It might rank as the deal of the century — but an appalling result for New South Wales taxpayers.
In November 2015, the NSW Government offloaded Vales Point Power Station — an old, polluting coal-fired plant on the shores of Lake Macquarie — for $1 million.
Suburban homes sell for more.
A former energy industry bureaucrat and a coal baron bought Vales Point at the fire sale price through their company, Sunset Power International.
Last week, as politicians loudly debated the latest energy plan to come out of Canberra, Sunset Power quietly released its latest financial reports — revaluing the Vales Point Power Plant at a cool $730 million.
The shareholders, who lent Sunset Power the money to buy the old power plant, pocketed nearly $40 million through a share buy-back by the now cashed-up company.
Nice work if you can get it.
Who are the lucky shareholders?
The shareholders are companies associated with Trevor St Baker, an energy industry veteran and former engineer with the NSW and Queensland electricity commissions, and Brian Flannery, a BRW rich-lister who owns a suite of mining, energy, and property assets.
For Mr St Baker, there are some wonderful synergies.
He controls more than 25 per cent of the ASX-listed ERM Power Limited, which purchases power under contract from Vales Point.
In turn, ERM has contracts to supply the NSW Government with electricity.
The changing fortunes of Vales Point Power Station is, on one level, an illustration of how Australia's energy policy chaos is creating unlikely winners and losers.
Back in 2015, the State Government considered the old coal-fired power plant near worthless: unable to compete with either cheaper brown coal-generated electricity from Victoria or the growing supply from renewable energy.
As the State Government was shopping it around for sale, the "useful life" of the Vale Point Power Station was reassessed.
Despite its technical closure date of 2029, the State Government slated it for closure in 2021 — resulting in a $371 million write-down.
When it was finally sold, after struggling to find a buyer, the then-NSW treasurer Gladys Berejiklian issued a media release which said the $1 million price tag was "above its retention value".
Selling Vales Point would rescue the taxpayer from "ongoing losses" and exposure "to significant liabilities, such as costs associated with decommissioning, estimated to be in the tens of millions", she claimed.
Two years on, how different things are — wholesale electricity prices have soared.
The changing energy landscape
Over the past year, Vale Points' owners gained $380 million from electricity sales from the power station, compared to $270 million for energy generated during its last full year of state ownership.
The closure of the Hazelwood Power Plant in Victoria has tightened the market.
Victoria's decision to subsidise the continued operation of the energy-intensive Portland Aluminium Smelter has bolstered demand.
Gas prices have soared, as much of Australia's gas gets sent offshore, making coal-fired power more competitive.
Perhaps most critically, continued uncertainty about Australia's energy policy — and the Federal Government's perceived hostility to clean energy — has curtailed the amount of new generation capacity coming onto the market.
The new owners of Vales Point Power Station say they have no intention of closing it in four years' time.
Sunset Power sees the "useful life" of the old coal-burning power plant extending to at least 2029, and possibly beyond.
That's one of the reasons for the massive hike in its book value.
Some might quibble at the $730 million valuation for the station.
One analyst we spoke to said that cost of decommissioning and rehabilitating the site of the ageing unit might be in the hundreds of millions, not tens of millions, and this did not appear to be factored in.
But the days of decommissioning could be a long way off if the Federal Government's New Energy Guarantee is enacted, forcing electricity retailers and large users to enter contracts for "dispatchable energy" from gas and coal.
Great news for Mr St Baker and Mr Flannery; it looks as if they made a shrewd bet and got the power station for a steal.
Coal's fortunes reversed
For those who believe we should be shifting away from polluting fossil-fuel sources of energy, it's not such a good outcome.
In 2015/16, it was responsible for 11.4 per cent of the large-scale electricity generation in NSW, producing nearly 7 million tonnes of CO2 emissions — a cause of global warming — in the process.
"This is a stark example of the consequences of Australia's broken energy policies," said Adam Walters, research director at Energy & Resource Insights.
"Years of chaos has led to a chronic lack of long-term planning and delayed investment in new renewable capacity.
"As a result, supply tightened so much in the wake of Hazelwood's closure that windfall profits have been delivered to highly polluting coal power stations.
"Australia's self-sabotaging approach to gas exports hasn't helped either."
Maybe the NSW Government's decision to sell the ageing asset was a little hasty.
Despite the climate science, and the Paris accord, the days of coal-fired power aren't done.