APA chairman rejects shareholder calls for faster climate action

APA Group’s Michael Fraser has rejected calls to speed up Australia’s energy transition, arguing new natural gas supplies will be needed for decades to come.

Basslink pipes traversing across an open paddock.

APA Group chairman Michael Fraser has rejected calls for energy giants to speed up the transition to renewables, arguing new natural gas supplies will be needed to stabilise supply for decades to come.

Addressing shareholders at the company’s annual meeting on Wednesday, Mr Fraser outlined APA’s recent Climate Transition Plan, which includes a goal for its power generation and electricity transmission assets to reach net zero by 2040, and targets a 30 per cent reduction in emissions across its gas infrastructure business by 2030.

A non-binding vote on the plan was put to shareholders, with 21.1 per cent of proxy votes rejecting the plan.

Grilled by shareholders about the company’s role in Australia’s transition to renewables, Mr Fraser said new natural gas supplies were needed to shore up supply until solar, wind and battery storage were supported with emerging fuels such as hydrogen and biogas.

“You look at any of the modelling and there is a critical role for natural gas to play, not only in Australia, but right around the world in getting to net zero by 2050,” he said.

“If people were genuinely interested in reducing emissions, rather than just being ideologically opposed to natural gas, then we would have enough gas to make sure that we can get to net zero a lot quicker than we otherwise would.

“At the end of the day, if we don’t keep energy reliable, and we don’t keep it affordable, then the community will respond to that.

“If we end up with blackouts, and we’re already seeing prices going through the roof on the electricity side of things, then my concern is that mandate, that community support for getting to net zero will be lost.”

APA has been ramping up its investment in renewables in recent years, and owns several wind and solar farm assets across Australia.

It has been shortlisted for a project to build a “renewable energy zone” in NSW and is also eyeing offshore wind opportunities following its $773m acquisition of Basslink, the undersea electricity cable connecting Victoria and Tasmania.

The federal government has proposed areas of Bass Strait among possible sites for the country’s first offshore wind farms, where developers including Star of the South and Corio Generation are working on development proposals.

APA confirmed its acquisition of Basslink, from administrators, late on Tuesday.

Speaking after the annual meeting on Wednesday, APA’s acting chief executive Adam Watson said the deal would enable the company to support the future development of an Australian offshore wind industry.

“In terms of offshore wind farms it is a lot more advanced, for example, in northern Europe, where they’ve got less accessibility on their on the land,” he said.

“Australia’s going to need a mix of that. It’s going to be a mix of onshore wind, it’s going to be a mix of solar. But you can also see a role to play, just given the significance of investment required, for offshore wind.

“The Victorian government and Tasmania have flagged that they’re looking into that, other states are looking at it as well.

“It may be a long term thing, it may not mean that it will accelerate just yet, but ultimately we’re building the capability required to support Australia and our communities with the energy needs to support a transition and that is just another important part of that process.”

APA is looking for a new chief executive following the shock exit of Rob Wheals in August, which coincided with the gas pipeline owner walking away from a plan to enter the US market.

On Wednesday Mr Fraser said the company would now return its attention to a $1.4bn pipeline of growth projects across Australia.

“We know that to meet the growing demand for electrification by 2050, the National Electricity Market is forecast to need to double the amount of electricity it delivers now and

that is a massive task we face as a nation,” he said.

“These circumstances, among other things, influenced our announcement in August to call time on pursuing a US acquisition. Our focus is now solely on the Australian market.”

Originally published as APA chairman rejects shareholder calls for faster climate action