AGL Energy is likely to enjoy a significant rebound in earnings over 2023 and 2024 as increasing coal costs feed through to higher electricity prices, but the change will not be enough to save coal power.
“There is no doubt that coal-fired generation will exit the system earlier than previously believed, enabling a faster decarbonisation pathway. However, we firmly believe closures of thermal generation must not happen outside of a co-ordinated plan across governments, industry, regulators and the community,” AGL said when AEMO released the draft ISP.
However, they found that operating coal plants more flexibly to shift them towards peak prices – such as Higher prices for gas and for renewable energy certificates will also lift margins at AGL, the Credit Suisse analysts said, while voicing doubts whether the demerger will proceed at current still-depressed share prices because of the need for additional equity to support debt.
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