Another CEO of a major Australian coal power operator has stood aside in the space of a week, with the head of the publicly owned Stanwell Corporation stepping down after a falling out with the Queensland government over comments suggesting plants could close early.
In a statement, Stanwell chair Paul Binsted said that he had ‘reluctantly’ accepted the resignation of Stanwell CEO Richard Van Breda, praising the outgoing CEO for his performance while head of the Queensland government owned electricity generator.
“Richard has led Stanwell through many challenges since his 2012 appointment to the position of CEO,” Binsted said.
“Under his leadership Stanwell has consistently achieved a strong financial performance, earned the trust of its people and host communities, in both Rockhampton and the South Burnett and positioned itself as a key participant in the energy market of the future.”
The unexpected resignation appears to have been sparked by a disagreement between Van Breda and the Queensland government about the long term prospects of Stanwell’s coal power plants.
The resignation came just days after Van Breda gave a speech at the CQ Energy Futures Summit in Gladstone, where the outgoing CEO acknowledged the growing pressure on coal fired power stations as the market share of wind and solar continue to grow and the need to prepare the company’s workforce for a future after coal.
“Australia is undergoing a major energy transition and it’s happening at a rapid pace,” Van Breda told the conference. “Over the coming years, Stanwell will respond to the renewable energy needs of our large commercial and industrial customers through the introduction of new low or zero emission generation technologies. We will also strive to play a central role in the emerging green hydrogen industry.”
Stanwell operates two of Queensland’s largest coal fired generators, the 1,445MW Stanwell power station near Rockhampton and the 1,400MW Tarong power station. Stanwell was recently forced to write down the value of the two power stations, recording an impairment worth $720 million, following a fall in wholesale electricity prices.
Van Breda flagged in his speech the potential for the Tarong and Stanwell coal generators to be put into ‘standby’, powering down the generators while retaining the option of starting them back up again in the future if needed. Such a move would suggest that it was becoming unprofitable to run the coal fired generators full-time and that the corporation would need to wait for more favourable market conditions before running the plants more regularly.
“Our Tarong and Stanwell power stations will continue to play an important role as Stanwell’s portfolio transforms. We will operate our coal-fired power stations much more flexibly, in response to market requirements. This may include seasonal storage of our generating units, or placing units into standby mode so they can be quickly returned if the market needs them,” Van Breda said.
Van Breda also flagged that Stanwell had already begun discussions about the future of the company’s workforce in light of the looming closure of the company’s two coal-fired power stations.
“We are taking early steps to bring our people, communities, unions and government together to put plans in place. These plans will help ensure that as we eventually retire our coal-fired assets from service, our people have choices in relation to retraining, redeployment and – where it is their preference – retirement,” Van Breda added.
“The plans our host communities develop in partnership with government, local councils, industry and advocacy groups will ensure the long-term economic resilience of their regions. While the communities themselves must own these plans, we will engage with them throughout the planning process, playing a supporting role and sharing our future plans.”
It is these comments that appear to have spooked the Palaszczuk government, which does not want to be drawn into a potentially fiery political debate over the early closure of the state’s government owned coal-fired generators.
Van Breda made the speech on Wednesday, and by Friday, the Stanwell board had accepted his resignation.
In response, Queensland minister for energy, renewables and hydrogen, Mick de Brenni, affirmed that there were no plans to bring forward the closure of the Stanwell owned coal fired power stations.
“Stanwell and its workforce are critical to Queensland’s electricity supply. We will continue to have the highest respect for the livelihoods of the workers while we strive together to deliver cleaner, cheaper electricity for households and businesses and decent, secure jobs for Queenslanders,” de Brenni said.
“To be clear, there are no plans to decommission any of our publicly-owned generation assets in Queensland ahead of their time. In fact, Queensland needs significantly more generation to meet our aspirations for growth of our manufacturing and resources sectors.”
The swift departure of Van Breda highlights the ongoing political sensitivity around early coal plant closures and the hesitancy that remains within the Queensland state Labor government to be seen to be overseeing the exit of two of Queensland’s largest coal generators from the energy market.
Van Breda will serve in the CEO role until 28 May, when the Stanwell board will appoint an acting CEO and start the process of identifying a replacement.
Van Breda’s resignation comes just a week after AGL Energy CEO Brett Redman announced he would step down after advising the AGL board that he would not be able to commit to the company long term after AGL undertakes a planned split of its company.
AGL intends to carve out its portfolio of coal and gas fuelled power stations into a separate business, allowing the core AGL brand to focus on its energy retail business and the supply of low emissions energy. A new business will be formed to operate AGL’s fossil fuel assets as they approach the end of their operational lives.