Mike Cannon-Brookes certainly created headlines recently, teaming up with Brookfield to propose an unsolicited $8 billion joint takeover bid of AGL Energy, mooted as an effort to speed up the closure of the gen-tailer’s coal-fired power plants well ahead of schedule, from 2045 to 2030.
The prime minister came out and claimed that the early closure of the plant would increase power prices significantly, while reportedly reserving the right to block the move under a national interest test to protect Australia’s energy supply.
Talk of a potential blockage of the takeover, however, runs counter to the very notion of market mechanisms driving change. Furthermore, it ignores the economics which would drive someone like Cannon-Brookes, with the backing of investment behemoth Brookfield, to make a move of this size.
He’d crunched the numbers, as would have Brookfield, and seen that not only was this the right move but one which would make money. The consortium believed it could accelerate the transition and make money at the same time, and in turn, provide lower electricity prices for all.
The truth is that the economics make sense to everyone involved in the push, and the country’s energy supply would not be at risk. Furthermore, the closure of a coal plant is hardly anything new; in fact, it’s inevitable and, for many, just around the corner.