Australian tech billionaire Mike Cannon-Brookes has made an audacious bid to buy out Australia’s largest power utility, AGL, and accelerate its transition from coal to renewables, writes Gavin Dennett.

On 19 February, 2022, the founder of software company Atlassian announced an $8 billion bid for the energy giant, however the following day, after an emergency board meeting, the bid was rejected by AGL, which cited it undervalued the company despite it currently being valued at $4.7 billion.

However, Cannon-Brookes, via his private business Grok Ventures, and his business partner Brookfield have set aside an additional $20 billion to transition AGL away from coal towards wind farms and big batteries, and vow to continue their push directly to AGL shareholders to get hold of the company.

Cannon-Brookes – who has a 20 per cent share in the consortium, with Brookfield comprising 80 per cent – has been very upfront in his assertion that the bid to gain control of AGL is about helping accelerate the world towards a zero-carbon economy.

The Australian energy company has a history dating back 180 years and is one of the nation’s biggest generators of greenhouse gases, accounting for around eight per cent of Australia’s emissions. It has around 4.5 million customers, many of them households.  

On 10 February, 2022, AGL announced it has accelerated the closure date of its two biggest coal-fired power plants – Bayswater power station in the NSW Hunter Valley, and Loy Yang A power station near Traralgon, in east Victoria – by several years.

The plan is to bring forward the closure of Bayswater to “no later than 2033” from its original cease date of 2035. It’s Loy Yang A power station near Traralgon, in east Victoria, will also close early, in 2045, from its original close date of 2048.

However, if the takeover bid is eventually successful, Cannon-Brookes plans to convert AGL into a clean energy giant and accelerate its exit from coal by closing its coal-fired power plants by 2030 – 15 years earlier than the company’s forecasts – and targeting net-zero emissions by 2035.

It would also scupper proposed plans to split the company in two to form an electricity generation operation and a power retailer.

The bid by Cannon-Brookes and Brookfield drew criticism from Australian Prime Minister Scott Morrison, citing the rapid closure of coal plants will lead to a spike in consumers’ power bills.

But Cannon-Brookes, an outspoken advocate for action on climate change, scoffed at the suggestion, saying the consortium “strongly believes it will result in lower bills for consumers”.

“People are asking energy providers for [clean energy] already,” he said. “They want energy to be as cheap as possible and continue to be cheaper. So we’d have to be delivering far cheaper energy in 10 years’ time. And obviously far cleaner energy in 10 years’ time.

“[We] are putting resources towards trying to be catalytic investing in ways that will drive Australia and the economy forward, and hopefully the world’s decarbonisation process forward.

“Environmental concerns affect every sector of the economy, whether that is manufacturing or resources.

“Most of the brownouts ­recently have happened because of what? Coal plants being offline. Why? Because they’re very aged assets and no-one is building new ones as they don’t make economic sense.

“They’re the ones threatening the reliability of your bills.”

Brookfield Asia-Pacific chief executive Stewart Upson said the transition away from coal would happen “in a way that prioritises customer power reliability and prices”.

“We have a defined plan to significantly rationalise AGL’s most carbon-intensive thermal assets once we have replaced its capacity through the execution of a large-scale renewable build-out, supported by an identified project pipeline,” he said.