Billionaire Mike Cannon-Brookes has declared he has big ideas for the future of AGL, as analysts suggest he may seek to steer the energy giant towards aggregating solar power generated on millions of Australian homes following his successful campaign to block its demerger.
AGL, the nation’s largest carbon emitter, was plunged into crisis this week after a shareholder push, led Cannon-Brookes, scuttled the proposed break-up of its retail and power generation businesses. The company has now launched a “strategic review” of its future, following the resignations of half of its board of directors.
Cannon-Brookes investment arm Grok Ventures, which amassed an 11.3 per cent interest in AGL, argued that splitting AGL into smaller entities would leave it less able to fund the investments needed to bring forward the closures of its coal-fired power stations that are not currently due to retire until 2045. The Atlassian co-founder and other large shareholders, including UK-based Martin Currie, have also insisted AGL would have a better future if it remained a single company that could use its giant retail base of 4.5 million customers to harness clean-energy technology.
On Tuesday, investment bank UBS said it believed Grok saw “considerable value” in AGL’s underlying business as a platform to develop new distributed-energy products that could orchestrate power generated from rooftop solar panels and stored in household batteries and aggregate it onto a new “scalable trading platform”.
“While we do not believe a scale product exists yet in Australia, the right tech could fundamentally change the future of energy generation and retailing,” UBS analyst Tom Allen said.
“AGL’s industrial customer book and low-cost wholesale generation portfolio may provide an ideal testing ground for such a product and its 4.5 million energy and telco customers an opportunity to apply at scale if successful.”
As an influx of wind and solar power across Australia threatens the future of fossil fuel power stations, the industry has been increasingly exploring new technology to expand its customer offerings and target new revenue streams. Home batteries, solar panels and demand-management technology continue to grow in popularity, while “virtual power plants” – groups of hundreds or thousands of homes with solar and batteries linked up to manage demand and energy flows – are being trialled across the country.
Cannon-Brookes, who is pushing to have two nominees to AGL’s board, said the clean-energy revolution and electrification of the economy presented significant and exciting opportunities for AGL. He is expected to meet this week with chairman Peter Botten and board member Vanessa Sullivan.