Doubts remain as AGL embraces costly transition to energy future

Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 22 : 1-Nov-19

Macquarie Wealth Management has reiterated its ‘underperform’ rating on AGL Energy, following the power company’s annual investor briefing. Analysts note that AGL will have to spend billions on clean energy sources to replace the coal and gas-fired power stations that it intends to close over the next few years. RBC Capital Markets has a ‘sector perform’ recommendation on AGL, with analyst James Nevin saying AGL appears to be positioning itself to respond to the changing and uncertain market.

CORPORATES
AGL ENERGY LIMITED – ASX AGL, MACQUARIE WEALTH MANAGEMENT, RBC CAPITAL MARKETS

Don’t extend coal power plants: Origin

Original article by Perry Williams
The Australian – Page: 17 & 26 : 25-Oct-19

Frank Calabria will use a speech to a Committee for Economic Development of Australia lunch in Sydney on 25 October to warn against extending the life of coal power plants without the government providing a ‘carbon signal’. Calabria, who is the CEO of Origin Energy, will also call for an end to the ongoing energy war. He will say that the government needs to put an end to ‘quick fixes’ so far as the energy policy ‘puzzle’ is concerned, and focus instead on long-term solutions.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, AGL ENERGY LIMITED – ASX AGL, COMMITTEE FOR ECONOMIC DEVELOPMENT OF AUSTRALIA

Older coal-fired power stations are better bet

Original article by Simon Evans
The Australian Financial Review – Page: 11 : 11-Oct-19

Trevor St Baker contends that there is no ‘natural life’ for a coal-fired power station. St Baker, who was speaking at a national energy summit on 10 November, is the co-owner of the coal-fired Vale power station in New South Wales; he says keeping such stations operating for longer is better than taking a gamble on new technologies such as high-efficiency low emissions plants or carbon capture and storage. Tony Wood from the Grattan Institute told the summit that coal-fired power stations should be allowed to reach the end of their natural life.

CORPORATES
GRATTAN INSTITUTE, AUSTRALIAN ENERGY COUNCIL

Band-Aid plans to push up power bills

Original article by Mark Ludlow, Angela Macdonald-Smith, Natasha Gillezeau
The Australian Financial Review – Page: 7 : 23-Aug-19

Claims that Australia could suffer from power blackouts during the 2019-20 summer reflect the need for a co-ordinated national energy policy, according to Energy Users Association of Australia CEO Andrew Richards. He says asking big power users to again take part in voluntary load shedding to help prevent blackouts represents a "Band-Aid on top of another Band-Aid". His comments regarding the need for a co-ordinated energy plan have been echoed by ERM Power CEO executive Jon Stretch.

CORPORATES
ENERGY USERS ASSOCIATION OF AUSTRALIA, ERM POWER LIMITED – ASX EPW, AGL ENERGY LIMITED – ASX AGL

AGL eyes alternatives as Vocus off the table

Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 17 & 20 : 9-Aug-19

AGL Energy has posted a 2018-19 net profit of $905m, which is 42.8 per cent lower than previously. Its underlying profit after tax rose by 2.2 per cent to $1.04bn. AGL has forecast that its profit will be within the range of $780m and $860m in 2019-20, citing factor such as lower electricity prices, higher fuel costs and the impact of an outage at its Loy Yang A generator in Victoria. Meanwhile, CEO Brett Redman says AGL remains open to expanding into the data services sector, despite abandoning a bid for Vocus Group earlier in 2019.

CORPORATES
AGL ENERGY LIMITED – ASX AGL, VOCUS GROUP LIMITED – ASX VOC, PERTH ENERGY PTY LTD, VERTIUM ASSET MANAGEMENT PTY LTD, JP MORGAN AUSTRALIA LIMITED, CITIGROUP PTY LTD

AGL under pump to hasten coal closures

Original article by Perry Williams
The Australian – Page: 27 : 18-Jul-19

Market Forces will press for AGL Energy to close its Loy Yang A and Bayswater coal-fired power stations ahead of schedule. The environmental activist group will put a resolution to AGL’s annual meeting in September, calling for both plants to be shut down in 2030. Will van de Pol of Market Forces says AGL’s plans to keep the plants operating well beyond this date are at odds with its stated support for the Paris climate agreement. Loy Yang A is slated to close in 2048, and Bayswater is due to be shut down in 2035.

CORPORATES
AGL ENERGY LIMITED – ASX AGL, MARKET FORCES, ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, MACQUARIE GROUP LIMITED – ASX MQG, INVESTOR GROUP ON CLIMATE CHANGE

Renewables well short of the electricity target

Original article by Adam Creighton
The Australian – Page: 2 : 12-Jul-19

Tony Wood from the Grattan Institute expects Australia’s Renewable Energy Target of 33GWh by 2020 to be met, despite the release of data showing that solar and wind power accounted for just 15 gigawatt hours of total electricity generation in 2018-19. Wood notes that uncertainty surrounding the RET has caused investment in renewables to be delayed, but he says separate data shows that such investment in renewables is slated to increase during 2019-20.

CORPORATES
GRATTAN INSTITUTE, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIAN ENERGY REGULATOR, AUSTRALIAN ENERGY COUNCIL

Hydro project wins $610m federal loan

Original article by Mark Ludlow
The Australian Financial Review – Page: 8 : 12-Jul-19

Genex Power will receive a $610m loan from the Northern Australia Infrastructure Facility for its proposed pumped hydro project in Queensland. NAIF CEO Laurie Walker notes that the project will provide northern Queensland with an additional 250 megawatts of power, with EnergyAustralia in the process of concluding a deal to receive electricity from the project. The concessional loan is the largest allocation made by the $5 billion NAIF to date.

CORPORATES
GENEX POWER LIMITED – ASX GNX, NORTHERN AUSTRALIA INFRASTRUCTURE FACILITY, ENERGYAUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE ENVIRONMENT AND ENERGY, J-POWER AUSTRALIA PTY LTD, QUEENSLAND. DEPT OF ENERGY AND WATER SUPPLY

Consumers flick the switch to lower bills

Original article by Perry Williams
The Australian – Page: 2 : 28-Jun-19

One in four Australians have changed their electricity provider in the last year, according to the Australian Energy Market Commission. Electricity retailers AGL Energy, EnergyAustralia and Origin Energy no longer hold the biggest market share in South Australia and south-east Queensland, while the average median household bill ‘offer’ declined by between two and four per cent in New South Wales in the year to March, seven per cent across south-east Queensland, and up to four per cent in Victoria.

CORPORATES
AUSTRALIAN ENERGY MARKET COMMISSION, AGL ENERGY LIMITED – ASX AGL, ORIGIN ENERGY LIMITED – ASX ORG, ENERGYAUSTRALIA PTY LTD

AGL under pressure to explain Vocus takeover

Original article by Lucas Baird, Simon Evans
The Australian Financial Review – Page: 15 & 22 : 12-Jun-19

Vocus Group has agreed to allow AGL Energy to commence due diligence after offering $4.85 per share for the telco. AGL investors have responded bearishly to the $3bn bid, with its share price falling 7.2 per cent to $19.40 on 11 June. Sentiment toward AGL was also affected by an earnings downgrade on 7 June, before the stock market closed for a long weekend. Justin Braitling of Watermark Funds Management and James Nevin of RBC Capital Markets have questioned whether Vocus is an appropriate target for AGL.

CORPORATES
AGL ENERGY LIMITED – ASX AGL, VOCUS GROUP LIMITED – ASX VOC, WATERMARK FUNDS MANAGEMENT PTY LTD, RBC CAPITAL MARKETS, EQT INFRASTRUCTURE, M2 GROUP LIMITED