Australia’s largest electricity generator, AGL Energy, has posted a $1.3 billion (US$850 million) statutory loss for the 2023 financial year (FY), following a $860 million profit the previous year.
About half of the loss was due to the reduction of asset value due to the earlier closure dates of its coal plants in line with its accelerated decarbonisation plan.
This includes the planned closure of the Liddell coal-fired power station, which reached the end of its technical life after 52 years of service.
Other plans to decommission traditional power plants include closing South Australia’s gas-fired Torrens Island B by 2026, nearly a decade ahead of its previous schedule.
But despite the statutory loss, AGL reported an underlying profit of $281 million, up 25 percent on the 2022 financial year. It announced a final dividend of 23 cents per share, more than doubling its 10 cents dividend last year.
The company also expects its underlying profit to grow, posting guidance of between $580 and $780 million for the following 12 months.
AGL CEO Damien Nicks said the result reflected a solid second half after a challenging start to the year.
“We saw a significant improvement in plant availability as the year progressed, which contributed to the increase in earnings compared with FY22, along with the strong performance of our well risk managed gas portfolio and customer business,” Mr. Nicks said.
Renewable Energy Push Affecting Cost of Living
Australia has ramped up its energy transition to net zero despite concerns about the closures of traditional power stations despite lacking the equivalent renewable energy generation to replace it.With the accelerated transition, in addition to factors such as international demand for energy, Australians have been facing surging electricity prices in response to volatile wholesale energy costs since 2022.
“We recognise that many Australians are struggling with broad cost of living pressures, including rising energy prices,” Mr. Nicks said.
“We are committed to supporting our customers during this difficult time and will spend at least $70 million over the next two years to help our customers to manage cost of living pressures.”
“FY23 was a year of significant transformation in which we reset market and stakeholder confidence and progressed our strategy to connect our customers to a sustainable future and transition our energy portfolio,” Mr. Nicks said.
“Our refreshed strategy and Climate Transition Action Plan were endorsed at our annual general meeting in November 2022.
Energy Transition Concerns
AGL Energy is not the only energy company targeted by climate change advocates. Asset manager Brookfield attempted to take over Sydney-based Origin Energy, one of Australia’s largest energy suppliers, to force a quicker net-zero transition.Brookfield previously partnered with Mr. Cannon-Brookes to buy out AGL but later withdrew, leaving Mr. Cannon-Brookes alone to advance the climate agenda within the company.
The combined pressure from climate corporate activism on Australian energy providers has ushered in major investments in renewable generators like solar panels, wind turbines, and battery storage.
However, one of the primary concerns is whether an electricity grid backed largely by intermittent energy sources—meaning they are dependent on weather—can support the needs of Australian households and businesses.
A drop in solar generation due to the winter weather and loss of generation due to the closure of the Liddell power plant were contributing factors to rising prices.
