AGL has refused Alinta Energy’s $250 million offer to buy Liddell Power Station and reaffirmed its decision to close the plant in 2022.
The power giant says it assessed the offer from Alinta and its Hong Kong-based owner, Chow Tai Gook Enterprises, and that the deal significantly undervalues future cashflow from the NSW site.
AGL said the offer is not in the interest of its shareholders and that it will stick to its NSW power generation plan, which includes repurposing the Liddell site to address any capacity shortfall after its closure in 2022.
“AGL has completed a thorough assessment of the offer and, after careful consideration, has advised Chow Tai Fook and Alinta that it will not proceed any further with the offer,” the company said.
“The AGL board has determined that the offer is not in the best interests of AGL or its shareholders.”
Alinta made its bid for the ageing Hunter Valley power station in April, describing it as a “compelling commercial proposition for AGL shareholders”.
Treasurer Scott Morrison has previously urged AGL to accept the offer from Alinta to buy the plant, echoing calls from Prime Minister Malcolm Turnbull who wants the station to stay open until 2025, when the expansion of the Snowy Hydro scheme is online, to ensure there is no gap in power availability.
AGL chief executive Andy Vesey has previously said the board had not been swayed by criticism from the prime minister and senior coalition figures because the decision to close the ageing power plant was based on a rigorous process.
The energy company last month announced it will spend up to $400 million to build a new gas-fired power station near Newcastle in NSW as part of a plan to help it address the loss in energy supply that could happen as a result of Liddell closing.
AGL is also planning to add 100 megawatts to its Bayswater power station, has an agreement to purchase over 300 megawatts of capacity from the Sunraysia solar project and said it will continue to assess the potential to develop a further 500 megawatts of gas-fired generation capacity.
Barnaby Joyce claims ‘market manipulation’
But former deputy prime minister Barnaby Joyce has accused AGL of treating the federal government as fools.
Mr Joyce says Australians already can’t afford their power bills.
“We need to grab AGL, cart them back in and say ‘this is BS, you’re taking us for a ride, you think we’re fools’,” he told reporters in Canberra.
“The Australian people are not, they are not going to pay for your market manipulation which is what is coming next.”
Labor doesn’t believe extending the life of Liddell through a purchase is the answer.
“We know that the solution to Australia’s energy and climate needs isn’t to extend ageing coal-fired power plants, it’s to invest in a whole suite of different renewables,” Labor frontbencher Andrew Leigh told Sky News.