Australia’s biggest polluter, AGL, to shut coal plants by 2035
Australia's top polluter bowed to pressure from its biggest shareholder, the billionaire climate activist Mike Cannon-Brookes, and announced it would leave coal power by 2035, a decade earlier than originally planned.
AGL Energy Ltd. will shut down the nation's dirtiest power plant, Loy Yang A in Victoria, by 2035, the Sydney-based company said Thursday. AGL Chair Patricia McKenzie said in the statement that the Bayswater site in New South Wales is the second-most polluting facility in New South Wales is on track to close between 2030 and 2033.
The 185 year-old utility has made a dramatic turnaround. In May, Cannon-Brookes became AGL's top shareholder and successfully lobbied the company to ditch plans to separate retail and power-generation companies, which would have allowed its coal power plants to continue operating into the 2040 s. The tech billionaire said that shuttering them no later than 2035 would encourage investment in clean energy projects that could replace them.
This is about access to greater pools of capital in the market - there are billions and billions of dollars out there wanting to be deployed in the market today, interim Chief Executive Officer Damien Nicks said in an interview. We want to make sure we have access to that capital. That is the biggest part of the decision we are making. The shift is a result of a new wind blowing in Australia, one of the world's biggest per-capita polluters, looking to take advantage of its sunny climate and vast empty spaces to become a clean energy powerhouse. The government that came to power in May has pledged stronger action on climate, and states have announced ambitious plans to move away from coal, which last year still fueled more than half of the nation s power needs.
According to Will Edmonds, an analyst at BloombergNEF, Cannon-Brookes is receiving some well-earned applause for his climate activism. There are also many economic factors in Australia's energy market that are pushing operators like AGL to close their coal plants earlier. In 2019 - 2020, Loy Yang A and Bayswater are huge emitters of greenhouse gases, which produce almost 31 million tons of carbon dioxide, or almost 10% of Australia's reported emissions. The company said its annual emissions will fall from 40 million tons to net-zero for Scope 1 and 2 by the time its coal assets are closed.
Loy Yang has more than 2 gigawatts of capacity and generates almost a third of Victoria's electricity. AGL will be able to supply customers with up to 12 gigawatts of new generation by 2036, requiring an investment of $20 billion $13 billion from its balance sheet, offtakes and partnerships.
The company said it would recognize a $700 million charge related to the early closure of Loy Yang.
Cannon-Brookes Grok Ventures family office praised AGL's commitment to accelerating the timeframe on shutting down its coal plants, but underscored the need for more board members and pointed out the nomination of four new board members to the company's six-person board.
AGL shares rose as much as 3.8% during early trading hours in Sydney and are up 8.1% this year, after four consecutive annual losses that saw the company's value plummet.
None of The Supreme Court Is About to Display Its Power Imbalance Again?