WA energy transition: AGL boss Damien Nicks keen on west coast ahead of Kwinana gas power plant expansion call

There’s no sign as to when AGL Energy will press go on a major expansion of the Kwinana gas power plant but boss Damien Nicks has signalled the company is keen to push further into the WA market. AGL has committed $185 million to buy new turbines for the K2 Swift facility although Mr Nicks would not confirm the expected cost of the project. The K2Swift decision will be hotly anticipated as analysts tip increased gas generation will be needed in WA to hit the State Government’s 2030 target for shutting down coal. AGL also signed a power purchase deal with Tilt Renewables for the Waddi Wind Farm north of Perth late last year. “We’re really positive around WA and the growth in that market,” Mr Nicks told investors on Wednesday. “Watch this space as we continue to work through that growth. “We’re really excited about what we can do over there.” Shares in the Sydney-based utility surged more than 11 per cent through the day. AGL also announced the sale of its telco arm in a $115 million deal that will give the power company an equity stake in Aussie Broadband. Profit dropped 42 per cent to $94m for the six months to December thanks partly to contract writedowns and restructuring costs. Yet the company beat underlying profit forecasts in a performance broadly welcomed by analysts. About 400,000 AGL Telco customers — with NBN and mobile plans — will shift to Aussie Broadband by mid-year. The deal will be paid in shares and give AGL about an 8 per cent stake in Aussie Broadband. The power generator will be a long-term sales channel for the broadband business. “This move also establishes a long-term partnership, where Aussie Broadband will deliver telco services under the AGL brand,” Mr Nicks said. “We’ll also have the opportunity to increase our equity interest in Aussie Broadband through incentives that reward telco growth under the AGL brand.” Mr Nicks touted the deal as a way to simplify operations. It follows AGL’s sale of its 19.9 per cent stake in Tilt Renewables in November, which is expected to be finalised later this year. The cash will be used to fund investment into flexible battery capacity with construction under way on a battery at Tomago and further potential projects in New South Wales. A joint venture to fund up to 2 gigawatts of new wind farms across the country will also be considered, with AGL searching for a partner with “low capital costs”. AGL has already moved to close down coal plants after investor pressure and intends to shut down its final generator within a decade.