By Anne Hyland
February 26, 2022 Normal text size Larger text size Very large text size Power in its simplest form is the ability to make things happen.At the age of 42, businessman Mike Cannon-Brookes wields extraordinary power.He commands a personal fortune of $29 billion, putting him among the 100 richest people globally, and he’s using that wealth to influence Australia’s energy policy.
This week, Cannon-Brookes, a technology billionaire who in the past decade has turned climate change activist and become a large investor in renewable energy, made an audacious bid to privatise Australia’s largest emitter of greenhouse gasses, AGL Energy.
His private company Grok Ventures, which takes its name from a science fiction novel, partnered with Canada’s Brookfield Asset Management, and announced a plan to invest up to $25 billion buying out AGL, and replacing its coal and gas assets with renewables.
The deal blindsided AGL, the federal government, and conservative commentators, who were quick to condemn the bid as “unrealistic” and also Cannon-Brookes for using his affluence and influence to push Australia towards a green energy future.
“We’re planning to win,” says Mike Cannon-Brookes, of his and Brookfield’s bid to privatise Australia’s biggest polluter AGL Energy.Credit: Nic Walker
Big Money It’s not the first time that the deep pockets of a billionaire have been on display in trying to shape Australian politics and policy.
Conservative billionaire Rupert Murdoch has been criticised for using his media empire to help elect and remove governments in Australia.Billionaire Clive Palmer is expected to spend around $80 million ahead of a federal election trying to get MPs and senators elected that will give him influence in Parliament, as he promotes the coal industry and fights COVID-19 vaccine passports and mandates.
Advertisement In Sydney, billionaire James Packer got approval to build a second casino from the NSW government, when many questioned if the city needed one.
Mining magnate Andrew Forrest donned a high-vis vest alongside fellow billionaire Gina Rinehart and stood outside Canberra’s Parliament House just over a decade ago demanding a federal Labor government axe a proposed Mineral Resources Rent tax.They were successful.
Billionaires exist on both sides of politics.
Conservatives usually appreciate the advocacy and investment efforts of their own billionaires and pro-business special interest groups but get worried when a left-leaning billionaire, such as Cannon-Brookes, becomes an activist and investor.And vice-versa.
Perhaps, the bigger question is about the impact the ultra-rich can have on national life, for better or worse.Former judge and chair of the Centre for Public Integrity, Anthony Whealy, QC, says at first blush it might look like “an inadvisable situation where big money can distort government policy”.
“We’re having an attempt to change policy by big money, but in an open and transparent way,” says former justice Anthony Whealy.Credit: Peter Rae
“On the one hand, when examined more closely, it becomes a question of whether you think government policy is sufficient and appropriate, or whether change is needed, and whether the impact of big money can be beneficial in improving the core issues behind the policy, such as climate change, or in aged care homes, or disability or whatever area the big money is poured into,” he says.“On the other hand, if we see big money being poured into dangerous policy areas that are also in conflict with the government’s policy, at least in the view of the majority of Australians, then we can rightly condemn that.”
Still, regarding the AGL bid, Whealy says there is transparency.“We do see these moguls in business announcing exactly what outcome they want, and indicating how they propose to spend their millions.
In the past, government policy has sometimes been formed by the influence wielded by donors, who have often kept their donations well and truly concealed.Now, we’re having an attempt to change policy by big money, but in an open and transparent way.”
Changing the psyche Advertisement Cannon-Brookes, who sports a scraggly beard, shoulder-length hair, and whose wardrobe rarely strays from a T-shirt, jeans and a South Sydney Rabbitohs rugby league baseball cap, doesn’t see himself as a policy entrepreneur trying to effect social change.He believes he’s working within the policies already outlined by state and federal governments, and for him, the AGL deal is an investment that will deliver jobs, growth and good environmental outcomes.
“It’s a straight up investment.I hope it has an impact on the national psyche,” he says.
“The number of people I’ve had calling and emailing has been awesome, saying, ‘Thank you.I didn’t know this was possible and if you tell me it’s possible, F—ing A !’.
Loading “We’re changing the psyche that it’s possible, that this [transition to green energy] can happen much faster.”
While Brookfield is funding the majority of the proposed $5 billion takeover of AGL, and the $20 billion investment to move the business to renewables, Cannon-Brookes is the face of it.And he’s putting his money and reputation on the line, with the plan that by 2030 he and Brookfield can fundamentally change how businesses and households in NSW and Victoria receive their power.
The deal proposes to accelerate the closure of AGL’s coal power plants – Bayswater in NSW’s Hunter Valley and Loy Yang in Victoria’s Latrobe Valley – by 2030.
AGL’s board and management originally proposed to shut those plants no later than 2033 and 2045, respectively.
The plan to accelerate those coal plant closures has drawn the ire of Prime Minister Scott Morrison.He warned against such a plan saying it would create job losses, force up electricity prices for businesses and homeowners, and undermine the stability and reliability of the national electricity market, leading to potential blackouts.
Advertisement Kerry Schott, the former chair of the Energy Security Board, says the ongoing trend for the national electricity market is for wind and solar renewables to replace ageing coal-fired generators, as the latter becomes less commercially viable.She believes the market should be left to determine the fate of AGL.
Schott, a former investment banker, businesswoman and senior public servant, says the price of electricity from renewables could be very cheap, but it would depend on the infrastructure being built to deliver that green energy.
As for reliability, she says there are examples such as South Australia, which has the cheapest electricity in the national energy market, getting about 70 per cent of its power from renewables.The remainder is mostly supplemented with gas.While most of Tasmania’s electricity comes from hydro and wind.
Atlassian founders Mike Cannon-Brookes and Scott Farquhar after listing on the NASDAQ in 2015.Credit: Trevor Collens
Still, Morrison dialled up the pressure on Cannon-Brookes and Brookfield through the week, politicising independent government regulators, by suggesting the bid may not secure the approval of the Foreign Investment Review Board or the Australian Competition and Consumer Commission, before either regulator has had a chance to consider the deal.
The bid by Cannon-Brookes and Brookfield has been part of a trend for the past decade where business has been well ahead of the government in tackling Australia’s decarbonisation.Michael Traill, who used to work in private equity for Macquarie Bank, is a pioneer of social impact investing in Australia.He now chairs the country’s biggest philanthropic fund the Paul Ramsay Foundation, and is also a director of Sunsuper, which manages $85 billion, and he is not surprised by the deal.
Traill says globally capital has mobilised around green investments and the AGL deal, involving a sophisticated investor such as Brookfield and a passionate believer in Cannon-Brookes, is just another example of that trend.“It’s a large-scale example of how big pools of capital are taking a long-term view that they can both achieve good and decent economic returns on such investments,” he says.
Cannon-Brookes is confident the bid for AGL will succeed, and he’s not bothered by the political backlash.
“We’re planning to win,” he says.
‘Hey Mike’ Advertisement It’s that self-belief that helped Cannon-Brookes build Atlassian, a $100 billion technology company, which he co-founded with Scott Farquhar in 2002.The NASDAQ-listed company creates and sells software products such as Jira, a software tool for tracking tasks through a workflow, and others that allow collaboration by company teams.Atlassian’s customers have included NASA, Netflix, Facebook, Twitter, and Audi.
Loading Cannon-Brookes says he was always curious from an early age about how things worked.He believes if you have a good understanding of how things are built, it “enables you to tear them down and rebuild them in better ways”.
It’s why he and Brookfield are claiming that they can get AGL to net zero emissions by 2035, 12 years before AGL’s board said it could.
It’s an even more ambitious commitment than Atlassian’s own net zero target, which is 2040.
Cannon-Brookes is co-chief executive of Atlassian, and as his business and wealth grew, he has transitioned from being a clever tech billionaire into a climate change activist.
His activism is often on display via his Twitter account.In 2017, he famously had a Twitter bet with billionaire Elon Musk about whether Tesla could deliver the world’s then biggest lithium-ion battery to help South Australia’s energy crisis in 100 days.The battery was built, winning Cannon-Brookes praise from clean energy advocates, but his critics saw it as a publicity stunt.
Advertisement Since then, Cannon-Brookes has ploughed some of his fortune into other renewable projects, such as an ambitious $30 billion planned solar farm in the Northern Territory, which intends to deliver energy to Darwin and Singapore through a 4200 kilometre cable.Andrew Forrest has also taken a stake though the project still has to be fully financed.
Last October, Cannon-Brookes and his wife Annie announced they would donate and invest $1.5 billion on climate projects .
Cannon-Brookes has also weighed into politics donating $50,000 in 2019 to the Climate 200 campaign, which is backing independent candidates supporting climate action in the forthcoming federal election.
Loading Outside of climate investments, Cannon-Brookes has also put money into his passions such as buying a minority stake in American basketball team, the Utah Jazz, and owning an equal share of rugby league team, the Rabbitohs, alongside actor Russell Crowe and James Packer.Cannon-Brookes has put money into superannuation and autonomous vehicle start-ups, and is a substantial property investor in NSW, including acquiring a handful of Sydney’s trophy homes.
However, aside from his job of running Atlassian and his family, climate change activism and investment is what mostly occupies Cannon-Brookes time.
He admires technology and philanthropy leaders such as Bill Gates, who he got to know better after attending Climate Week, an annual event in New York, which happens alongside the UN General Assembly.
“I have been lucky enough to get to know Bill quite a bit.During Climate Week a couple of years ago, I was in a room full of people and, you know, happened to be chatting to Al Gore, and Bill Gates walked into the room and walked across the room and straight up to me and said, ‘Hey Mike’, and we started talking.I just remember thinking, holy crap! He knows my name! That’s weird.We’ve had lots of good conversations about things.”
After this week, most AGL customers will know Cannon-Brooke’s name and if the bid with Brookfield is successful, they will be hoping he keeps their lights on.
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License this article Energy Renewables Mike Cannon-Brookes AGL Energy Scott Morrison Coal More… Anne Hyland is an award-winning writer and a senior correspondent for The Sydney Morning Herald and The Age.She was previously deputy editor of Good Weekend and has worked for The AFR and as a foreign correspondent.
Email Anne at [email protected] Connect via Twitter or email ..