Mike Cannon-Brookes FTW
Is having another shot at making the dirtiest company clean up their act.
Mike Cannon-Brookes (who put Australia on the software management software map with his company Atlassian) recently made a bid for AGL Energy (which they rejected) - and he hasn’t given up. (Which is indicative of the determination of this man to clean Australian energy up.)
Why Won’t Energy Companies Come Clean?
This article from Renew Economy shows that Mr Cannon-Brookes is still very committed to making AGL clean up their act. Quick recap:
I’ve been following this particular story arc since it arose a few months back when MCB made his offer to acquire AGL. The offer was rejected because according to AGL it was “not in the best interests of our shareholders” and at the time I thought it smelled suspiciously of bullshit.
Mr Cannon-Brookes was proposing to close coal power stations much sooner than AGL’s quite - ummm, perhaps insolently slow might be a good way to describe it - stroll-out of their power station closures, and at the time I though their alleged reasons had more than a whiff of cow poop about them.
AGL could have claimed a huge feather in their cap for decarbonising faster than the other energy providers, and that would have increased their customer base of us increasingly-more-sustainable-issues-conscious Australians, and of course once you install sustainable energy production you no longer have the huge fuel bill to cover so profits would shoot up. So who were they trying to kid?
Well Then - What’s Going On?
If - IF - AGL were playing a straight game, then they’d have admitted that upgrading to sustainables was the best option for them, for the customers, and for the health of the planet. The fact that they dismissed a chance to modernise and decarbonise makes me think that perhaps currently things are not what they seem.
Let’s say I’m an energy company, ummm, call it TEdENERGY on the island of, um, Almaustralia. TE has had a good run, I have 1800 customers out of the 2500 people living on the island and the other two energy providers are scrapping over the remaining 700. Between TE and XE and ZE we have a fairly market-driven schedule of fees and charges, and we’re covering our costs.
(Note that I didn’t say by how much. . .)
Now along comes someone that wants to basically GIVE me the capital to build a wind and solar farm, and I say “nah, stick it up yer jumper mate, it’d cost my shareholders too much.”
The only reasons I could think of for not doing the right thing is that doing the wrong thing has been obscenely profitable, I’ve been wasting the obscene profits and/or overpaying office holders and shareholders to keep them on the board - and so there’s now not much in the pot for making changes, and in fact I’d be screwed if my customers and the rest of the public ever found out how much of an obscene profit I’ve been making (and wasting) for the last hundred and eighty-five years.
To me the freaky thing about that scenario is that AGL’s prices are actually pretty much in line with the Australian energy market as a whole…
It’s really no wonder the public are getting tired of companies charging customers the Earth for energy and then making the state of the Earth that they leave behind the public’s problem.
The Media And Social Media
Mainstream media routinely uses social media to propagandise (they call it “advertising” but hmmm…) and they support whomever their income comes from. The irony here is that MSM makes their income from advertisers - who are almost entirely corporate entities - and then they still try to charge the consumer a few bucks per issue as well.
The second irony here is that consumers who pay for that MSM news probably quite legitimately think that the price they pay forms a contract to some effect as that the MSM will report things with the bias being for the consumer’s benefit…
So of course Mr Cannon-Brookes’ offer was countered with social media messages that generally ran a bit like “it’s not good for billionnaires to be running things just because they can” and I can’t even begin to describe how that almost caused me an irony overload.
Of course the wealthy run the world. Wealth is power. It’s never really been any other way.
The thing is that I do have a bias myself - of course I do. And every other journalist, blogger, and social media poster has a bias too. So what?
Well the problem is that while my biases may align with and overlap yours and sustainable and decarbonisation biases far more closely than the MSM’s do, fewer people will get to see my article. That’s because MSM have millions of dollars in their pocket whereas I have a crumpled ALDI receipt and some pocket lint fluff.
For that reason I’ll ask you please to read right down to the bottom where I’ve placed my call to action, and perhaps take action yourself.
Is There An Ulterior Motive? Quite Possibly, Yes.
But that doesn’t make this any less a valid action by Mr Cannon-Brookes. In fact, if I’m correct, it’s a doozy of a motive and will improve Australia’s energy prospects by orders of magnitude.
As regular readers may remember, I’ve previously made a few guesses as to some possible links between the AGL taming and Sun Cable, a venture Mr Cannon-Brookes holds along with Mr Andrew “Twiggy” Forrest, known as the former CEO (and currently the non-executive chairman) of Fortescue Metals Group. (FMG)
“We already have 6GW or more of clean energy production available and between half and one GW of storage. The Sun Cable installation will have 3-4 times the power generating capacity and 20 times the battery storage."
That’s a huge statistic. “We” above refers to Australia as a whole, and the rest of that above refers to just clean/renewable energy production and storage. When you consider what Sun Cable could mean for Australian energy, it’s the biggest thing we’ve ever seen to date.
So one ulterior motive might well be that Sun Cable could sell their energy through AGL. It’s a win-win-win-win situation -
Sun Cable would have the customer base to enable them to obtain more funding to expand the plant or build a second one pretty much from the get-go - win.
It would be a series of construction projects that would generate thousands of jobs initially and almost as many jobs ongoing. Win.
AGL’s shareholders would be the beneficiaries of energy at a low cost and without needing any infrastructure, becoming the reseller. Win.
And because I’d be fairly confident that philanthropists such as MCB and ATF wouldn’t do this just to screw the very people they’re helping, AGL would lead in lowering energy costs and making electrical energy more economical than gas and wood and coal and petrol, another win.
Come to think of it there’s a fifth win in there, that being that for every gas cooker, room heater, and hot water system replaced by electric, for every ICEV (Internal Combustion Engine Vehicle) replaced by an EV (yep you’ve got this) the environment wins and our planet wins.
Isn’t That A Bit Of A Flex?
Quite simply, no.
The panels pictured above can create 3.5KW - 5.5KW between them. Sun Cable’s Elliott plant will have to have around four thousand times that many panels to give an idea of scale. (A banana just ain’t gonna cut it… FYI there’s between 14 and 15 panels in that image depending if you count the last corner…)
It’s a 20GW sustainable power plant selling only 2GW to Singapore at this stage. You don’t overbuild that kind of capacity for just one customer. It’s a single sustainable energy generating site that produces three, almost four times as much energy as all the other wind and solar projects in Australia combined.
And yet it’s selling only about 10% of its capacity. What would Janzo do (sorry - Outpost reference) if he had a spare 17GW of electricity being generated, and a battery capable of storing between two and three times that much energy? Pretty sure the answer is “sell it.”
It’s 3,500km for Sun Cable to lay a submarine cable to Singapore - and they’re quite happy to do it. Singapore is happy to have another string to their energy bow, they’re also obviously quite happy to pay the cable and battery farm off by being Sun Cable’s customer. (Darwin gets reliable energy too - make that six wins.)
And if a 3,500 submarine cable is justifiable (given the amount of constraints and requirements for a cable in a marine environment and the difficulty in laying such a cable) for Sun Cable to make part of its core business infrastructure, then it’s no great flex at all to imagine an underground cable heading south, east, or west to distribution points near Australian capitals, all of which are between 2,600 and 3,600 from the project.
If Sun Cable attracts further investors, (and that’s pretty much a given because it’s plain that they do have a potential market) other wind, solar, and battery farms can be built at key points somewhat closer to critical infrastructure.
Each key point could be as large as the Darwin farm, or at a scale more relevant to the location. By distributing battery and generation capacity, the network could become very resilient and able to cope with peaks and surges.
Straight down the Stuart Highway you have Alice Springs and Woomera, both could become a new installation and distribution point. Head east you have Mt Isa, already no stranger to huge industry, and to the west you have Port Hedland, Kalgoorlie, Perth, and could come back eastward to have Eucla as a link back to lines that would eventually encircle Australia and ensure that energy could flow via alternative routes.
You don’t need ALL of those, obviously you’d have a strategy to put in key plant first. But imagine the effect that cheap energy from the Sun Cable plant going into the grid(s) would have on other energy producers. I don’t think that is wasted on two businessmen such as ATF and MCB.
Nor would they have failed to see other bonuses:
The knock-on effect of electricity prices - making it the most cost-efficient way to run transportation from scooters to semis - means that if you happen to have an interest in an EV business, or some spare cash knocking around to get into this market, it would amortise itself quite rapidly.
Mining is energy-intensive. Mt Newman Mining and FMG and others up in that region would be steady customers for the gigawatts, especially considering that most facilities including ports that the mining companies operate would either already be heavily reliant on electricity or will be coming online.
I think AGL weren’t entirely stupid when they knocked back MCB’s offer, but the bad news for them is that this is (in my not so humble opinion) that it’s going to happen to them anyway, if not in 2022 then in late 2023 or early 2024, and AGL will lose.
Before their rejection, they had some chance they’d get sympathetic treatment. But I think that ship’s sailed and they’ll now face much more hostile shareholders.
It’ll be interesting to watch this play out, but I think it’s a foregone conclusion.
Here’s the place I’d really love for you to read. It’s literally one of the best ways you can get involved. Write to AGL. Write to local MPs and Ministers, sign petitions. Every action has an effect and these effects are cumulative.
Or if you can spare a few seconds, share this post with a few friends and ask them to share it too. The more people that read it, the more it’ll raise public awareness about issues like this, and with enough people getting active, we can make changes.
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See you next article, and until then, get the hell offa my lawn!