By Michelle Slater
The operator of the Loy Yang A power station is forging ahead with a demerger plan which includes splitting the company’s coal fleet into a separate entity to be called Accel Energy.
AGL unveiled further details last week on how it would hive itself off into two companies expected to take place in the fourth quarter of 2022, subject to shareholder and regulatory approvals.
The carbon-neutral retail arm will be renamed AGL Australia selling electricity, gas and telecommunications.
Accel Energy – initially touted to be dubbed PrimeCo – will focus on baseload power with plans to transition its emissions-heavy sites to low-carbon industrial energy hubs.
At Loy Yang A, this includes previous announcements for a grid-scale battery as well as the coal-to-hydrogen program, but could also include floating solar and ammonia and fertiliser production.
The transformation of these sites is hoped to relieve remediation costs as the company’s fleet of coal and gas plants gradually close.
However, AGL did not reveal any changes to the forecast operation of Loy Yang A to 2048, but left the door open with the onset of changes in the market.
Accel Energy will also unveil a carbon transition statement highlighting its role in an “accelerating energy transition and commitment to publishing progressive decarbonisation targets”. This climate change roadmap will contain specific decarbonisation targets of 23 per cent emissions reductions by 2024, then onto 60 per cent by 2036, and net zero by 2050.
“We will continue to run our coal-fired power plants safely and responsibly, recognising their critical role in supporting renewables while alternative sources of energy storage and supply are fully developed,” shareholder documents state.
“We welcome the community expectations and technological developments that are driving change and believe these forces will result in coal-fired power stations operating less and closing earlier.”
It also acknowledged the company’s “need to take action on climate change was intensifying” as the pace of transition was accelerating.
“As Australia’s largest emitter of greenhouse gases and largest electricity generation company, we embrace the responsibility and opportunities this brings to reinvent our business as the community’s reliance on thermal power reduces and, ultimately, ends,” the documents said.
“We believe we have a unique opportunity to drive the accelerating transition while creating a sustainable future for our business and the communities in which we operate beyond the life of coal-fired power.”
Accel will be headed-up by new board chair Peter Botten, with Graeme Hunt to become new chief executive and managing director.
The board stated it believed proceeding with the proposed demerger would “be in the best interests of shareholders, protecting value and providing greater strategic focus”.
Mr Botten said the impact of recent challenging market conditions on financial performances emphasised that AGL was now at an “inflection point”.
He said this was being driven by the accelerated transition of the energy sector driven by the rapid uptake in renewables and decentralised energy technology, and customer and community expectations.
By Michelle Slater