Thread by @David_Ritter

Turmoil at @AGLAustralia reached new levels this week, with major and costly power outages, and @mcannonbrookes buying a major shareholder stake and opposing demerger plans.
How has $AGL - a company with such an incredible history - reached this crisis point? 🧵: #ausbiz

To start, a reminder - @AGLAustralia is our country’s biggest climate polluter. $AGL alone is responsible for almost a tenth (over 8%) of our annual domestic greenhouse gas emissions. To protect our climate it is imperative AGL shifts its business model.

There has been ample opportunity for $AGL to transition its business model away from the destruction of our planet. Instead, AGL has resisted change and ignored the clear shift in the global energy market, consumer expectations - and the scientific warnings.

AGL has openly acknowledged awareness of its oversized emissions and the climate crisis, but is failing to take responsibility for the key role the company could play in a safer future.
But it wasn’t always this way.

In the mid-2010s, AGL’s CEO Andy Vesey had a plan: $AGL would respond to rapidly changing business conditions, by transitioning away from generating electricity from burning dirty coal and would embrace renewable energy.

But Vesey and his future focus did not last. His resignation came amidst pressure from pro-coal politicians and lobbyists on AGL.
Under new CEO Brett Redman, $AGL made the unwise decision to double-down on dead-end coal. abc.net.au/news/2018-08-2…

Instead of responding to the clear market shifts around it, $AGL increased the amount of electricity it generates from renewable energy by a total of around 1% between 2016-2021.
That’s less than 0.2% per year.
2019datacentre.agl.com.au/infrastructure…

Fast forward to 2020. AGL’s fortunes were in steep decline with a 22% fall in underlying full-year profit and a gloomy outlook for 2021. Then CEO Brett Redman noted the ‘considerable uncertainty’ of the company’s operations.
smh.com.au/business/compa…

In February 2021, AGL’s share price hit a record 52-week low, with underlying profit dropping 27% after the company posted a $2.27 billion bottom-line loss. Brett Redman suggested a business model restructure could be on the cards: afr.com/companies/ener…

Also in February it was revealed that $AGL was Australia’s worst violator of environmental regulations for coal-burning power stations and had the highest number of power failures (coal is extremely unreliable):
smh.com.au/environment/cl…

In late March 2021, $AGL proposed a demerger to separate its coal-burning power stations from the retail arm. Investors were unimpressed. This was merely cosmetic:
afr.com/policy/energy-…

Investor concern increased when less than a month later, AGL’s CEO Brett Redman abruptly resigned, effective immediately.
This boardroom turmoil is a clear sign of a company in trouble. smh.com.au/business/compa…

In the middle of all of this someone inside @AGLAustralia decided to sue @GreenpeaceAP for parodying the company’s logo.
$AGL overwhelmingly lost the case - but managed to generate enormous publicity about its status as Australia’s worst climate polluter: news.com.au/finance/busine…

On releasing further details of its demerger in June 2021, the plan was met with ‘a humiliating reception’. Investors recoiled, resulting in another 10% loss in market value: afr.com/companies/ener…

$AGL Chair Peter Botten has openly admitted that AGL’s leadership failed to anticipate changes in the energy market. Botten has also acknowledged that the company is at a true ‘inflection point’: reneweconomy.com.au/inflection-poi…

$AGL posted a $2 billion loss for the 2020/21 financial year due to its stubborn refusal to work out a plan to appropriately phase out coal: businessinsider.com.au/agl-coal-plant…

AGL’s own customers can see the writing on the wall - again hitting AGL’s bottom line and shareholders. Later in 2021, Tomago (Australia’s biggest energy user and AGL’s biggest customer) announced it would aim to be powered by ‘mostly renewables’ by 2029. afr.com/policy/energy-…

In September 2021 at AGL’s AGM, the company faced an unprecedented investor revolt, as 55% of shareholders defied the board and supported a motion to set climate targets in line with the Paris Agreement:
smh.com.au/business/compa…

In this context, it’s not surprising such a troubled company would become subject to a potential hostile takeover - as @mcannonbrookes attempted earlier this year:
theguardian.com/business/2022/…

Despite the takeover not proceeding, energy experts at the time confirmed there would be no adverse risk to power price or supply from the MCB takeover and the closure of AGL’s polluting coal-burning power stations by 2030:
afr.com/companies/ener…

In just the past two weeks, AGL’s biggest polluting coal station, Loy Yang A, has suffered two major unplanned outages as the ageing machinery breaks down.
It’s clear coal can’t be relied upon to power Australia into the future.
theaustralian.com.au/business/minin…

These outages, one of which is likely to last until August, will cost AGL (and its investors) upwards of $70 billion.
I am not giving anyone financial advice - but if I was a shareholder, I’d be scratching my head:
thewest.com.au/business/agl-e…

The outages also made energy prices spike - hitting the back pocket of everyday Australians.
Ageing infrastructure means coal is now far more expensive and unreliable than renewables:
abc.net.au/news/2022-04-2…

It’s with this context that @mcannonbrookes has just purchased an 11.3% stake in $AGL, making him AGL's largest shareholder.
He aims to stop AGL’s planned demerger and instead transition it to supplying renewables - with all coal assets closed by 2030.
afr.com/companies/ener…

With a recent history of so much financial woe alongside purposeful environmental destruction, it’s not hard to see why @mcannonbrookes plan for $AGL is better for shareholders, customers, Australian taxpayers and the planet:
keepittogetheraustralia.com.au

As the site notes:
"This is not a choice between financial returns and environmental responsibility. Transitioning AGL to renewables offers Australia a brighter future that makes dollars and sense."

Meanwhile, $AGL is completely out of step with the market and competitors.
AEMO have confirmed renewables can support our grid & coal withdrawal is expected in the early 2030s and AGL’s biggest competitors have already brought forward their coal closures.
aemo.com.au/-/media/files/…

Instead of seizing the incredible opportunities of decarbonisation, AGL has invested $0 in the direct development of renewable generation over the last five years:
assets.cleanenergycouncil.org.au/documents/reso…

The transition to clean, green energy, powered by renewables and batteries is inevitable. The future safety of our planet depends on the speed at which we act.
It’s time for $AGL to stop posturing and instead commit to shutting coal by 2030. #ausbiz