AGL Energy has officially announced that it will split into two separate entities, keeping with the worldwide trend of “gentailers” breaking up their businesses with retail arms moving into more diverse service offerings.
AGL will hive off its base coal operations and form a new listed business called Accel Energy, which will be headed by interim CEO Graeme Hunt.
The retail wing is named AGL Australia and is backed up by renewable energy and gas power and is headed by newly appointed head Christine Corbett.
Chairman Peter Botten, who will chair Accel after the split, said the challenging market conditions and changing market put AGL at an “inflection point” where a demerger made sense.
AGL Energy posted a $2.29 billion bottom-line loss for the first half of 2020.
The AGL demerger plan, was first flagged by then-CEO Brett Redman in late March.
AGL has struggled in the aftermath of the collapse of wholesale power prices since the start of the COVID Pandemic and the flood of cheap and flexible renewable energy into the power grid..
The management also highlighted the competing forces acting on its coal-heavy generation business on one side and retailing on the other, where increasingly digitally connected customers are demanding cleaner energy and installing rooftop solar and batteries.
AGL, which has committed to reaching net zero emissions by 2050, said Accel would be “committed to the acceleration of decarbonisation while ensuring energy remains stable and affordable”.
It said it would publish a detailed climate change road map with specific emissions targets in line with its baseline target to cut CO2 emissions by 23 per cent by 2024, 60 per cent by 2036 and 100 percent by 2050.
The other two companies out of the Big Three Gentailers – EnergyAustralia and Origin Energy – have stated that they are not yet looking at the possibility of breaking up the companies.
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