AGL strikes deal with Victoria to keep Loy Yang running until 2035

The news: Australia's largest electricity generator AGL Energy has struck a deal with Victoria’s government to keep its Loy Yang A coal power station running until 2035.

The numbers: AGL’s Loy Yang supplies around 30% of Victoria's annual electricity requirements. The company did not disclose the financial terms of the arrangement but has previously flagged spending of $400 million-$500 million a year to increase the flexibility of its Bayswater and Loy Yang A power stations.

The context: AGL last year said it would shutter the Loy Yang power station in 2035, a decade earlier than previously planned, after sustained pressure from investors, including its top shareholder, billionaire Mike Cannon-Brookes. The new agreement provides certainty around the timing of closure of the large coal power plant, which still provides a significant portion of Victoria’s power.