Via the AFR:
Oil and gas major Shell has triggered a major shake-up of the east coast electricity supply market, striking a $617 million deal to acquire business retailer ERM Power as it prepares for the radical disruption it expects throughout the sector because of the wide-scale shift to renewables.
The agreement, struck at a 43 per cent premium to ERM’s closing share price on Wednesday, sees Shell act on well-flagged ambitions to establish a major integrated power business in Australia that sits alongside its oil, gas and chemicals business.
The group has named Australia among six markets globally it saw as prime targets for its electricity strategy, having already recently taken steps into electricity retailing in the UK, Europe and North America
Allowing the gas cartel to intensify its vertical integration with power markets is the definition of bad policy. ORG already operates in this way, exploiting its gas market manipulation to lift wholesale power prices and arbitrage both.
How is adding Shell to the same lurk going to improve competition in either market?
We should be forcing ORG to decouple its vertical integration not adding another rentier to the business.
