AGL (ASX:AGL) share price slumps amid expert’s warning of earlier coal exit

One expert believes Australian coal-fired power stations might only have 10 years of life left.
The post AGL (ASX:AGL) share price slumps amid expert’s warning of earlier coal exit appeared first on The Motley Fool Australia. –

The AGL Energy Limited (ASX: AGL) share price is in the red amid comments from the Energy Security Boards’ chair that coal will likely be phased out earlier than previously thought.

The Energy Security Boards’ chair, Dr Kerry Schott, believes coal-fired electricity will be kicked off Australia’s energy grid before 2040 – more than 10 years ahead of schedule.

AGL hasn’t announced plans to close its AGL Loy Yang Power Station, which incorporates two coal-fired powered stations and a coal mine, before its scheduled 2048 closure date.

At the time of writing, the AGL share price is $6.03, 2.03% lower than its previous close.

However, AGL isn’t the only energy share in the red on Tuesday. The S&P/ASX 200 Energy Index (ASX: XEJ) has fallen 1.8% at the time of writing.

That’s a larger drop than that of the broader market. Right now, the S&P/ASX 200 Index (ASX: XJO) is down 0.5%. The All Ordinaries Index (ASX: XAO) is also in the red today, having fallen 0.6%.

Let’s take a closer look at Schott’s prediction of the future of coal-fired power in Australia.

Is coal making a hastier exit than previously thought?  

The AGL share price is tumbling today, alongside many energy producers’ stocks. The fall comes amid reports the Energy Security Boards’ chair, Dr Kerry Schott, believes Australia will ditch coal-fired power by the mid-2030s.

Schott made the comments at the Australian Financial Review’s Energy and Climate Summit.

If Schott’s prediction comes true, the lifespan of AGL’s Loy Yang Power Station could be cut short by more than 10 years.

According to the Australian Financial Review, Schott thinks coal-fired power will leave Australia’s energy grid sooner rather than later as it’s becoming increasingly unprofitable.

Coal-fired power’s lessening profitability could be seen to be evidenced by AGL’s dismal earnings for financial year 2021.

AGL reported a $2 billion loss for financial year 2021. It blamed low wholesale electricity prices, less electricity generation output, and the roll-off of legacy supply contracts for the loss.

Though, it expects to post net profits after tax of between $220 million and $340 million for financial year 2022.

AGL share price snapshot

2021 hasn’t been a good year for AGL on the ASX. The company’s share price has fallen 50% year to date. It’s also 54% lower than it was this time last year.

However, all eyes will be on the energy producer this financial year as it gears up to split into two.

The post AGL (ASX:AGL) share price slumps amid expert’s warning of earlier coal exit appeared first on The Motley Fool Australia.

Should you invest $1,000 in AGL Energy right now?

Before you consider AGL Energy, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and AGL Energy wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why is the AGL (ASX: AGL) share price sliding lower on Monday?
Why did the AGL (ASX: AGL) share price have such a shocking FY22 first quarter?
Why this broker sees 30% upside for the AGL (ASX:AGL) share price
Why did the AGL share price have such a lousy month in September?

3 ASX 200 shares down more than 50% in 2021

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!