AGL has announced it will advance the targeted closure date of Victoria’s Loy Yang A Power Station – with the new date up to ten years earlier than previously announced – in a bid to accelerate its transition to an integrated low carbon energy leader.
AGL’s annual greenhouse gas emissions are expected to reduce from 40 million tonnes to net zero on achieving targeted closure.
AGL aims to progressively decarbonise its asset portfolio with new renewable and firming capacity, with an ambition to supply its customer demand with up to 12GW of new generation and firming capacity, requiring a total investment of up to $20 billion, in place before 2036, funded from a combination of assets on AGL’s balance sheet, offtakes and via partnerships.
This includes an interim target to have up to 5GW of new renewables and firming in place by 2030.
AGL Chair, Patricia McKenzie, said the new direction was made in response to shareholder demands and a growing appetite for renewable energy.
“We have listened to our stakeholders – in particular, our shareholders, as well as government and energy regulatory authorities. Their views were an important consideration as we reviewed the company’s strategic direction after withdrawing the demerger proposal,” Ms McKenzie said.
“Our purpose in undertaking the review was to consider options for AGL’s future as a strong integrated entity in a way that enhances long-term shareholder value, and to achieve this in a complex energy environment, with increasing pressure to accelerate the pace of decarbonisation while maintaining energy affordability.
“AGL is committing to an ambitious but achievable strategy to deliver a responsible and accelerated low carbon future. We are aiming to reshape our energy portfolio into a cleaner and more flexible one, transitioning away from coal and focusing on new renewable and firming capacity.”
Responding to the news, the Victorian Government has announced it will provide support for the retraining and reskilling of redundant workers at Loy Yang A.
Victorian Minister for Energy, Lily D’Ambrosio, said the news would be difficult for workers at the site.
“This news will be difficult for those who have powered Victoria through Loy Yang A for decades – and as we work with AGL to manage this transition, we’ll be with every worker, every step of the way,” Ms D’Ambrosio said.
“We will work with AGL to help locals retrain, reskill and find new work opportunities close to home as we transition the state to cheap, clean renewable energy.
“Today, we stand with the workers of Loy Yang A as this transition begins, thanking them for their service to Victoria.
“We also acknowledge the ongoing uncertainty for other workers, communities and families in the coal mining sector – as we transition to a clean energy sector, we stand ready to support this industry each and every day.”
Climate Councillor, energy expert and former President of BP Australasia, Greg Bourne, said AGL’s decision reflects the reality of the rapid move towards a 21st century power grid as well as 21st century economics.
“Coal is unable to compete on cost with renewable energy – it is also inflexible, ageing, unreliable and inefficient,” Mr Bourne said.
“In Australia, and globally, renewables backed by storage deliver the cheapest power, and do so without the greenhouse emissions coal and gas produce. To avoid the worsening impacts of climate change, it is critical that we move away from fossil fuels this decade.”
Climate Lead (Australia) at the Australasian Centre for Corporate Responsibility (ACCR), Harriet Kater, said that although AGL is still not on a pathway that is aligned with limiting warming to 1.5C, the decision is a positive development in the right direction.
“The early retirement of Loy Yang forms a significant pillar in AGL’s Climate Transition Action Plan, which will be put to an advisory vote at the company’s 15 November AGM,” Ms Kater said.
“The company has also set an interim target to have 5GW of renewables and firming in place by 2030, surpassing Origin’s recent 2030 commitment of 4GW.
“This builds on what has already been a big year of major climate announcements for ASX-listed companies, with BHP and South32 abandoning the Mt Arthur and Dendrobium mine extensions and Origin bringing forward the closure of Eraring and exiting the Beetaloo Basin.
“These significant developments were born from years of community and shareholder pressure.”
