Why has Infratil invested in these the power stations?
The power stations provide a respectable rate of return over the short term. More importantly in the medium to long term, they provide strategic support for Infratil’s retail growth ambitions. Power station ownership will enable IEA to broaden its purchasing options over time. This may be of particular value if the ongoing consolidation and vertical integration of the Australia power market threatens the current ready supply of wholesale contracts. Currently, the electricity market provides good access to wholesale hedge cover at competitive prices; though much less so in South Australia. In the medium to longer term IEA is aiming to build resilience to its retail position through ownership of generation and, more strategically, through short lead time options for self build which may be exercised if market conditions change. Once permitted, these stations can be built and operational in less than 9 months. Angaston Power Station has an off take contract in place until the end of 2011
