AGL’s Titanic coal failure sees it lose more than $2 billion
SYDNEY, Aug 12 2021 - AGL, Australia’s biggest energy company has posted a $2.06 billion full-year loss, which Greenpeace Australia Pacific describes as a “Titanic failure” on the part of the company to navigate the changing energy market.
AGL’s reported underlying net profit dropped 33.5 per cent to $537 million. The reams of red ink on AGL’s book comes after several years of poor performance, which have seen the coal company, which is also Australia’s biggest climate polluter, wipe more than $12 billion in value off its once blue-chip stock as renewables outpace coal in the Australian electricity market.
“Watching AGL fail is like watching the Titanic hit the iceberg, only this time the iceberg’s made of coal,” said Glenn Walker, Senior Campaigner at Greenpeace Australia Pacific.
“AGL’s leadership should have been prepared years ago for the renewable energy transition, but a series of bad captain’s calls from the coal-obsessed leadership team have seen the company double down on its coal-fired power stations – and now investors are paying the price for this poor navigation.”
“AGL and other big energy companies, like Origin and Energy Australia, have written down billions over the last year. That trend is only going to accelerate as even more renewables come onto the grid and the growing gap between cheaper clean energy and coal and gas prices becomes a chasm.
“With AGL’s AGM fast approaching, shareholders should be asking AGL’s leadership the tough questions about whether the company can steer a path towards a renewable future, or whether they’re prepared to go down with the coal ship with Graeme Hunt as captain.”
AGL’s chair Peter Botten, earlier in the year, admitted that he had failed to countenance the speed and scale of the shift away from coal to renewable energy, saying he “didn‘t see quite the level of change and the acceleration of change in my thinking 12 months ago.” The results posted today do not reflect yesterday’s announcement from Tomago Aluminium Smelter, AGL’s biggest customer, that it plans to shift to mostly renewable energy when its contract with AGL’s Bayswater power station ends in 2028.
NOTES TO EDITORS:
Timeline of AGL’s shifting coal fortunes
- 2012 – AGL buys Loy Yang A coal burning power station and the Loy Yang coal mine for more than $500 million.
- 2014 – AGL buys Macquarie Generation from the NSW Government for $1.5 billion and takes control of the Bayswater and Liddell coal burning power stations.
- 2015 – AGL announces plans to close Liddell in 2022
- Since 2015, Liddell, Bayswater, and Loy Yang A power stations have breached their licences 111 times, accounting for roughly three-quarters of all violations committed by coal-burning power stations across the country.
- 2017 – AGL reaffirms plans to close Liddell and sparks a political backlash. Energy Minister Josh Frydenberg seeks advice from AEMO, which warns of a shortfall in supply and blackout risks. The Coalition Government lobbies AGL to extend the life of Liddell or sell it to another company that will keep it open.
- Feb 2021 – In the wake of a multi-billion dollar loss and a share price in freefall, AGL commences a strategic review of its operations, acknowledging the company’s leadership had failed to anticipate and adapt to the rapidly changing energy market.
- Feb 2021 – AGL once again named as Australia’s biggest contributor to greenhouse gas emissions by the Clean Energy Regulator, emitting more than double the climate pollution of the next biggest emitter, Energy Australia.
- March 2021 – The review proposes splitting AGL into two companies. A generating company, Accel Energy to hold the coal and gas assets and a second retail company, AGL, to hold AGL’s few renewable assets and the firm’s telecommunications business.
- April 2021 – Less than a month after the demerger proposal, Brett Redman resigns as CEO with immediate effect.
- June 2021 – AGL sues Greenpeace Australia Pacific for copyright and trademark infringement after the launch of a campaign rebranding AGL as “Australia’s biggest climate polluter”. AGL loses the case with Federal Court Justice Burley finding copyright protects an owner’s interest in his or her work but it does not protect brand reputation.
- June 2021 – AGL’s demerger plans are announced, and are widely criticised by investors.
- 11 August 2021 Australia’s biggest energy user and AGL’s biggest customer, Tomago Aluminium, announces plans to source the vast majority of its power from renewables by 2030. Tomago buys around half of the power generated by AGL’s Bayswater power station and losing Tomago as a customer would likely lead to the early closure of Bayswater, which is currently slated for closure in 2035.
- 12 August 2021: AGL posts a full-year loss of $2.06 billion