As Australia’s biggest coal-fired power supplier, AGL faced a grilling from shareholders and climate advocates on Wednesday over its contribution to global warming and its plans to keep burning coal until the late 2040s.
AGL chairman Peter Botten urged investors to vote down the climate resolution, saying the targets it called for would require the accelerated closures of AGL’s coal-fired power generators before adequate replacement capacity could be developed. As coal still accounts for about 70 per cent of the east-coast power grid, Mr Botten said early power plant closures would raise the danger of blackouts or power bill spikes in the future.
“The task is to create a glide path rather than a crash landing,” Mr Botten said. “It will require the right policy and investment settings and a focus on customers from all market participants.”
While AGL is preparing to shut down its Liddell coal generator in NSW next year and has committed to reaching “net-zero” emissions by 2050, it is not scheduled to close the neighbouring Bayswater plant until 2035. Its newest coal plant, Loy Yang A in Victoria’s Latrobe Valley, is licensed to run for another 27 years until 2048.
Traditional power providers across Australia have been hit hard by the clean-energy transition. AGL sank to a $2.06 billion loss in the past financial year, largely driven by an influx of new wind and solar power driving down wholesale electricity prices to levels where coal is increasingly unable to compete. The board has described the past financial year as “extremely challenging” and warned of further profit pain to come.
By creating AGL Australia, which would have a “net-zero” carbon footprint, the board hopes to appeal to equity investors and lenders that are increasingly exiting coal assets as part of efforts to reduce exposure to the risks posed by global warming.
AGL insists the demerger will also be beneficial for Accel, as it would permit a greater focus on the responsible operation of its assets and their transition to lower-carbon energy “hubs”, which may eventually include big batteries, hydrogen manufacturing and carbon capture and storage projects.
“As part of the proposed demerger, AGL Energy will set separate climate commitments for Accel Energy and AGL Australia, enabling each business to focus on their respective strategic opportunities and challenges presented by the accelerating energy transition,” the company has said.
Also on Wednesday, Peter Brooks, an honorary professor at the Melbourne School of Population and Global Health, told AGL’s meeting the climate crisis was a public health emergency, leading to heatstroke and hospital presentations during extreme weather events. “Yet AGL has failed to asset the risk of litigation on health grounds as a material risk,” he said.
And Ashjayeen Sharif, an 18-year-old Melbourne University student, nominated himself for election to AGL’s board with the support of Greenpeace on a platform of shutting the company’s coal plants and replacing them with renewable energy by 2030.
“With the right leadership, AGL can become a genuine renewable energy powerhouse and restore shareholder value to what it once was,” he said.
Mr Sharif’s bid for a board seat was unsuccessful, receiving about 2 per cent of the vote.
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