MELBOURNE, March 2 (Reuters Breakingviews) – Fossil-fuel companies are not all created equal, as Shell’s latest investment in Australia shows. The oil producer’s agreement to buy a 49% stake in WestWind Energy Development will help its new partner speed up deployment of almost 5 gigawatts of renewable projects. It puts coal-heavy power provider AGL Energy up against a stiffer breeze.
The country’s largest electricity generator and retailer is so short on cash it had to pay recent dividends in stock. It also set up a fund read more to try and attract the money needed to switch from coal, having devoted no capital expenditure to renewables since 2016, per activist shareholder Snowcap Research.
Shell, meanwhile, generated $45 billion of cash flow last year thanks to rising oil prices, and it plans to spend barely half that amount this year on new projects and such. The faster that wind and solar farms are brought online Down Under, the worse AGL’s coal-heavy portfolio will perform, exacerbating its dilemma. That should help make a takeover bid led by Brookfield Asset Management (BAMa.TO) all the more appealing. read more . (By Antony Currie)
