(Australian Associated Press)
One of Australia’s oldest energy providers, AGL, wants to split its business in two as it comes under increasing pressure to move to clean energy.
AGL, which has traded for more than 180 years, on Tuesday unveiled plans for a “New AGL” business focused on low carbon-emitting technologies offering consumers electricity, gas, internet and mobile services.
The other business – dubbed PrimeCo – would continue operating its coal-fired power stations to generate electricity.
AGL has the coal-fired Bayswater and Liddell power stations in NSW, and Loy Yang stations in Victoria.
The gas-fired power station on Torrens Island, South Australia, has also been controversial for its environmental impact.
There are plans to build grid-scale batteries at each site, which will provide clean energy.
PrimeCo would mostly serve wholesale and industrial customers, and be less consumer-focused.
Chief executive Brett Redman said concerns about climate change, shifts in government policy and cheaper technology had changed the electricity market.
He said structural separation would give each business the freedom to execute its own strategies.
The Australasian Centre for Corporate Responsibility’s Dan Gocher was sceptical of the proposal.
He said any responsible investor would surely avoid PrimeCo, due to its coal-fired power stations.
“The demerger does nothing to reduce emissions, but it may appease some institutional investors who have been demanding AGL do something to reduce its carbon exposure,” he said.
The splitting of the business will need shareholders and regulators to approve.
The New AGL and PrimeCo names may not become the ongoing names of the businesses.
In February, AGL posted a first-half loss of $2.4 billion, mostly due to legacy contracts to support wind farms which cost the company more than they were worth.
Shares were down 3.39 per cent to $9.82 at 1535 AEDT.