Chief executive Brett Redman said the rapidly evolving energy market and customer demands were “driving the imperative to create this new path”.
“Today was about landing the big concepts,” he toldThe Age andThe Sydney Morning Herald. “We’ll come back with the details.”
While details of the plan remain unknown,AGL investors on Tuesday privately questioned how the proposed split would drive shareholder value. “The sum of the parts are still the same,” one said.
Mr Redman pledged AGL would consult with investors and other stakeholders before making further decisions on the timing and nature of the separation.
“We’ve presented it as an internal separation,but now we go into the next phase which will include consultation with shareholders,” he said. “We’ve also been pretty clear that ultimate demerger and separation as two listed entities is certainly a live option that we will be talking about.”
The move comes as a flood of renewable energy into the nation’s main power grid sends wholesale power prices crashing to multi-year lows,pummelling the profits of traditional power suppliers including operators of coal-fired power plants,which are struggling to compete with wind and solar. The outlook for coal will remain under pressure as state governments in Victoria and NSW adopt ambitious pro-renewables policies to incentivise the further development of wind and solar farms.
Earlier this month,EnergyAustralia announced it wouldclose down Victoria’s Yallourn brown coal-fired power plant in 2028,four years earlier than planned,in response to plunging electricity prices.