AGL: Trevor St Baker: Cannon-Brookes lacks energy experience
Trevor St Baker has branded fellow billionaire Mike Cannon-Brookes a ‘software nerd’ without the energy experience to reshape AGL Energy.
Trevor St Baker has branded fellow billionaire Mike Cannon-Brookes a “software nerd” without the energy experience to reshape AGL Energy following the high-profile defeat of its demerger plan.
The Queensland energy veteran, with investments in both coal generation and green start-ups, has been at odds with Mr Cannon-Brookes for several years after the Atlassian co-founder questioned whether his claim of being the country’s largest renewable investor was correct.
Mr Cannon-Brookes used his newly gained 11.3 per cent stake in AGL to defeat a controversial demerger this week and has urged the company’s board to accelerate a move to renewables and dump its coal plants early to meet Paris climate goals.
However, Mr St Baker said the technology titan was misguided. He said he was disappointed that half of the company’s board – including chief executive Graeme Hunt and chairman Peter Botten – would leave AGL after dumping the planned restructure, amid broader shareholder pressure.
“Hunt and Botten had to resign from AGL because of pressure from a software nerd,” Mr St Baker told The Australian.
“If a software nerd knows anything about power generation – give me a break.”
Mr Cannon-Brookes, valued at $26.2bn by The List – Australia’s Richest 250, plans to transform his family investment vehicle Grok into the country’s first $2bn venture capital fund, which would invest in climate-change-focused companies and ventures.
His investments include Australia’s biggest renewable energy project, Sun Cable, a giant solar and battery export scheme in the Northern Territory that will run for 70 years.
Grok has floated a proposal for AGL to phase out coal by 2035 and make green loans available to customers to switch their households to 100 per cent renewable electricity.
But Mr St Baker, who owns half of the Vales Point coal-fired power station in NSW’s Hunter Valley, said it was critical that coal plants remained in the grid to stabilise the system.
Station breakdowns and outages across NSW, Victoria and Queensland including Vales Point have contributed to the current spike in wholesale power prices.
“This is the ultimate wake-up call we’ve been waiting for,” Mr St Baker said.
“There is no way that prices are going to come down now.
“Starving the coal-fired power stations of coal and allowing them to close early before replacement generation is in place is madness.”
Origin Energy contributed to the power sector’s woes after slashing its energy markets earnings forecast for 2022 by a quarter and withdrawing earnings guidance for the 2023 financial year amid huge volatility in electricity markets and coal supply problems at its Eraring plant in NSW.
AGL may now be better positioned than its main rival if it could sort out its leadership issues, Morgans said.
“Despite the defeat of its demerger, AGL’s leadership issues could be easier to resolve than Origin’s coal shortage,” Morgans analyst Max Vickerson said.
The power giant may be able to harness its fixed-cost coal fleet to its advantage, the broker added.
“We think what’s more important is the company’s mostly fixed fuel costs that will insulate it from the worst of the shortage that is driving up energy prices globally.
“Mike Cannon-Brookes is right to question the view that the coal plants will run for decades more but we imagine the remaining 88.7 per cent of shareholders will expect AGL to deliver the energy that the market is desperate for right now,” Mr Vickerson said.
“If the revamped board can deliver a practical and convincing plan – that there is a bridge between the coal-heavy business now to a Paris-aligned, low carbon future – then we expect the market to respond very positively.”
Two AGL board directors, Vanessa Sullivan and Graham Cockroft, are overseeing a hastily announced strategic review. AGL has reached out to Mr Cannon-Brookes for a meeting.
AGL rose 0.1 per cent to $8.73 on Thursday. The shares have risen 38 per cent this year.