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Climate
change
AGL Energy Limited 74
Sustainable generation sources
Introduction to sustainable generation sources
AGL continues to focus on investing in new electricity
generation that is renewable or low greenhouse
gas intensity.
Approach
AGL’s strategy is focused on renewable generation investment.
This investment is largely driven by opportunities created by
Australia’s 20% Renewable Energy Target legislation which has
bipartisan political support. Historic investment in renewable energy
has positioned AGL to have a relative carbon-intensity advantage
with the introduction of a carbon price from 1 July 2012. AGL has
stated that it will not invest in new coal-fired generation capacity
due to the emissions profile being inconsistent with anticipated
longer-term requirements in relation to emission reductions.
While AGL understands the concerns by many of our stakeholders
in relation to the acquisition of the remaining two-thirds of the
Loy Yang A power station, emissions from the energy sector remain
unchanged as a result of AGL’s move to full ownership.
AGL has investments across a wide range of electricity generation
technologies. AGL’s hydroelectricity assets are concentrated around
the Victorian and New South Wales border, and provide 796 MW
of peak generation capacity. Both gas fired generation and hydro
generation can be quickly switched on. AGL typically deploys this
generation in shoulder and peak periods, to put additional supply
into a higher-priced wholesale electricity market.
In addition to hydroelectricity, AGL owns/operates renewable
generators in a range of locations and technologies. Landfill gas
generation is scattered around Australia, including the eastern
states, Tasmania and Western Australia. AGL’s wind generation
portfolio is concentrated in South Australia; however, there are
numerous projects in the development pipeline that will diversify
the geographical location of wind assets. These renewable assets
provide generation across the three categories of base, intermediate
and peak electricity duties.
AGL has investments in three gas-fired power stations – the 1,280
MW Torrens Island Power Station, the 150 MW Somerton Power
Station and the 12 MW Moranbah Power Station. At the end of
the reporting period, AGL also acquired the remaining two-thirds
of the 2,200 MW Loy Yang A power station. However, due to this
acquisition occurring at the end of the reporting period, it has
been excluded from the data in this section. It will be included
in sustainability reporting from FY2013 onwards.
AGL has secured a range of prospective renewable and low emission
gas generation development options. This pipeline of developments
will sustain AGL’s position as Australia’s leading integrated renewable
energy company. AGL also has a suite of complementary gas
fired assets.
Vision for energy sources:
AGL’s vision is to be Australia’s largest
renewable energy company.
Drivers:
AGL’s investment decisions are influenced by the
Renewable Energy Target (page 75), the carbon price (page 76),
and the commercialisation of emerging renewable technologies
(page 77).
Performance
In FY2012, AGL completed construction of the 52.5 MW AGL
Hallett 5 Wind Farm and the 63 MW AGL Oaklands Hill Wind Farm
respectively, increasing AGL’s operated renewable generation
capacity to 1,320 MW.
Renewable energy capacity now makes up 48% of AGL’s
operated capacity, compared to 45% in FY2011. This excludes
the capacity related to the acquisition of Loy Yang A. Inclusive of
Loy Yang A, renewable energy capacity makes up 27% of AGL’s
operated capacity.
Installed capacity of operated generation assets
1
Notes
1 This breakdown includes only those assets where AGL has operational control,
as at 28 June 2012. When these figures are added to those assets where AGL
has other ownership or operational interests, including the control of electricity
dispatch or equity stake (apportioned by investment level), AGL’s total installed
capacity is 5,447 MW.
2 Generation and emissions associated with the Loy Yang A Power Station and mine
are excluded from this data for 2012, since AGL’s acquisition took place very late
in the financial year (29 June 2012). This data will be included in FY2013, for the
first full year of AGL’s operation.
Legend
Gas
1,451 MW
Hydro
796 MW
Wind
504 MW
Landfill gas,
biomass and biogas
20 MW
Solar
0.1 MW
Diesel
0.4 MW
Coal
0 MW
Total installed capacity
(operational control)
2,772 MW
Installed capacity of operated electricity generation
1
Notes
1 These figures relate to the capacity of electricity generation assets over which
AGL has operational control, regardless of who owns the asset. Assets where
AGL has rights to the electricity output only are not included.
2 Generation and emissions associated with the Loy Yang A Power Station and mine
are excluded from this data for 2012, since AGL’s acquisition took place very late
in the financial year (29 June 2012). This data will be included in FY2013, for the
first full year of AGL’s operation.
3 The FY13 forecast is based on the Macarthur Wind Farm commencing
commercial operation (and the inclusion of the AGL Loy Yang Power Station).
Legend
Renewable capacity
Non renewable capacity
0
63% 57%
1,000
2,000
3,000
5,000
4,000
6,000
MW
FY09
FY10
FY11
FY12
37% 42%
55% 52%
Target
FY13
45% 48%
68%
32%