recent FY22 results pointed out that AGL have hedged their revenue exposure... so it will be a few months before we start seeing benefit of increased NEM spot price
I am very hopeful that the review underway by board sub committee (results late September) will provide a good outline as to how current "cash cow" revenue will be appropriately utilized.
Catch here is that we know we have ~8 years before we will effectively have 4GW less capacity...1.5Gw of that is offline in the next 12 months (Lidell)... offset somewhat by 2.9GW in development pipeline (if it all gets developed). Question is - can we plan, develop and build enough to replace it within that timeframe??? We have had projects (still on the AGL website) that have been in planning phase for years, without reaching FID.
Will lenders be interested in providing project debt for construction (or will we be blocked by ESG screens)... I am pretty confident that PowAR co could be utilized which would limit AGLs contribution to 20% of the asset cost - which then leaves us with PPAs which get 6 monthly impairment or write backs on valuation... plus there was the proposal at demerger for Accel to partner with EIP for a reasonable pipeline of new generation... why not with AGL?
AGL Price at posting:
$7.04 Sentiment: Hold Disclosure: Held
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