How a tech billionaire is forcing Australia's coal die-hards to face the future & More News Here

Australian software program billionaire Mike Cannon-Brookes made a dramatic $660 million market raid on Australia’s largest coal generator and polluter AGL this week, vowing to oppose its proposed demerger and fasttrack its exit from coal.

Grok Ventures, the non-public funding agency of Cannon-Brookes and his spouse Annie, employed brokers to stand in the market late Monday to snap up an 11.28% voting stake, which can be sufficient to thwart the demerger at the upcoming shareholder assembly in June.

Of all the issues which have and can be stated about Cannon-Brookes and his landmark siege of AGL, the one which appears to get underneath his pores and skin the most is the declare that he is the individual accountable for the early closure of Australia’s coal turbines.

It’s an assault line that is readily deployed by fossil gas lobbyists and Coalition conservatives, for those who’ll excuse the tautology, as a result of there is nothing really easy as throwing darts at somebody if you end up attempting to disguise a full stuff up.

It suits with the rhetoric that it is the internal metropolis elites which are meddling with the futures of coal trade workers, not international financial, know-how and environmental components. And it annoys the heck out of Cannon-Brookes.

“The thing I push back on is people say like, ‘Oh, Mike wants to shut down the plants’,” Cannon-Brookes advised RenewEconomy in an interview earlier this week.

“I’m like, let’s be clear right here: These crops are shutting down.

“That makes me want to question how we do that, how we do it in a way that keeps prices down, how we do it in a way that values the workers that work there and doesn’t just throw them on the street, how we do it in a way that can be financed and managed to transition in a more stable sense.”

Cannon-Brookes says the final coal unit must be closed by 2035 at the newest, and large efforts made to be sure that the alternative capability – renewables and storage – is delivered by then.

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“There’s a number of reasons we need to get it done,” Cannon-Brookes says.

“Certainly the local weather science would say that it wants to be performed way more quickly than the firm’s present closure date of 2045. And the financiers would say it wants to be occurred way more quickly than that.

“Find me a mannequin exterior of AGL that exhibits that these crops are in any method in a position to be run in 2045. There is additionally the case that… attracting capital requires you these days to have a plan that is considerably aligned to numerous international local weather agreements.

“That would necessitate, in my understanding, 2035 is probably the outside date and you need a really credible plan to say that that’s the last day, when the last unit of the last coal plant will be shut down.”

AGL paints this an excessive place. But it’s not bought many supporters of that view.

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After all, the NSW Coalition authorities is engaged on the assumption that every one of the state’s black coal turbines (together with AGL’s Bayswater) can be closed in a decade, which is why it is engaged on a renewable infrastructure plan that may doubtless end up to be one among the most vital and fast transitions in the western world.

And the Australian Energy Market Operator’s newest planning doc, often called the Integrated System Plan, assumes that every one brown coal turbines (together with AGL’s Loy Yang A) may even be gone inside a decade.

It’s vital to be aware that AEMO’s state of affairs planning is endorsed by the overwhelming majority of the power trade, and a rising quantity imagine the transition will – and should – be even faster than that.

But not AGL. Its marketing strategy assumes Loy Yang A will hold producing, and polluting, for one more 13 years, till 2045. It needs to cut up the enterprise into two to handle the transition at its personal velocity.

Cannon-Brookes says this place is fully untenable, given what is at stake for workers, the surroundings and the future of the firm, and has vowed to cease the firm cut up.

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It has now become a bitter combat. Cannon-Brookes advised RenewEconomy earlier this week – a day after launching his market raid – that he was “sick of them [the AGL board] fucking it up.”

AGL retorted on Thursday by accusing the Cannon-Brookes group of constructing “false claims”, together with the commentary that AGL has made no direct funding in renewables over the final 5 years.

AGL says it has invested $4.8 billion over the final twenty years in renewables. The irony is that whereas that could be true, it doesn’t imply that Cannon-Brookes’ declare is false.

The argument that AGL has made no direct funding in renewables in the final 5 years is supported in the exact same doc that the firm used to assault Cannon-Brookes. As this map under reveals, all the newest tasks have been funded by “third parties”.

Source: AGL. Click to increase.

But this dispute over direct and oblique funding misses the level.

The central motivation of Cannon-Brookes’ tilts at AGL – first in the rejected joint presents made by his non-public firm Grok Ventures and Brookfield, and now by the on market raid – is about the velocity of AGL’s transition.

He says it’s method too gradual.

AGL, let’s bear in mind, is the largest generator of coal in Australia and the largest single greenhouse polluter in the nation, and Cannon-Brookes says its technique is on no account aligned with a 1.5C and even a 2C goal.

A decade in the past, AGL’s then CEO Michael Fraser justified his eye boggling funding in coal turbines by saying it could present the money movement to spend money on renewables. Let’s burn coal so we are able to construct extra renewables, he argued at the time.

It didn’t sound correct then and it doesn’t now. (Bizarrely, Origin Energy’s Frank Calabria is utilizing a related argument to justify the firm’s huge gasoline investments, regardless that it has chosen to quick monitor the closure of its remaining coal generator at Eraring).

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And in AGL’s case, it hasn’t turned out the method Fraser recommended it could. He was succeeded by American Andy Vesey, who tried to change the color of the marketing strategy again to inexperienced however bought hounded out of the job when he introduced the closure of Liddell.

AGL claims to have invested in 2.3GW of renewables in the previous 20 years, however given the time frame, the dimension of the Australian market and its dominant place, that’s not likely a heck of a lot. It has been extra fascinated with rewarding shareholders with its earnings from coal.

Now AGL, in accordance to this week’s presentation, is saying it’s going to make investments 3GW in renewables and versatile capability by 2030. Again, that doesn’t come shut to what’s doubtless wanted to permit an early closure of its remaining coal turbines.

It’s an vital level as a result of AGL is suggesting that 2045 is the final doable date for closure of Loy Yang A, not the precise goal date. And it is suggesting that this may very well be introduced ahead if sufficient renewable capability could be constructed as an alternative.

That sounds a lot like Cannon-Brookes’ plan. The huge distinction is over the velocity of that funding and the transition, and Cannon-Brookes’ competition that this is finest performed by AGL as a single entity somewhat than cut up in two.

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Cannon-Brookes additionally factors to the contradictory messages despatched out by AGL over Liddell, the ageing, clapped out generator that may shut its final unit subsequent yr, and Bayswater, situated proper subsequent door that AGL needs to run for a minimum of one other decade.

“It boggles the mind that in Liddell, we’re going to make this wonderful green hub with industrial facilities and batteries and all this stuff, we’re using the land and the assets and stuff, but at Bayswater they say we can’t do that, it’s way too hard,” Cannon-Brookes says.

“I’m like, hang on, are they fundamentally different? Explain to me the fundamental difference between Liddell and Bayswater. There isn’t one. It’s bullshit. It’s entirely possible to be done. So you’ve just got to go out and do it.”

The distinction between Cannon-Brookes and the a number of others who suppose that method is the undeniable fact that he has the sources, and is keen, to lay $650 million on the desk to deliver the challenge to a head.

That’s a huge change from the Twitter change with Elon Musk that led to the building of the Tesla huge battery in South Australia, or his social media marketing campaign in opposition to Scott Morrison’s “fair dinkum” energy dismissal of renewable power.

This is an all in confrontation with a bastion of company Australia and one among the strongest and influential corporations in the nation. There is a lot at stake, not only for AGL, however for the remainder of the fossil gas trade, and the nation for that matter.

“It’s not philanthropic. It’s not a charitable exercise,” Cannon-Brookes says. But it does mark one among the key moments in Australia’s inexperienced power transition. And the world is watching.

The content material of this text was produced by RenewEconomy and republished underneath a content material sharing settlement.

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