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.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

A woman sits with her hands covering her eyes while lifting her spectacles sitting at a computer on a desk in an office setting.

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.

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.

More on Energy Shares

CEO leading a board meeting.
Energy Shares

Contact Energy appoints new Chair as Rob McDonald retires

Contact Energy announces the upcoming retirement of Chair Rob McDonald and the appointment of Jon Macdonald as successor after the…

Read more »

A man sitting at his desktop computer leans forward onto his elbows and yawns while he rubs his eyes as though he is very tired.
Energy Shares

Boss Energy shares tumble on guidance downgrade

This uranium producer has downgraded its production guidance for FY 2026.

Read more »

Time to sell written on a clock.
Broker Notes

Sell alert! Why this expert is calling time on Karoon Energy and Santos shares

A leading analyst delivers his verdict on Karoon Energy and Santos shares.

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated.
Energy Shares

3 key takeaways from Woodside's first-quarter result

From strong asset reliability to improving pricing, this update highlights what is really driving performance beneath the surface.

Read more »

A service station attendant crosses his arms and smiles towards the camera with a backdrop of petrol bowsers and a drive-through facility.
Energy Shares

Ampol shares surge 50% to a two-year high: Buy, sell or hold?

Find out what upside analysts are tipping for Ampol shares next.

Read more »

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles.
Energy Shares

ASX 300 coal stock lifting off today on production rebound

The ASX coal miner is recovering strongly from a wet start to the new year.

Read more »

An oil worker in front of a pumpjack using a tablet.
Energy Shares

Up 40% in 2026: Why are Woodside shares charging higher today?

This energy giant outperformed expectations during the first quarter.

Read more »

An oil worker assesses productivity at an oil rig as ASX 200 energy shares continue to rise.
Energy Shares

Woodside Q1 2026 earnings: Revenue grows, Scarborough and Trion progress

Woodside's Q1 2026 earnings highlight rising revenue and project progress, with reliable energy operations amid challenging weather conditions.

Read more »