AGL keeps ahead of the curve on energy

AGL’s pledge to clean up its power generation act is both highly symbolic and strategic.

The owner of some of Australia’s dirtiest coal-fired power generation has outlined a long-term vision to break its carbon emissions habit.

The company no doubt hopes its plan to decarbonise some power generation and close existing coal plants by 2050 will help shield it from the very aggressive divestment movement scaring lenders and investors away from fossil fuel companies worldwide.

AGL also wants government policy to support renewables and pay big carbon emissions facilities to quit.

With 1766 MW of renewable generation capacity in wind, hydro and solar, AGL is already the largest sharemarket-listed owner, operator and developer of renewable energy generation in the country.

But AGL’s renewables still represent only 17 per cent of the company’s total energy business. And by not supporting the Renewable Energy Target to date, AGL has been out of step with the its clean energy counterparts.

The truth is AGL is big in gas, both coal-seam methane and conventional, and a colossus in coal. In Victoria, AGL’s Loy Yang brown coal-fired power station produces about 15 TWh of electricity, enough to power more than two million homes. In NSW, AGL Macquarie’s assets include the black coal-fired 2640 MW Bayswater power station and 2000 MW Liddell power station.

As such, despite its wind and solar assets, AGL is a major target for climate change campaigners. But opening the nation’s largest solar facility yesterday in Nyngan, AGL publicly committed itself to a low-carbon future. The move has broad appeal and puts the company on the right side of the climate change debate. But read the fine print and AGL is not saying no to coal completely.

There is enough scope in yesterday’s statement to say new generation, low emissions coal-fired power technology might still be OK. So will new coal plants with carbon capture and storage — a technology many believe to be essential for the world to meet the target of limiting temperature rises to 2C.

Energy technologies and markets are changing rapidly and AGL is rightly putting itself, publicly, ahead of the curve.