Engie Scales Back Coal Generation

French utility Engie says it has agreed to sell its 70% stake in Australia's Loy Yang B 1-GW coal-fired power plant to local Alinta Energy’s owner, Hong Kong-based Chow Tai Fook Enterprises.

After this sale, Engie said that coal will represent 6% of its global power production capacities, when it represented 13% at the end of 2015. The plant provides about 17% of Victoria state’s energy needs. Japan's Mitsui owns the other 30% interest in the power plant and has not issued any statement.

The proposed transaction is expected to translate into a €666mn ($789mn) reduction to Engie’s consolidated net financial debt; it is subject to customary conditions and should complete in 1Q 2018 at the latest.

Engie CEO Isabelle Kocher said: “This transaction confirms Engie’s positioning in low-carbon generation, energy infrastructures and integrated customer solutions. I would like to thank the Loy Yang B staff for their commitment as we are now going to work with Alinta Energy to ensure a smooth transition.”

Earlier this year Engie closed the final units of its 1.542-GW lignite-fired power plant and lignite mine at Hazelwood, 150 km east of Melbourne, after 53 years of the plant's operation; at its peak, the plant provided 25% of Victoria's and 5% of Australia's power needs.