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.
Image source: Getty Images
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.
