Ann: FY22 Results Presentation, page-44

its a sensible argument to query why more generation - which would have a lower cost of production - should be developed before existing assets are ready to be retired. This is exactly what the former board and executive team decided to do.

Problem with this argument is that - coal power is currently at the mercy of a high global spot price for coal, AGL is largely protected from this due to purchase agreements (now extended out to 2028 AFAIK for Bayswater / Liddell) and owning the Yoy Lang mine... but it is a risk that all energy generators that require a commodity (coal, gas, oil) to burn in order to generate electricity are exposed to (as far as I know - Torrens Point had a full PPA until 2017 and have since been rolling contracts... costs increased 32% last year). Ironically AGL has also hedged its exposure to the NEM spot price - so we still have months before we actually benefit with increased revenue from the higher price also

Not building sufficient new capacity also causes the spot price to increase due to a tight supply market... higher spot prices make it more appealing for other generators to increase their existing capacity - or build NEW capacity....EXACTLY what is happening right now... fastest I have seen yet... and also with more entrants to the market

ALSO the recent spot market has shown the importance of AGLs vertical integration - there have been multiple retail only (no generation) electricity providers put to the wall recently due to a dependancy on the spot market to meet their customer demand load. AGL - with the biggest customer book in Australia, needs to ensure we continue to meet all of our own demand, plus be able to export surplus in the NEM (especially in times of high spot prices)

AGL currently has a 2.9GW pipeline of development (which is mostly within PowAR Co)... it isn't enough, we already know there is 4GW leaving our capacity by 2030.

All IMO - DYOR