‘Renewable energy is a key pillar of our investment programme’
For many years the Gupta family, owners of the international metals and steel group Liberty House, and the shipping, industrial, mining, energy and commodities group SIMEC, have operated largely below the media radar. But last year they made a number of high-profile moves. The group restarted a mothballed steel mill in Wales — going against the grain of Europe’s troubled steel industry — and acquired assets from Swraj Paul’s Caparo group. It stated its interest in Scottish assets of Tata Steel’s long products division, currently the subject of exclusive talks with Greybull Capital, and this week acquired a stake in the company behind Britain’s first tidal lagoon project, with plans to begin feasibility studies for tidal lagoons in the Gulf of Khambat. Businessline spoke to Jay Hambro, CEO of SIMEC’s energy and mining division, and chief investment officer for the Gupta family. Edited excerpts:
Why tidal and why now?: Tidal Lagoon Power has the best technology, and is moving forward in proven technology, technology that works. In the UK, the first project has got the green light — and there are a total of seven British projects in the pipeline. We have identified that UK will face a critical shortfall of energy in the near term. The renewable energy space is a key pillar of our investment programme.
Why has it taken so long for power from tidal lagoons to begin to come through?: These projects are hugely capital intensive. We believe that on the first project we can compete (on pricing) with Hinckley Point (a new nuclear power station being constructed with Chinese backing) and that it should be significantly cheaper after that — and cheaper than wind and solar. You are looking at hundreds of years of energy production under one project.
At what stage are the plans for bringing tidal lagoon power to India?: The feasibility studies are starting now. We have a lot of experience in India — though these things can take longer in more challenging operating environments. At the moment we are limited by where we can build as we can only look at places with the largest tidal changes. But once we can scale this we can spread it out, and then we are talking about dozens of sites.
What are the priorities for the wider group?: Sanjeev Gupta’s (Managing Director of Liberty House) ambitions are to consolidate in certain areas and fill gaps in the market, and that is what he’s done in the energy space. He’s captured the value chain, which is very exciting. We will be consolidating business opportunities as interesting ideas arise. Our priorities are to take our skill base and asset base and to leverage that. We are very fortunate to have a broad portfolio of assets and people. The group has a critical base of credibility, and has been gaining a lot of support from financial institutions.