Who is Zenith and what is its business?
Zenith Energy and its subsidiaries, (including Zenith Pacific Pty Ltd (Zenith Pacific)) (together, Zenith) provide reliable, cost-effective power generation solutions, primarily for clients operating in the resources and energy sectors in remote areas of Australia. Clients are typically operating in locations that are 'off-grid', i.e. not connected to the National Electricity Market (NEM) or the South West Interconnected Systems (SWIS).
Zenith designs, constructs and manages power generation facilities incorporating a range of fuel types, including diesel, natural gas, solar and hybrid systems. Zenith provides its services under both a Build - Own - Operate (BOO) model, and under a Manage - Operate - Maintain (MOM) model.
Under the BOO model, Zenith owns or finance leases power generation facilities, whereas under the MOM model Zenith operates and maintains facilities that are owned by the client. Where possible, Zenith contracts on a BOO basis, as it provides greater certainty in terms of contract tenure and enables Zenith to optimise operational performance.
The Company currently has 12 contracts in place for approximately XXMW of owned installed capacity (i.e. where the generation facilities are owned of funded through finance leases by Zenith) and an additional XXXMW of operated capacity (i.e. where the generation facilities are owned by the client).
Zenith's corporate office is headquartered in Perth, WA, with an additional facility in Cairns providing a platform for operations in North Australia and South East Asia.
How does Zenith generate its income?
Zenith generates income under long-term contracts with its clients, which typically have an initial term of 5 to 10 years, with any extensions subject to mutual agreement.
With the BOO model, Zenith enters into Power Purchase Agreements (PPAs) with its client pursuant to which Zenith receives a capacity charge on a 'take or pay' basis (i.e. Zenith receives payment whether or not the client uses any power) and an energy charge calculated on actual power usage.
Under the MOM model, Zenith receives a fee for operating and maintaining the client's power generation facilities.
Zenith also receives a relatively smaller amount of income from additional engineering design and construction work.
- A market leader in remote power provision to Australian natural resources and energy products;
- Long-standing relationships with highly creditworthy counterparties;
- Expertise covering multi-fuel and multi-product solutions, selected to deliver the best solution for clients' needs;
- Engineering capability to determine the product mix to optimise efficiency and minimise life-cycle cost;
- Management team with extensive experience delivering remote power solutions, across fuel sources and product types;
- Power Purchase Agreements (PPA) providing long-term revenue stability with Take-or-Pay arrangements providing downside protection;
- A strong pipeline of domestic opportunities, with a number of resources and energy projects approaching production stage and requiring remote power generation;
- Participation in an growing Independent Power Provider market as industry acceptance of the BOO model increases; and
- Growing use of, and demand for, renewables with ability to retrofit existing power generation facilities with renewable solutions.
Who are Zenith's key clients?
Zenith's clients are predominantly large resource companies with mining or oil and gas operations in remote regions of Australia.
What are Zenith's competitive advantages in the sector?
Zenith's competitive advantages include its:
- In-house engineering capabilities and ability to provide clients with a bespoke solution, tailored to a client's requirements;
- Expertise in providing hybrid power solutions, with the Company being agnostic as to the type of fuel, or equipment, to be used;
- Robust relationships with clients, evidenced by extensions to long-term contracts;
- Management team's knowledge of , and experience in, the remote power industry; and
- Ability to deliver high reliability and quality of supply.
What is Zenith's history?
Zenith was founded in 2006 by Doug Walker. Prior to founding Zenith, Doug was the founding director and key executive of StateWest Power Pty Ltd (StateWest), which was incorporated in 1987.
StateWest conducted substantially the same business model as Zenith, providing power solutions to clients in remote areas. StateWest was acquired by a Wesfarmers subsidiary, Wesfarmers Energy, in 2003 and re-branded to Engen. In 2001 Wesfarmers sold the Engen business to Energy Developments Limited.