AGL business split to silo gas and coal-fired plants

Major energy company AGL has revealed plans to spin its gas and coal-fired power plants into a separate business called PrimeCo under a 'structural separation'. And it is beginning sale processes for assets described as 'less critical to our future direction', including the Newcastle Gas Storage Facility and Queensland's Silver Springs gas project. Filling about 20 per cent of the total electricity demand across the National Electricity Market (NEM), the new PrimeCo business would be Australia’s largest electricity generator supplying major wholesale, industrial and retail electricity users. Meanwhile, a second business -New AGL - is being branded as a multi-product energy retailer, leading the transition to a low carbon future. "The accelerating market forces of customer, community and technology are driving the imperative to create this new path and separate AGL into two distinct organisations," AGL managing director and chief executive officer Brett Redman said. “The proposed structural separation would give each business the freedom, focus and clarity to execute their own respective strategies and growth agendas, while playing an equally important, but different, role in Australia’s energy transition." Mr Redman said New AGL would have a strong, stable and growing customer base, delivering electricity, gas, internet and mobile services to more than 30 per cent of Australian households. “This strong customer base would be backed by a leading energy trading capability and a 2.1 GW portfolio of flexible generation and storage assets to manage peak demand events. And, importantly, New AGL would be carbon neutral for scope one and two emissions on day one, with a clear pathway to full carbon neutrality.” PrimeCo’s first focus would be the safe and reliable running of its generation portfolio, he said. "PrimeCo’s assets are required for network stability and capacity for many years to come, while supporting reliability, affordability and the livelihoods of our people and the communities in which they work," Mr Redmand said. "It would continue to operate these assets safely and efficiently until they are no longer needed or commercially viable, retaining AGL’s commitments not to extend their life or invest in new coal power. "As assets close, these commitments will deliver a step change in carbon emissions reduction. "This will be approximately 20 per cent with the closure of Liddell in 2023, 50 per cent no later than Bayswater’sbackstop closure date of 2035, and fully net zero in 2050 following the closure of Loy Yang no later than 2048. "In the nearer term, PrimeCo would then support the development of low emissions technologies through thedevelopment of its energy hubs and continued operation and development of its wind portfolio."

AGL business split to silo gas and coal-fired plants

Industry Queensland

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