Last week, AGL, Australia’s biggest polluter revealed the outcome of its highly anticipated strategic review.
After posting a $2.7 billion loss, the pressure was on the operator of some of the country’s dirtiest coal burning power stations to clean up its act or face even bigger losses in the coming years.
As well as the epic financial losses, the review was driven by a pressing need for AGL to get with the times. The old economic model that underpinned coal-fired power generation is under enormous pressure from asurge of large-scale renewable energy and storage projects already powering Australia and exerting downward pressure on energy prices, with many more to come online in the near-term, coupled with world-leading rates of households adopting rooftop solar.
Rather than moving to get onboard the renewables roadtrain, AGL has chosen to deal with the pressure by announcing plans to split into two businesses.
A ‘retail’ business, which will house AGL’s token renewable energy assets and try to push the community friendly image that AGL likes to cultivate.
And a separate company to hold AGL’s coal assets including some of the nation’s top climate polluters, Bayswater and Liddell in New South Wales’s Hunter Valley, and Loy Yang A, in Victoria’s Latrobe Valley.
AGL has once again let down its investors, shareholders and the growing number of Australians who want to see coal replaced with clean energy like wind and solar.
AGL wants to keep these ageing, unreliable and climate-wrecking coal-burning power stations out of the public eye but will continue to rely on them to generate the bulk of its power for decades to come, in the case of Loy Yang A, until 2048!
AGL plans are completely at odds with its hollow marketing rhetoric and the globally accepted timeline for coal closure that we need to maintain a safe climate.
By hiding its polluting coal assets away in a separate business, AGL is attempting to pull the wool over the eyes of its millions of customers. It’s masquerading as a forward-facing, modern energy business while holding on to its ageing, unreliable coal power stations.
AGL has already been left behind and this dodgy demerger will only entrench its backward position on climate and energy. Its main rival Energy Australia, which has been slow but seems almost like a Formula One race car compared to the glacial pace of AGL, has brought forward the closure of its Yallourn coal burning power station in Victoria’s Latrobe Valley to 2028. Yallourn will be replaced by the world’s largest battery.
Energy Australia Man ging Director Catherine Tanna said the new battery “will help to secure Victoria’s energy supply and enable more renewables to enter the system”.
The very same renewables that make AGL’s decision to run its Loy Yang A power station until 2048 completely untenable on economic and environmental grounds.
Given where the coal market is headed, AGL’s CEO Brett Redman is dreaming if he thinks Loy Yang A can stay open that long. This timeline is also completely inconsistent with nation-wide efforts to reach net zero emissions by 2050.
AGL is clearly a company in trouble and it’s gone into damage control. But rather than doing anything of substance, AGL has chosen to treat the inevitable decline of coal and it’s terrible environmental impact as a marketing problem rather than an opportunity.
Customers of all businesses want them to take meaningful action to reduce greenhouse gas emissions.
Other businesses are listening and responding by announcing shifts to 100 per cent renewable electricity. This year we’ve seen Coles, Coca-Cola Amatil and TPG Telecom make the renewable switch, following brands such as Woolworths, Bunnings, Officeworks, Telstra and ALDI last year.
These are all big, complex companies that use lots of energy but that hasn’t stopped them from making concrete plans to reduce emissions.
Energy providers, like AGL, should be doing the same, rather than relying on complex corporate manoeuvres to try and hide their destructive operations and continue polluting.
If AGL was serious about the future of the planet, and the long term future of its business, it could power Australia with renewable energy – and it would create thousands of jobs and thriving industries, particularly in regional Australia.
There are clear economic benefits for AGL to make the switch to clean energy, pumped hydro and battery storage could be attached to the sites of its existing power stations, where they can easily hook up to high voltage transmission lines.
With renewable energy already powering the country, and growing every day, it’s time for AGL to come clean and make the switch – or fall even further behind.
