AGL announces intention to create two leading energy businesses
AGL today announced its plans to create two leading energy businesses focused on executing distinct strategies, via a structural separation1:
- “New AGL” Australia’s largest multi-product energy retailer, leading the transition to a low carbon future; and
- “PrimeCo” Australia’s largest electricity generator, supporting our economy as the energy market evolves
Attached is a copy of the presentation and speeches being presented at AGL’s Investor Day today, which provides an update on the review of AGL’s business model and capital structure.
AGL Managing Director and CEO, Brett Redman, said that the proposed separation builds on AGL’s heritage of innovation, investment and structural adaptation to meet the needs of a dynamic industry.
“For more than 180 years, AGL has led Australia’s energy sector, evolving and innovating to better serve our customers and communities, and to return value to shareholders,” Mr Redman said.
“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.
“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 be Australia’s largest multi-product energy retailer by number of services to customers, leading the transition to a low carbon future.
“New AGL would have a strong, stable and growing customer base, delivering electricity, gas, internet and mobile services to more than 30 percent of Australian households,” Mr Redman said.
“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.”
Generating approximately 20% of the total electricity demand across the National Electricity Market (NEM), PrimeCo would be Australia’s largest electricity generator supplying major wholesale, industrial and retail electricity users.
“PrimeCo’s first focus would be the safe and reliable running of its generation portfolio. As the low-cost backbone of the NEM it would be well positioned from day one to support the Australian economy as the energy market continues to evolve,” Mr Redman said.
“PrimeCo’s strong base generation position brings with it a capacity to invest in development options including the transformation of existing generation sites into the energy hubs of the future, as well as development of its 1,600 MW wind development pipeline.
AGL will immediately commence a process of engaging with shareholders, regulators, government and workforce stakeholders with a view to confirming the timing and nature of the proposed structural separation by end of FY21. The proposed separation is subject to this consultation process and to ongoing internal AGL analysis.
Authorised for release by AGL’s Board of Directors.
For more information, download the ASX & Media Release.
1 The company names “New AGL” and “PrimeCo” are project names and the icons and logos have been created for the purpose of illustration only.