Australia Is Rushing To Exit Coal
AGL, one of Australia’s largest coal-fired power station operators, is not having a good year. It has fought off a hostile takeover effort led by Mike Canon-Brookes, had to swallow the bitter pill of a failed demerger, and now is bowing to the inevitable and announcing the early closure of its fossil fueled fleet. Unbelievably, AGL will exit coal.
Following hot on the heels of similar announcements from Queensland and Western Australia, this is welcome news indeed. AGL operates CFPS in New South Wales (Liddell and Bayswater), and the brown coal burning Loy Yang A in Victoria. Loy Yang A is expected to close 10 years earlier than previously planned, in 2035. Liddell will close next year and Bayswater between 2030 and 2033.
In a note to the Australian Stock Exchange, AGL states that it is targeting an exit from all coal-fired power generation. The company plans to have 5 GW of renewables and firming in place by 2030, and already has 3.2 gigawatts of new renewables and firming capacity in the pipeline. AGL’s plans are set out in its inaugural Climate Transition Action Plan. These include redeveloping fossil fuel sites in Hunter Valley, Torrens Island, and Latrobe Valley into industrial “Energy Hubs.” State governments are working with AGL to help transition communities.
New AGL chair Patricia MacKenzie states that the company has listened to its shareholders. The largest of which is Mike Canon-Brookes. Although press releases and speeches contain many references to becoming “carbon neutral” and “aligning with the Paris agreement,” there is still skepticism about AGL’s ability to achieve these goals.
“To be clear, as AGL’s largest shareholder, Grok is committed to working with the Board to help effect the necessary changes and make the most of the decarbonization opportunity. The strategic review was a step in the right direction — but it was not ambitious enough in providing for a plan that delivers below 1.5 degrees,” the Grok spokesperson said on Friday. AGL needs to, in Shakespeare’s words: “exit stage right, followed by a bear.” Exit coal.
The battle to decarbonize AGL still has a long way to run. Grok Ventures (Mike Cannon-Brooke’s investment arm) has nominated members to AGL’s board, but the current board is advising shareholders to vote against them. Apparently, their skill set is “not aligned” to the priority skills being sought for the company’s current strategy.
Grab the popcorn, it’ll be slower than the Bathurst 1000, which is running this weekend, but just as exciting.
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