Last year AGL made $539 million net profit. This year, $1,600 million. What’s not to like about closing Hazelwood?
Profit statements confirm what we’ve said — closing cheap coal boosts profits for generators. No wonder AGL won’t sell Liddell for a hundred million dollars. It also shows us that the big “bubble” in electricity prices is from the doubling of wholesale electricity costs. These corporates are reaping it in far above costs. The way to cut wholesale prices is to get rid of the RET, and fix our old coal.
[ABC] Its underlying profit, which excludes one-off items and changes in value in investments and hedging positions, rose 28 per cent to $1.02 billion, at the upper end of the company’s guidance.
Even Andy Vesey admits the coal closures helped AGL:
“This increase in prices in the broader electricity market has mostly been a result of the abrupt closure of non-AGL power stations such as Hazelwood in 2017 and Northern in 2016 and higher input costs from coal and gas,” AGL chief executive Andy Vesey said.
But watch the pea. Who is trying to blame high profits on higher input costs?
Then he tosses a dead dandelion to screwed consumers:
In this environment, we recognise that many Australian households are facing cost-of-living pressures because of the higher energy bills that have resulted from higher market prices.”
Vesey talks about renewables investments as if he is doing a favor to the country:
Mr Vesey said AGL would invest more than $2 billion to boost generation capacity.
What he didn’t say was they were boosting the exact kind of generation that makes things worse for customers, but will help him buy another yacht. See below:
The projects include Australia’s largest wind farm at Coopers Gap in Queensland, a dual-fire power plant at Barker Inlet in South Australia and boosting capacity at the Bayswater coal fired power station.
A final investment decision on a gas import hub in Victoria’s Westernport bay would be made in the next 12 months.
Mr Vesey said the company supported the Federal Government’s National Energy Guarantee for further investment in new generation projects across a range of technologies including gas, pumped hydro and battery storage.
If Mr Vesey likes the NEG and wants “policy certainty” it’s a sure bet that we, the people, don’t:
“While wholesale electricity prices have already begun to fall over the past 12 months, policy certainty is key to encouraging the additional generation supply that will place further downward pressure on prices and benefit consumers over time,” he said.
Where’s the free money? Wholesale electricity prices.
All of AGLs generators are being paid a lot more than they need to be, thank Malcolm Turnbull:
A large part of the profit increase came from a $562 million gain on electricity hedging contracts which had lost $263 million the year before.
However, AGL’s standout division was wholesale power generation which reported a more than 30 per cent increase in margins on the back of higher prices.
h/t Dave B, Dennis.