Australia’s biggest greenhouse gas emitter AGL Energy has released its first climate action plan as it fast-tracks the closure of one of its coal-fired power stations.
AGL says it has been at the forefront of energy innovation in Australia for 185 years, from lighting the first gas street lamp in Sydney in 1841 to becoming the nation’s largest private investor in renewable energy.
But Australia’s largest electricity generator has faced a shareholder revolt led by billionaire Mike Cannon-Brookes for going too slow in exiting coal and gas, before mapping out a new future in a strategic review and climate transition action plan released on Thursday.
The closure of Loy Yang A power station has been brought forward by a decade to 2035, which AGL said would avoid up to 200 million tonnes of greenhouse gases being emitted compared to previous timelines.
The closure of Victoria’s ageing coal-fired plant, which provides almost a third of the state’s electricity when not suffering outages, is the biggest contributor to the climate plan that shareholders will vote on in November.
Another new milestone is an interim target of five gigawatts of renewables running by 2030, up from the 3.2GW already in the pipeline, and topping Origin Energy’s 2030 commitment of 4GW.
All coal-fired electricity generation will cease by 2035, with the exit of the NSW Bayswater plant in the Upper Hunter Valley still on for 2033 and Liddell already scheduled to shut next year and be replaced by a big battery.
AGL pledges to be “net zero” from operations when all AGL’s coal-fired power stations are closed by 2035.
“We’re going to have to work very, very closely with state and federal governments over the coming years to transition our workforce to reskill,” AGL’s interim CEO Damien Nicks said on a conference call.
“And hopefully as we transition the sites, we can utilise as much of that workforce as we possibly can with those new technologies.”
Next year’s closure of Liddell will be the first site to be rehabilitated, and that “template” would be rolled out to other assets, working closely with communities.
The move to more solar, wind and big batteries will require a total investment of up to $20 billion before 2036, which investors would be more willing to back under the new approach, Mr Nicks said.
Mr Cannon-Brookes’ Grok Ventures investment firm said there was still a lot of detail to come.
As the leading energy company in Australia and largest emitter, AGL needs to assume a leadership position on the Paris goal of keeping global warming below 1.5 degrees, a Grok spokesman told AAP.
“On first appearance, it doesn’t seem to align with Paris, which AGL’s own shareholders voted for at last year’s AGM,” he said.
AGL’s accelerated plan for net zero emissions follows other major climate announcements for ASX-listed companies, with BHP and South32 abandoning the Mt Arthur and Dendrobium coal mine extensions.
Origin has fast-tracked the closure of Eraring – Australia’s biggest coal-fired power plant – at Lake Macquarie in NSW and this month offloaded its stake in developing the gas-rich Beetaloo Basin.
“These significant developments were born from years of community and shareholder pressure,” Australasian Centre for Corporate Responsibility (ACCR) climate lead Harriet Kater said.
“And is evidence that active engagement strategies, pursued by major shareholders, can have material emissions outcomes in the real world,” she said.