The Victorian minister for energy industries and resources, Theo Theophanous, welcomed the new player to the state and officially opened Red Energy's new head office in East Richmond, Melbourne.

In a statement Red Energy said it plans to take advantage of the deregulation of the energy market with customer incentive plans such as no fixed term contracts and discounts for paying bills on time.

As indicated to shareholders at Contact's Annual Meeting in February, the launch of Red Energy is part of the company’s long-stated strategic intention to grow its Australian interests.

However, the future of both Contact and Red Energy is already up in the air after majority Contact stakeholder Edison Mission Energy (51%) put its share up for sale and has reportedly fielded a $1.8 billion offer from AGL and is in the sights of Origin Energy also.