AGL Energy has stoked speculation it is mulling a demerger or break-up as it grapples with an expected permanent softening in power prices as renewable energy floods the market and customer demand for low-carbon energy accelerates.

The giant electricity and gas supplier will cut spending and costs after posting a $2.29 billion bottom-line loss for the first half, dragged down by heavy write-downs advised last week. Underlying profit for the December half dropped 27 per cent, short of market expectations, and AGL flagged a significantly weaker second half.