PROJECTS
Economic Advice to Bidder on $3.25 billion Generation and Retail Privatization
The problem
Origin Energy, one of Australia’s largest power companies, wanted to bid for the power generation and retail assets that the State of New South Wales was privatizing, but the bid risked being blocked on competition grounds. The competition issues were complicated because the privatization involved simultaneous sale of several different generation and electricity retail assets. The competitive effects would depend on the package of assets a bidder acquired, but this would not be known until after the tender was complete.
How we helped
Castalia advised Origin Energy on the economic aspects of the bid. We demonstrated to the ACCC (the competition regulator) that, even if Origin acquired the maximum number of generation and retail assets, there would be no competitive detriment, since the number of other generators and retailers in Australia’s National Electricity Market meant Origin would not have pricing power.
Impact
Origin Energy was pre-cleared by the ACCC to bid for the assets it wanted. In 2011 Origin Energy acquired the retail arms of Integral Energy and Country Energy from the NSW government (customer base 1.6 million), and rights to the output of the Eraring Energy power stations on Lake Macquarie and in Shoalhaven, for a total price of AUS$3.25 billion.
The client
Our team
How can we help you?
How can we help you?
WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
Sinclair House, 3 Glenside Crescent
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (0)1 85 64 10 22
3B Rue Taylor
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-121
Colombia
Thinking for a better world.

WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (1) 73 44 26 97
6 Rue Duret
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia
Thinking for a better world.
