Page 4 - AGL Sustainability Report 2011

This is a SEO version of AGL Sustainability Report 2011. Click here to view full version

« Previous Page Table of Contents Next Page »
AGL Energy Limited 2
About AGL
AGL’s integrated business strategy
AGL’s integrated strategy provides access to multiple profit
pools and balances risk between upstream supply of energy and
customers’ demand for energy.
Upstream supply – renewable and thermal generation
Merchant Energy manages AGL’s power generation assets and
wholesale energy sourcing portfolio. Merchant Energy also manages
energy sales to AGL’s major customers and to other retailers, and
provides energy efficiency services.
AGL has a diverse power generation portfolio, including baseload,
intermediate and peaking generation plants spread across traditional
thermal (coal and gas) as well as renewable sources (including hydro,
wind, landfill gas and biomass). Renewable energy generation assets
comprise around 45% of AGL’s operated generation portfolio (by
installed capacity), or 33% of owned, operated or controlled assets.
More information on AGL’s renewable assets is available in the
Climate change chapter
of this report.
Strategic direction:
AGL has a medium-term target of owning
and/or operating peak/intermediate generation to cover 80-120%
of flexible demand.
Upstream supply – gas production
Upstream Gas is responsible for managing the growth of AGL’s
upstream gas portfolio to secure long-term, sustainable and market
competitive gas supplies for customers and for power generation
AGL owns and/or operates coal seam gas exploration and production
projects in five petroleum basins across New South Wales,
Queensland and South Australia. The investments that make up
AGL’s upstream gas portfolio include:
>> Camden Gas Project: 100% interest, operated by AGL
>> Hunter Gas Project: 100% interest, operated by AGL
>> Gloucester Gas Project: 100% interest, operated by AGL
>> Spring Gully Gas Project: 0.0375–0.75% joint-venture interests,
operated by Origin Energy
>> Moranbah Gas Project: 50% joint-venture interest, operated by
Arrow Energy
>> Galilee Gas Project: 50% joint-venture interest (farming in),
operated by AGL
>> CSM Energy: 35% equity stake in a private company aiming to
extract gas from mining operations and deliver it to market
>> Taipan Joint Venture: 40% joint venture interest, operated by AGL
>> Silver Springs Project: 100% interest, operated by AGL
>> Various minority shareholdings in exploration licences in
New Zealand (not operated by AGL).
Upstream Gas also manages the Silver Springs Underground Gas
Storage Project, which is on target for first storage in FY2012,
and is developing the Newcastle Gas Storage Facility, with a final
investment decision due in FY2012.
Upstream Gas also manages AGL’s 9.9% equity interest in
Torrens Energy Limited. AGL and Torrens Energy have entered into
a Geothermal Alliance Agreement to jointly commercialise baseload
geothermal projects close to the electricity transmission network.
Strategic direction:
AGL is targeting ownership of around
2,000 PJ of 2P upstream gas reserves for domestic supply, with gas
production covering 40-50% of consumption.
Transmission and distribution
Ownership of large-scale electricity or gas transmission and
distribution systems that are used to transport energy from
upstream supply facilities (gas production and electricity generation)
to the end customer is not core to AGL’s integrated strategy. AGL
does not own gas or electricity distribution networks or electricity
transmission networks, but does have some strategic investments
in gas transmission infrastructure, as outlined in the
of this report.
Retail markets
AGL retails natural gas, electricity and energy-related products and
services (including solar) to 3.29 million customer accounts across
New South Wales, Victoria, South Australia and Queensland. A
breakdown of customer numbers by state and fuel type is provided
page 19
of this report.
In FY2011 the total amount of energy sold to AGL’s mass market
customers was 14,674 GWh of electricity and 62.6 PJ of gas. AGL
also sold an additional 18,090 GWh of electricity and 89.1 PJ of gas
to major commercial and industrial customers.
Strategic direction:
AGL is focusing on managing and growing
margins, and growing New South Wales electricity customer
accounts by 400,000 to 500,000, creating a national base
of 3.5 to 4.0 million.
Corporate support
AGL’s Retail Energy, Merchant Energy and Upstream Gas businesses
are supported by a full complement of corporate services. Further
information about AGL’s integrated strategy is available in the
Economic chapter
of this report.
AGL is Australia’s leading renewable energy company and largest private
owner, operator and developer of renewable generation assets.