Coal to return: AGL

AGL predicted a return to coal-fired power generation over the next few years, saying a lower carbon price will make coal more competitive and reduce pressure on coal prices.

According to AGL, a low carbon price will make gas less competitive and, with an anticipated decline in the carbon price from 2015, this will take pressure off coal prices and support a resurgence of coal-fired power.

AGL’s chief executive Michael Fraser made the prediction and is quoted in the article saying, 'I expect a resurgence of coal-fired power.'

The company expects a return to coal-fired generation 'over the next few years,' linked to the anticipated decline in the carbon price from 2015.

The article says an anticipated decline in the carbon price will take pressure off coal prices, effectively making coal more economically attractive compared with alternatives like gas.

AGL suggests that a low carbon price will make gas less competitive, which is one reason the company expects coal-fired power to resurge.

Everyday investors should note this is AGL’s outlook: the company expects a coal resurgence driven by a lower carbon price. Investors may want to follow carbon-price trends and AGL statements to see if the market environment evolves as AGL describes.

No. The article states there is an anticipated decline in the carbon price from 2015 but does not provide details on the policy or market reasons behind that expectation.