquire this high-quality portfolio of renewables assets,” he said. “Not only does this significantly scale our renewables portfolio but the addition of hydro comes at an important stage as we look to diversify with well-established, well-located assets.”

Laidlaw made special mention of the Hume BESS project, the first battery and hydro power co-location in Australia, saying it could form the foundation of other similar projects.

“The proposed Hume hydro BESS presents a unique opportunity to develop what will be a meaningful milestone for renewables in Australia and something we hope to replicate elsewhere,” he said.

ARIF’s existing assets include the 132 MW Hallett 4 and 119 MW Willogoleche wind farms in South Australia, the 55 MW Mumbida Wind Farm in Western Australia and the 107 MW Bald Hills Wind Farm in Victoria. ARIF also holds a 75% interest in the Australian Renewables Energy Trust (ARET) platform with ENGIE ANZ to develop a pipeline of over 2.5 GW of renewable projects.

Meridian said the sale remains subject to regulatory approvals, including Shell receiving foreign investment approval from the Australian government.

The deal is expected to be finalised in the first quarter of 2022.

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