Mike Cannon-Brookes' AGL move explained

Mike Cannon-Brookes' AGL move and what it means for jobs

Tech billionaire Mike Cannon-Brookes has fired up Australia’s energy debate, after proposing to buy AGL, shut its coal-fired power stations by 2030 and transition it to net zero emissions by 2035. A consortium fronted by Mr Cannon-Brookes offered $8bn to buy the company including debt, and an additional $20bn to help transition away from coal.

The Atlassian co-founder said the takeover would be “one of the biggest decarbonisation projects on earth”, swapping seven gigawatts of coal-fired generation with 8GW of green power.

Where did this all begin?

The 180-year-old Australian energy company represents more than 20 per cent of National Electricity Market generation supply.It was named the nation’s biggest corporate polluter by the Australian Government's Clean Energy Regulator in February 2021.Last year, the company voted to split itself in half: a green retailer named AGL Australia and a coal-dominated generator Accel Energy.

What are the consortium's AGL plans?

What about coal jobs?

A “fact sheet” provided to The Daily Telegraph, however, revealed just 600 roles would be ongoing after construction. The consortium said a total of 1000 people worked at AGL’s coal-fired plants at Bayswater in NSW and Loy Yang A in Victoria. AGL contested this, claiming the number was closer to 1800 full-time employees.

The proposal and rejection

AGL CEO Graeme Hunt said the consortium’s plans “ignore the reality” of the nation’s electricity grid. Hunt suggested $30bn was required to replace the current system with renewables effectively.

Mr Cannon-Brookes is undeterred and hasn’t ruled out pushing AGL’s board into further talks. The energy company is facing mounting pressure, as renewables become cheaper and shareholders demand cleaner energy.

What's the government view?

Is coal power more reliable?

The private market is stepping up and providing that replacement capacity exactly as asked, and on an earlier schedule, which will result in lower power prices for all of those customers. I assume [Mr Morrison] will be very happy with that.

Michael Cannon-Brookes “

Do Australians want climate change action?

82 per cent support the phasing-out of coal-fired power stations. 75 percent are concerned about climate change. Six in 10 support a ban on new coal mines. Source: Lowy Institute's 2021 Climate Poll

Words: John Rolfe Eric Johnston Perry Williams Bianca Farmakis Producer: Bianca Farmakis Read more

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Mike Cannon-Brookes' AGL move and what it means for jobs

EXPLAINER

EXPLAINER

The Atlassian co-founder said the takeover would be “one of the biggest decarbonisation projects on earth”, swapping seven gigawatts of coal-fired generation with 8GW of green power.

Here’s what you need to know.

Where did this all begin?

Before COP26 last year, a team called Project Arise planned the world's largest decarbonisation project. The project, between Cannon-Brookes, his wife Annie’s company Grok Ventures and Canadian asset manager Brookfield, formed a consortium to offer to buy AGL.

What is AGL?

What are the consortium's AGL plans?

What about coal jobs?

Cannon-Brookes said his goal was to offer AGL's coal workers the chance to stay with a green company. Many of the new jobs would be in the same spot as its existing plants.In a letter to AGL shareholders, of the 12,000 proposed jobs, 10,000 would be in construction.

The permanence problem

The proposal and rejection

AGL CEO Graeme Hunt said the consortium’s plans “ignore the reality” of the nation’s electricity grid. Hunt suggested $30bn was required to replace the current system with renewables effectively.

AGL's response

Hunt also said the consortium will need to boost its takeover bid by at least another $1bn, proposing a 30 to 40 per cent premium on the share price. Originally, the consortium offered a 5 per cent premium.

Mr Cannon-Brookes is undeterred and hasn’t ruled out pushing AGL’s board into further talks. The energy company is facing mounting pressure, as renewables become cheaper and shareholders demand cleaner energy.

What's the government view?

Analysts say the Morrison government is likely to stage an intervention if the consortium wins control of AGL Energy unless undertakings are made that replacement capacity be developed prior to retiring plant.

Prime Minister Scott Morrison has warned the move could “threaten” power supply and increase energy costs.

Is coal power more reliable?

Cannon-Brookes argues fossil fuels are increasingly unreliable and power costs have fallen in the last eight years due to a major increase of renewable energy into the gridThe Morrison Government had also called on private investors to replace coal plants, he said.

The private market is stepping up and providing that replacement capacity exactly as asked, and on an earlier schedule, which will result in lower power prices for all of those customers. I assume [Mr Morrison] will be very happy with that.

Do Australians want climate change action?