PwC: Interest grows in Aussie renewable energy

By Rob Starr, Content Manager, Big4.com

According to PwC’s analysis of deals in the power and renewable energy sectors for the first half of 2012, Global interest, driven by China and Japan, is growing in Australia’s renewable energy industry as the 2020 deadline for the 20 per cent renewable energy target looms closer.

The largest renewable deal involved Japan’s Eurus Energy – a subsidiary of Tepco – agreeing to acquire the Hallett 5 Wind farm for $US129 million, its first wind power investment in Australia.Tepco was also involved in the $3.1 billion sale of Loy Yang to AGL, the second biggest deal in the region for the period.

The report, Asia Pacific Power & Renewable Deals: 2012 half-year analysis and M&A Outlook, found that merger and acquisition activity in the region’s power sector far outpaced the rest of the world.Renewable deal value and volume both bucked global trends. Asia Pacific deal value slipped just $5 million to $680 million compared with a global fall from $US16.6 billion to $US6.6 billion while volumes in the Asia Pacific dipped 16 per cent, from 57 deals to 48 the year before. Globally, the number was off 42 per cent.

PwC Energy, Utilities and Mining leader Jock O’Callaghan said Chinese and Japanese interests were attracted to Australia’s investment stability and the opportunity to diversify their portfolios, and to leverage existing technology and operational capabilities.

Tariff restrictions in the Chinese market are constraining returns, which means more Chinese companies are adopting “go abroad” strategies,” Mr O’Callaghan said.

“This trend is likely to accelerate and Australia is an obvious destination.”