Wesfarmers pursues energy options

Wesfarmers is boosting its executive team in readiness for an expansion of its energy business, including a possible move into electricity retailing and generation.

The conglomerate is seeking to recruit an executive with “the drive and enthusiasm to introduce a new player into the electricity retail market”.

Wesfarmers has created a new electricity retailing business to market the output of power stations supplied by its subsidiary Premier Coal, and wants to establish the business as a “major force”, according to a job advertisement.

Wesfarmers Energy managing director David Robb played down the significance of the initiatives, telling WA Business News they did not signal a big strategic shift.

“We’re just trying to be positioned to make sure that we can take advantage of any opportunities that may come,” he said.

“The market is evolving so fast, you need knowledge and expertise across all fronts.”

Wesfarmers’ energy assets in Western Australia include Premier Coal and regional power company engen (formerly StateWest Power).

It has pursued several attempts to expand its activities, including an unsuccessful bid to build WA’s next base load power station.

The other unsuccessful bidder in that process was Rick Stowe’s The Griffin Group, which has decided to proceed with its Bluewaters power station at Collie and is currently seeking buyers for the output.

Another recent entrant to the electricity market is Alinta, which is building a series of co-generation power stations at Alcoa’s alumina refineries and is marketing the output direct to business customers.

The entry of new players to the electricity market has been made possible by the state government’s deregulation reforms, which included the break-up of Western Power into four separate businesses.

Mr Robb said Wesfarmers remained keen to expand Premier Coal’s annual output to five million tonnes.

This would require development of new markets, to build on its long-term contract to sell 3.5 million tonnes per annum to Verve (formerly Western Power’s generation business).

He added that Wesfarmers retained a good relationship with Transfield, its bidding partner for the base load power station project.