New stake in Australian energy firm
Brookfield Asset Management has built a stake in AGL Energy four months after walking away from an attempt to take over the Australian power company alongside software billionaire and climate activist Mike Cannon-Brookes.
AGL said in a regulatory filing that a subsidiary of Brookfield had bought a 2.56 per cent stake in the company but that no new bid for the business had been made.
Brookfield’s acquisition of AGL shares prompted speculation the company could again be planning to join forces with Cannon-Brookes, who owns an 11 per cent stake in the company through his family office Grok Ventures, for another takeprivate bid. Both parties declined to comment.
Were that to happen it would likely speed up coal plant closures and investment in renewables in Australia. Under the previous bid, the Brookfield-Grok consortium said it would close AGL’s three large coal plants at least a decade earlier than planned and invest A$20 billion ($22b) in renewables.
Last month, Cannon-Brookes successfully blocked AGL’s plan to spin off its coal generation business and run its coal plants into the 2040s, prompting the chief executive and chair to resign.
Australia’s main grid is dominated by coal power, which supplies about
60 per cent of the eastern states’ electricity according to government data analysed by OpenNEM, a platform for national electricity market data.
But the shift to renewables has been rapid, driven largely by households installing solar panels on their roofs. This has undermined the profitability of coal plants, prompting several power companies to bring forward closure dates.
The Australian Energy Market Operator warned on Thursday that Australia’s electricity grid would lose
60 per cent of its ageing coal plants over the next eight years, requiring urgent investment in renewables, batteries and transmission.
“The coal exits are going to happen quickly so we need to have a clearer and more certain plan around that,” said Johanna Bowyer, an energy analyst at the Institute for Energy Economics and Financial Analysis.