Australia’s largest energy company splits in two to deal with falling energy prices

Australia’s largest energy producer and retailer, AGL Energy will be split into two new companies with separate focus on energy production and retail.

Announced changes on March 30 AGL Said It will be split into the new AGL and will handle the multi-product retail side of AGL, including the provision of electricity, gas, internet and mobile services to over 30% of Australian households.

The other half, PrimeCo, will be responsible for AGL’s portfolio of approximately 11.2 GW of electricity. This is 20 percent of total capacity in Australia’s national electricity market.

Brett Redman, Managing Director and CEO of AGL, said by splitting into New AGL and PrimeCo, “giving each business the freedom, focus and clarity to implement their strategies and growth agendas, while at the same time being equally important. But the role in Australia’s energy transition is different. “

The split deadline is set at the end of fiscal year 2021, and AGL said it would immediately begin a process of collaboration with governments, shareholders and regulators to confirm the nature and timing of the proposed restructuring.

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AGL power plant on Torrens Island, Adelaide, November 4, 2019. (AAP image / Kelly Burns)

The decision came after a surge in renewable energy sources caused a significant drop in electricity prices, causing the company’s profits to decline, with a base profit of $ 317 million in the first half (244,300). It was (10,000 dollars). Fiscal year 2021.

This is a 27 percent decrease from the previous year.

Also, in the media release (PDFOn February 4, AGL recognized charges of nearly $ 2.7 billion (US $ 2.1 billion), primarily due to falling wholesale electricity prices.

AGL believes that the restructuring will support the growth of the two organizations and their respective businesses, while at the same time addressing the promotion of Australia’s transition to renewable energy sources.

Score Australian person According to reports, the company will help address the growing pressure of operators to reduce carbon emissions and gain a reputation as a more environmentally friendly energy operator.

In recent years, AGL has gradually moved away fossil fuel generators, including the planned closure of the Liddel coal-fired power plant in 2023, to redevelop existing generators as alternatives to lower carbon emissions. I promise.

The new restructuring means that AGL retailer New AGL will achieve near-perfect carbon neutrality and emissions figures will be diverted to the energy production sector PrimeCo.

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An overview of the Liddell coal-fired power plant in Muswellbrook, Hunter Region, New South Wales, April 22, 2018. (AAP image / Dan Hinbrecht)

Meanwhile, PrimeCo bears the brunt of AGL’s position as Australia’s largest source of carbon emissions, reported at 42.2 million tonnes between 2019 and 2020.

AGL also promised to invest in turning an existing power plant into a “future energy hub.” This includes funding a total of 1,600 MW of wind development pipelines.