AGL extends Latrobe Valley coal power outage as energy crunch persists

Federal Energy Minister Chris Bowen convened an emergency meeting of his state and territory counterparts earlier this week to push ahead with sweeping market reforms aimed at ensuring a smooth transition from ageing and failure-prone coal-fired power stations, which still account for two-thirds of the nation’s electricity needs, to cleaner sources of energy.

One of the plans is to introduce a so-called “capacity market”, which would reward energy assets for guaranteeing power that can be quickly called onto support renewable energy when the wind isn’t blowing and the sun isn’t shining.

The reforms are mainly aimed at spurring investment in technologies such as big batteries, pumped hydro and possibly fast-start gas “peaker” plants. However, the proposal has sparked concerns among green groups because it may entrench fossil fuels such as coal-fired power stations in the economy. Victorian Energy Minister Lily D’Ambrosio declared she would not support payments directed to fossil fuels.

Alinta, the owner of Victoria’s Loy Yang B coal-fired power station, on Friday proposed that coal be included in the capacity market in the short term to address the challenges confronting the grid.

The company’s chief executive, Jeff Dimery, suggested coal’s inclusion could be regularly reviewed from 2029 onwards.

“We don’t want to prolong the life of coal-fired power for a minute longer than it’s required by the market,” he said. “But we can see today in an extraordinarily tight market just how critical every bit of capacity is to keep the lights on.”

Also on Friday, AGL announced the resignation of another of its top executives, chief customer officer Christine Corbett, after a shareholder push led by billionaire activist investor Mike Cannon-Brookes succeeded in blocking the board’s proposed break-up of its retail and carbon-heavy power generation businesses.

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The board announced the resignations of chief executive Graeme Hunt, chairman Peter Botten and independent directors Diane Smith-Gander and Jacqueline Hey, with remaining board directors set to conduct a strategic review into the future of the 180-year-old utilities giant.

Corbett, who would have led AGL’s retail and clean energy entity AGL Australia if the demerger had succeeded, will step down from her role as chief customer officer on June 24 and would continue to support the business, including contributing to the review of its strategic direction, until September 25.

“I was very excited to be appointed as managing director and CEO elect of AGL Australia to create and lead a new company centred around the customer and poised to capitalise on the growth opportunities arising in the renewable energy space,” Corbett said.

“I am very proud of the work my team and I have done over the past 12 months on the AGL Australia strategy which will be an important input into AGL’s review of its strategic direction.”

AGL has appointed Jo Egan, its generator manager of product and portfolio, as its new chief customer officer from June 25.

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