Coal-powered AGL boss Andy Vesey finds it's easy being green
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Coal-powered AGL boss Andy Vesey finds it's easy being green

Who says it isn't easy being green.

Last month – when AGL boss, Andy Vesey, unveiled the energy group's $800 million underlying profit for the financial year just ended – analysts were asking whether it still made sense to stick to its timeline of closing down its incredibly profitable coal-powered stations such as Liddell, starting in 2022.

"In this environment, we just don't see new development of coal as economically rational even before factoring in the carbon cost," he said of AGL's attitude to coal power.

He also spoke of the "significant" capital investment required to re-service a power plant such as Liddell, which is not much younger than he is.

AGL chief Andy Vesey has rebuffed Prime Minister Malcolm Turnbull's suggestion that Liddell's life could be extended.

AGL chief Andy Vesey has rebuffed Prime Minister Malcolm Turnbull's suggestion that Liddell's life could be extended.

Photo: Peter Rae
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"And the question we have to ask, is if we're going to make a significant investment in generation, would we do it in an older plant, which is less reliable with higher maintenance costs, or should we be making that investment in new technology, which aligns with what we believe is the future, which will give a greater value, long term, to our shareholders. Well, we've chosen the second, and we are still of that view."

Vesey's steadfast adherence to his position means Malcolm Turnbull will almost certainly have to pay through the nose if he wants to transfer the Liddell power station to another operator.

It will almost certainly alleviate AGL of the need to spend hundreds of millions of dollars on plant closure and remediation for Liddell in 2022.

Meanwhile, Vesey will probably continue to reap his $7 million-plus remuneration as the chaos of the government's energy policy boosts AGL's coal-powered earnings. And Vesey will continue to be an articulate champion of economic forces that now make renewable energy an inevitability.

Liddell Power station, which AGL so far plans to close in 2022 – despite federal government efforts to keep it going.

Liddell Power station, which AGL so far plans to close in 2022 – despite federal government efforts to keep it going.

Photo: Liam Driver

It's not hypocrisy on Vesey's part, it's a smart, and profitable, strategy for getting his investors from Point A (carbon) to Point B (renewable).

Not that he needs to explain this to Turnbull. Our Prime Minister installed a massive solar and battery storage system at his Point Piper home this year.

Illustration: John Shakespeare

Illustration: John Shakespeare

Spring season

The real estate industry's all important spring sales season has begun and the biggest listing has just hit the market.

It has no rooms, no bathrooms, or parking, and is yours for just $16 million (subject to negotiation).

In case you hadn't guessed, it is not actually a house, it is the 20.44 million shares in John McGrath's ASX-listed McGrath Ltd that former agents are trying to offload as early as this Friday when the shackles come off their 14.66 per cent stake in the business.

Escrow conditions have prevented McGrath insiders from offloading their shares in the hapless business since it listed on the stock market in December 2015 at $2.10 a share.

An ASX notice on Wednesday alerted to the market that these former McGrath stars – some of whom left the agency to set up a rival real estate business – have banded together to collectively sell their shares which are now worth around 80¢ each.

These agents, including stars such as Matt Lahood, Ben Collier and Brad Gillespie, have watched their stake shed $26.5 million in value since the IPO.

There is no doubting the intent to sell.

"I'm now unfortunately in competition with my own investment," said Lahood earlier this year of his decision to set up rival group, The Agency, while being forced to keep his McGrath shares.

Unfortunately for Lahood, his decision to flee McGrath and set up a rival operation was one of the triggers that saw McGrath shares hit a low of 54¢ in June.

The document released to the ASX declared the group "intends to act in a co-ordinated manner in relation to any sale of their shares in McGrath Ltd."

There is growing speculation that McGrath himself may look to privatise the company.

He still holds a 28 per cent stake in the agency.

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Like any good agent, McGrath picked the top of the market for the agency's shares when he sold $37.4 million worth of his stock into the public float in 2015.

Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au

Colin Kruger is a business reporter. He joined the Sydney Morning Herald in 1999 as its technology editor. Other roles have included the Herald's deputy business editor and online business editor.