AGL Energy fine-tunes new strategy after dumping demerger
Following the dumping of its demerger plan, AGL Energy has fine-tuned the focus of its new strategy including a reassessment of its decarbonisation plans.
AGL Energy has fine-tuned the focus of its new strategy, including a reassessment of its decarbonisation plans and which existing strategies may be halted after its planned demerger was foiled by billionaire Mike Cannon-Brookes.
The power giant, chaired by Peter Botten, dumped its planned split into retail and generation units on May 30 amid calls from Mr Cannon-Brookes for a swifter exit from coal and move towards Paris-aligned climate goals.
AGL directors Vanessa Sullivan and Graham Cockroft were handed oversight of a strategic review of the company and have now been joined by fellow board member, Mark Bloom, to reboot the company’s strategy.
In a letter to shareholders on Thursday, AGL said the review would focus on four key areas including a review of the existing strategies it had developed for AGL Australia, with its customer base of 4.5 million, into a newly listed retail-focused company, and the coal generator Accel Energy.
The review will consider strategies “developed for AGL Australia and Accel Energy and defining key strategic initiatives which will be retained, reviewed or stopped.”
Australia’s largest polluter will also reassess its decarbonisation strategy and analyse the scale and mix of energy supplies needed to meet carbon reduction goals. An assessment of AGL’s capital structure and financiers will also be part of the review.
An update will be provided at the company’s annual results in August with the initial outcomes of the review to be presented to investors in September.
Mr Botten – who along with chief executive Graeme Hunt will step down once replacements are found – conceded the volatile energy market had posed extra challenges.
“The complexity of the context in which we are operating cannot be underestimated. Even in the year since we first announced our proposal to demerge, the Australian energy market has experienced substantial shifts. Australia is now facing a market with tight gas supply, rising wholesale gas and electricity prices and increasing costs of energy for both households and businesses,” Mr Botten said.
Mr Cannon-Brookes, the co-founder of Atlassian, had initially pushed for two board roles but subsequently said one director position would suffice amid opposition from some shareholders.
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