Mike Cannon-Brookes: Can a tech billionaire crush Australia’s coal industry by buying it?
Frustrated by the Australian government’s inaction on climate change, software kingpin Mike Cannon-Brookes is trying to buy several large coal-fired power stations so he can shut them down in favor of renewables
| To analyse
February 22, 2022
Mike Cannon-Brookes, Australia’s third-richest person, has launched a bold bid to buy the country’s biggest power company – and shut down its coal-fired power stations. It’s a bold approach to decarbonization, but can it achieve it?
Australia currently produces the highest carbon emissions per capita in the world by burning coal. The Australian government is very committed to fossil fuels, with Prime Minister Scott Morrison once bringing a piece of coal to parliament and announcing, “It’s coal. Don’t be afraid, don’t be afraid, it won’t hurt you.
Cannon-Brookes, co-founder of software giant Atlassian, strongly criticized the government’s climate inaction. Now he’s using his A$20 billion net worth to try to take matters into his own hands.
On Feb. 19, he made an A$8 billion bid in partnership with Canadian asset management firm Brookfield to buy power utility AGL, which owns three of Australia’s 16 coal-fired power stations. If successful, they will spend an additional A$20 billion to replace these coal-fired plants with renewable assets such as solar, wind and battery infrastructure by 2030.
AGL rejected the offer, saying it was too low. But Cannon-Brookes told the ABC February 21 that negotiations are underway.
If the takeover goes ahead, it will mark the start of the world’s largest decarbonization project. AGL is currently Australia’s largest greenhouse emitter and produces more emissions each year than Sweden’s annual total.
But is a software publisher up to the task of managing an electricity company? Tim Buckley of Climate Energy Finance, a consultancy in Sydney, believes Cannon-Brookes’ technical knowledge could actually come in handy, as smart software is increasingly used to deliver renewable energy more efficiently.
“Mike Cannon-Brookes is Australia’s smartest billionaire and Brookfield is one of the most successful renewable energy investors in the world, so it’s a perfect synergy,” he says.
Cannon-Brookes already has some experience in the renewable energy sector. In 2019, he teamed up with Australia’s second-richest person – mining magnate Andrew Forrest – to fund a project called Sun Cable that will supply electricity from a giant solar farm in northern Australia. Australia to Singapore via submarine cable.
In 2017, he also convinced Elon Musk to build a giant battery to store wind energy in South Australia after making a bet with him on Twitter.
Without the intervention of these mega-rich people, Australia would continue to drag its feet on the clean energy transition, says Marija Petkovic of Energy Synapse, a consultancy firm in Sydney. “It’s such a shame that we had to rely on billionaires to fill the leadership void left by the Australian government,” she said.
In response to Cannon-Brooke’s AGL offer, Morrison told the media that coal-fired plants should run as long as possible so electricity prices don’t rise. “Our government is very committed to making sure that we sweat these assets for a living,” he said.
However, Cannon-Brookes told the ABC that electricity prices would actually fall under his plan because renewables have become cheaper than coal.
If its AGL plug comes loose, it could inspire similar takeovers of coal plants in other parts of the world. The Asian Development Bank, for example, recently announced a plan to purchase and close 5-7 coal-fired power plants in Southeast Asia and replace them with renewable energy.
“The economy is piling up, the science is piling up, what we need is just the courage to go out there and make it happen,” Cannon-Brookes told the ABC.
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