Mike Cannon-Brookes says he'll 'continue to collaborate' with AGL after takeover bid rejected | 7.30

Look, I think this is how these things play out. I think we feel that our bid is very fair value for shareholders, especially when considered in relief to the alternate offer which is the demerger that's on the table. But we continue to work collaboratively with them to see how we can move forward.

I'm not sure it's about accelerating the closures. I think it's the natural state of the market. These are often uneconomic assets that are often running at a loss and are going to be increasingly running at a loss as we go forward. They produce very expensive energy and electricity and we need them to be replaced in their creation. So I think what people are making is very commercial decisions, as we saw at Origin, and as we would argue is the commercial decision for AGL is these things are not running in 2045. You can bring it forward to 2048 or 2045, economically I can't understand how that happens without some sort of massive subsidy coming from somewhere because the model just doesn't bear out that it's still running there.

I think it results in a higher power price, right? Fundamentally, the new sources of energy—renewable energies and storage and firming, all the technologies—are cheaper ways of generating electricity. So as we retire older generators and put in place newer generators, they should come at a cheaper replacement cost per watt per hour, however you want to think about it. So it should bring the price of energy down. If you delay that transition, you will keep a higher price of energy, and that's what we're seeing in the market right. We had announcements today, last week, that we are in the lowest energy prices we have in eight years, and that was trumpeted as a big celebration, as it should be. The reason for that is because our grid has passed 30% renewables, and as that keeps going up, AEMO's Integrated System Plan and everyone else will say that the prices will keep coming down because they are a cheap way of generating electricity. I think the Morrison government on the price question is looking at it as a supply-demand kind of thing, and it argues that renewables are not going to produce as reliable a supply, and so therefore if you have less supply, the straight demand equation drives up prices. Look, I think it's a very simplistic way of looking at what is a very complicated energy system. The reality is we have a market that's now priced every five minutes, and so supply and demand will match, and that includes firming and all of the other opportunities that are out there with modern technologies that we have today to deliver that power reliably. By that I mean it's 24 hours a day when people need it, supply meets demand. So I don't see that that's any different. The government has also come out and said they want this to be solved by private markets, so I think that is what we're putting up with the capital and execution to show that we can get it done. One of the biggest differences is we're putting 20 billion dollars after the acquisition into creating those replacement assets so that can be handled predictably between the retirement of existing assets and the replacement with new assets.

I don't think which government is there should matter. I think what matters is the predictability, the stability of energy policy, which fundamentally dictates the risk premium attached to these projects. So one of the things about Origin bringing forward the closure of Eraring and our bid, these give more signals to the market of where things are going to be in three years, four years and five years, which will bring down the risk premium for new construction projects which will hopefully accelerate those projects. So the more stability whichever government can give in policy and settings and circumstances, the more that private capital will come in to fund this transition. And let's face it, we need an awful lot of private capital. 20 billion sounds like a lot, it is a drop in the ocean compared to what we need to transition our economy entirely to be decarbonized. But that is what we have the opportunity to do in Australia better than almost any other nation on earth, and we should be taking advantage of that opportunity.

I have not. I haven't even... I don't think election has been called yet, so I haven't done much on the election. I've been a little busy, to be honest. I know it's upcoming at some point, so we'll get there.

Look, we're continuing to present our case, to work with shareholders and to work with the company, and obviously to work with any other stakeholders in terms of federal and state governments in various states, to explain our plan and explain our bid and what it means. And also presented as a counterfactual, there is a current plan of record on paper in terms of the demerger, so any questions asked about our plan should be asked of the alternate plan as well. And we think on paper it stacks up extremely well with the value for shareholders and the risk and predictability for the market itself.

Thank you for having me.