AGL Energy announced a $2 billion loss for the 2021-22 financial year as Australia’s single largest greenhouse gas emitter grapples with how it can transform its business and manage what the switch from fossil fuel base-load to flexible generation.
The deep losses revealed on Thursday serve as an example of the potentially painful transition that large incumbent energy companies face, having long built dominant market positions on the use of fossil fuels, and delayed the inevitable switch to renewables.
AGL, the country’s biggest coal generator and biggest emitter, is in the throes of a complex process of splitting the company into two, creating Accel Energy which will operate its fossil fuel assets and look much like a conventional energy business.
At the same time, a rebranded AGL Australia will retain most of the company’s renewable energy assets and will have a greater focus on the provision of retail services.
“Financial year 2021 was one of the toughest energy markets have seen, wholesale electricity prices were at levels not seen since 2012, while demand was impacted by lockdowns, mild weather and increasing penetration from rooftop solar,” AGL Energy CEO Graeme Hunt said.
AGL said it has progressed plans to build new big battery projects at Liddell, Loy Yang and also Broken Hill, as well as the big battery that it has already committed to building at Torrens Island. AGL is aiming to amass a 850MW battery storage portfolio, repurposing much of the infrastructure being used by existing coal and gas power stations.