August 5, 2020 Read More →

Shareholders to push Australia’s AGL Energy for quicker coal power exit plan

Renew Economy:

AGL Energy will face increased pressure from shareholders to accelerate the closure of two of its largest coal-fired power stations, including the Bayswater power station in NSW and the brown coal fueled Loy Yang A power station in Victoria.

A shareholder motion calling for the expedited closure timeline has been lodged by shareholder advocacy group Australasian Centre for Corporate Responsibility (ACCR), which has cited AGL’s own modelling which suggests that in order to meet goals to limit global warming to 1.5 degrees, the power stations need to close by 2036.

AGL has indicated that it expects to close the 2,225MW Loy Yang A power station, one of Australia’s most emissions intensive power stations and one of only a few remaining that still uses brown coal, in 2048.

AGL also operates the 1,680 megawatt Liddell power station, which is scheduled to close in April 2023. In the past year, more than 80 per cent of its power supply came from coal.

Of particular concern to the shareholder group is AGL’s growing expenditure on “sustaining” its existing power station assets, which has increased from an estimated $154 million in 2013, to an expected $592 million in 2020, an almost four-fold increase.

“Investors must question whether this expenditure is in the long-term interests of shareholders,” ACCR’s director of climate and environment Dan Gocher said. “Prudent capital allocation is a fiduciary responsibility of AGL to its investors. ‘Sustaining’ capital expenditure has grown from 25% of total capital expenditure in FY2013 to 72% (estimated) in FY2020. This allocation of capital expenditure suggests AGL is maintaining its coal-fired power stations at the expense of accelerating its transition.”

[Michael Mazengarb]

More: AGL faces call from activist shareholders to accelerate exit from coal power

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