Australia’s biggest carbon polluter to go completely net-zero by 2035
Australia’s biggest carbon emitter, AGL Energy, will go net-zero in what it says is an ‘incredible step forward’.
The nation’s largest electricity generator on Thursday announced the shutdown of all coal-fired generation by the end of fiscal year 2035, with annual greenhouse gas emissions to reduce from 40 million tonnes to net zero.
Incoming interim CEO Damien Nicks conceded on a conference call that the new strategy would have ‘a very serious impact on our people and communities’.
But as AGL turns off coal, former coal plant sites in NSW, Victoria and South Australia will be turned into industrial hubs powered by renewable energy.
‘We’ve all got a shared ambition in delivering this, both federally and states and shareholders,’ Mr. Nicks said.
‘This announcement is an incredible step forward … this is a strategy over the next 12 years.’
Chair Patricia McKenzie said AGL will be net-zero from operations following the closure of the Liddell and Bays waterpower plants in NSW and the Loy Yang power station, which provides almost one-third of Victoria’s power.
Shares in AGL underperformed in a sharply higher market on Thursday, gaining one cent to $6.61 in afternoon trade as investors seek more details.
AGL revealed it would take a $700 million write down on fast-tracking the Loy Yang exit by a decade and said it would review dividend payouts.
There has been no decision on the exact date it will close the Loy Yang coal mine.
Nor were details available on spending up to $20 billion by 2036 on big batteries, solar and wind farms.
This shopping list includes a new interim target to have up to five gigawatts of renewables in place by 2030, up from a planned 3.2GW pipeline of projects.
This year billionaire shareholder Mike Cannon-Brookes scuppered the energy giant’s planned demerger, which would have created a power retailer and hived off ageing coal-fired operations that would have operated for longer.
Seeking more urgent change, his Grok Ventures investment firm put forward four independents for election to the board: former energy regulator Kerry Schott, sustainability expert Christine Holman, Tesla’s Mark Twidell, and experienced board chair John Pollears.
‘There is a monumental amount of work ahead,’ a Grok spokesperson said.
‘While this is a positive step in the right direction, as the largest emitter and the leading energy company in Australia, AGL needs to assume a leadership position to achieve a Paris goal of below 1.5 degrees.’
Ms McKenzie said the board planned to appoint more directors to oversee the major program of work, and would soon make a recommendation on the Grok nominations.
David Ritter, CEO at Greenpeace Australia Pacific, said AGL has been a ‘corporate muppet-show ignoring obvious trends in the sector’.
He said the clean energy transition in Australia requires closing the Loy Yang plant in 2030, shutting the Bayswater coal-burning power station by the same date, and helping households switch off toxic gas.
Liddell in NSW was already scheduled to close by next year and the Upper Hunter Valley’s Bayswater by 2030-33, so the fast-tracking strategy only applies to Loy Yang.
‘We need Bayswater in the market until 2033,’ Mr Nicks said.
Advocacy group Environment Victoria says the coal exit by 2035 is ‘an improvement, but it is still not credible’ and falls short of the Paris-aligned plan AGL shareholders demanded last year.
AGL also released updated guidance, saying earnings would remain ‘resilient’, with the generator well-positioned to benefit from higher electricity prices.
But AGL said the current economic environment of high costs ‘remains challenging’ for the company’s gas-fired Torrens Island power station, which is more than 50 years old and is South Australia’s largest plant.
AGL also published its first climate transition plan, with shareholders to vote on it and new directors on November 15.