ACCC will not oppose Brookfield’s acquisition of Neoen
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The news: The competition regulator will not oppose the acquisition of the largest owner and operator of renewable energy projects in Australia, Neoen, by a consortium led by Canadian infrastructure investor Brookfield.
The green light from the Australian Competition and Consumer Commission (ACCC) is subject to a court-enforceable undertaking to divest Neoen’s existing Victorian renewable electricity generation and storage assets and its development projects in Victoria.
The numbers: Global asset management business Brookfield will be required to divest Neoen’s operational assets and six further development projects in Victoria. The operational assets are the Victorian Big Battery, Numurkah Solar Farm, Bulgana Wind Farm and Battery.
Neoen has six development projects in Victoria that will also be divested, the regulator said.
The context: The ACCC's decision followed an investigation focused on competition in the Victorian markets for the supply of renewable generation, firming capacity and electricity storage services, and frequency control ancillary services.
The regulator was concerned that Brookfield, through its controlling interest in AusNet, would be able to operate the Victorian transmission network to favour its own generation and storage assets and/or hinder rival generators or storage assets. The ACCC concluded that the acquisition of Neoen would increase Brookfield’s incentives to engage in such conduct.
AusNet owns and operates Victoria’s monopoly electricity transmission network and parts of the electricity distribution network. AusNet also has two battery energy storage systems and a further two development projects in Victoria.
In May, Brookfield entered exclusive negotiations to acquire a 53.32% shareholding in French renewable energy developer Neoen, with a tender to eventually acquire 100% of the company.
What they said: "The ACCC has long-standing competition concerns with cross-ownership of monopoly energy network assets and energy generators, due to the potential for the monopoly provider to discriminate against rivals and favour its own operations," said ACCC commissioner Philip Williams.
"The ACCC considers that, without the divestment, the acquisition would have increased Brookfield’s incentives to delay or increase the cost of connections works on rival projects or operate the AusNet transmission network to benefit Brookfield’s related assets.
"The ACCC considers that this divestment will reduce Brookfield’s incentives to engage in such conduct as a result of the transaction."
The source: ACCC media release
