24/01/2019 - 14:11

Sumitomo moves on growing solar market with Infinite buy

24/01/2019 - 14:11

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Sumitomo Corporation has grown its presence in Western Australia’s retail power market with the acquisition of Infinite Energy, its first investment in a distributed grid business and a move beyond its local coal and gas-focused portfolio.

Aidan Jenkins founded Infinite Energy about 10 years ago. Photo: Gabriel Oliveira

Sumitomo Corporation has grown its presence in Western Australia’s retail power market with the acquisition of Infinite Energy, its first investment in a distributed grid business and a move beyond its local coal and gas-focused portfolio.

Japan-based Sumitomo made the purchase via local subsidiary Summit Southern Cross Power Holdings, which already has stakes in two major local generators.

Those comprise a 50 per cent share of Bluewaters Power, with 434 megawatts of coal-fired capacity near Collie, and a similar slice of Newgen Kwinana, a 335MW gas-fired plant.

The deal value was undisclosed, while Infinite will still trade under its existing branding.

Infinite was founded by Aidan Jenkins in 2009, who went on to be one of the EY Entrepreneur of the Year (Western Region, Australia) finalists last year. The business now employs about 60 people.

Infinite installed solar power at this development in South Perth. Photo: Infinite Energy

The company is the fourth largest retailer of solar systems in Australia, with about 15,000 systems installed across WA and Queensland.

Many of those systems are operated under power purchase agreements, where the company pays for the capital cost and maintenance of the system, and then sells electricity to the customer.

In 2013, Infinite established a power retailing businesses and entered the contestable retail market, enabling it to sell power from the grid to entities using at least 50MW hours of power annually.

Summit’s existing retail presence includes a small number of very large retail contracts.

Mr Jenkins told Business News Summit’s backing would enable Infinite to expand its portfolio of rooftop solar-backed power purchase agreements.

“Having a shareholder with a large balance sheet really allows us to grow the portfolio,” Mr Jenkins said.

“It's a recognition that distributed energy is the future, and integrating onsite solar with batteries is really the way the energy market is going to go in the next few years.

“There's been a huge take up over the past ten years, there's been lots of ups and downs but the market is really strong.”

He said Summit would effectively be moving downstream from just having a generation presence.

Summit general manager of commercial and strategy Shane Cremin told Business News the acquisition reflected changing dynamics in the state’s power sector.

“Infinite is primarily a reasonably large solar business in Australia, and especially in WA, but the thing that was (attractive about) Infinite rather than someone else is that they do have this foothold in the WA retail (market),” Mr Cremin said.

‘For a business such as Sumitomo that’s already in the sector, that's important to us.”

Infinite panels also feature on the RAC building. Photo: Infinite Energy

He said the business recognised a continued change away from a grid entirely underpinned by large, wholesale power providers transmitting in linearly in one direction, to a more distributed system.

Behind-the-meter solar systems would be increasingly common, Mr Cremin said, and it was important to have a close relationship with the customer to bring wholesale and distributed options together.

He said he expected many customers would want both solar power and a grid supply.

“The fact we have Bluewaters and Newgen Kwinana is certainly beneficial, there's a portfolio there, but… the retailing entity of Infinite is quite active in the balancing markets as well,” Mr Cremin said.

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