The sale of the ancient, toxic Vales Point power station by Trevor St Baker and Brian Flannery to a Czech coal company Sev.en Group virtually guarantees it will continue to inflict respiratory disease on the Hunter Valley for many years to come.
Vales Point can only operate courtesy of extraordinary exemptions from air quality standards, especially around its emissions of nitrogen oxide and particulate pollution.
St Baker and Flannery acquired it for just $1 million from the NSW government in 2015 and will sell it for hundreds of millions in a fossil fuel payday that means Sev.en Group will expand its Australian presence beyond its Queensland coal-fired power generation assets.
Sev.en is controlled by Czech billionaire Pavel Tykač and operates from tax havens in Cyprus and Liechtenstein. Its business model is acquiring coal-fired power stations nearing the end of their lives and continuing to operate them, but only when electricity prices are high enough for them to profit. As the company explained in its 2020 profile:
Our strategy is complementary to major traditional operators who are often required to divest their conventional plants … As a private company, we are independent from external stakeholders’ pressure. We purposefully invest in conventional assets and have full command over the deployment of our own capital resources.
The company has a history of pressuring governments to curb regulations that inhibit the continued operation of coal-fired power stations, including lobbying for exemptions to air quality standards.
In effect Sev.en has based its business model on publicly listed and government-controlled companies succumbing to investor and lender pressure to divest themselves of coal-fired power plants and selling plants that should be shuttered. Sev.en, which has no investors to keep onside, keeps them operating, waiting for periods of higher electricity prices to bring them online.
While local coal-fired power owners are bringing forward the closure dates of their ancient assets, Sev.en has a business model for continuing their operation, and the toxic effects they inflict on local communities, for years to come.
The NSW government can expect a lot more lobbying to continue exempting Vales Point from basic air quality standards.
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