AGL, Australia’s biggest energy supplier, will split off its emissions-intensive coal- and gas-fired power plants from its retailing business as the shift to renewable energy accelerates and pressure against fossil fuels continues to build.
The split of AGL, to be detailed at an investor briefing on Tuesday, will create two new businesses: “New AGL”, which will include the company’s retailing division and “PrimeCo”, which will be the nation’s largest electricity generator.
“The accelerating market forces of customer, community and technology are driving the imperative to create this new path and separate AGL into two distinct organisations,” AGL chief executive Brett Redman said.
The move comes as a flood of renewable energy into the nation’s main power grid sends wholesale power prices crashing to multi-year lows, pummelling the profits of traditional power suppliers including operators of coal-fired power plants, which are struggling to compete with wind and solar.
Earlier this month, EnergyAustralia announced it would close down Victoria’s Yallourn brown coal-fired power plant in 2028, four years earlier than planned, in response to plunging electricity prices.
AGL, which operates coal- and gas-fired power plants and renewable energy generators around the nation, posted a $2.3 billion loss for the first half of 2021.
The ASX-listed utilities giant, which supplies 3.7 million customer accounts, was responsible for 42.7 million tonnes of carbon dioxide emissions in 2019, the most of any Australian business.
AGL plans to close its Liddell coal power generator in New South Wales in 2023. It also operates NSW’s Bayswater plant, which is scheduled to run to 2035, and Victoria’s Loy Yang A coal-fired station until 2048.