Page 64 - AGL Sustainability Report 2011

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Climate
change
AGL Energy Limited 62
Carbon risk
Introduction to carbon risk
In the energy industry, to get an accurate picture of
a company’s greenhouse performance it is not enough to
look solely at the total amount of greenhouse gas emitted
from the company’s operations. It is equally important to
examine the greenhouse intensity of the assets managed
and invested in by the company, and how the company’s
business strategy will contribute to the overall greenhouse
intensity of Australia’s economy into the future.
Approach
The greenhouse intensity of AGL’s operated electricity generation
portfolio compared to the market average is an important metric
for measuring how well the organisation is positioned to manage
the risk of regulatory intervention through a carbon price.
Vision for carbon risk:
AGL’s vision is to have an emissions
intensity significantly lower than the market average.
Drivers:
In addition to measuring the greenhouse intensity of
generation as an indicator of future economic impacts on AGL,
AGL also uses three approaches for measuring and communicating
the greenhouse gas impact of its business: an Operational Footprint
(page 63)
, an Equity Footprint
(page 65)
and an Energy Supply
Footprint
(page 66)
.
Performance
The greenhouse intensity of electricity generated from AGL’s
operated assets compared to the market average is one way
to determine how the portfolio is positioned to compete in an
energy market that includes a price on carbon.
The greenhouse gas intensity of AGL’s operated electricity
generation assets decreased by 8% compared to FY2010,
to 0.36 tCO
2
e/MWh (sent-out).
Greenhouse footprint
A summary of AGL’s three greenhouse footprints is presented below.
Further detail about each footprint is provided in the following pages.
Output and intensity of AGL operated
electricity generation assets
1
Intensity of AGL operated electricity generation assets
1
Legend
%
Gas
58%
Hydro
19%
Wind
21%
Landfll gas, biomass
and biogas
3%
Diesel
0.02%
Solar
0.001%
Total output
4,191 GWh
Legend
AGL intensity
1
Australian electricity
intensity
(NGA Factors 2011)
2
0
0.1
0.2
0.3
1.0
tCO
2
e/
MWh
0.4
0.5
0.6
0.7
0.8
0.9
58% 60% >50%
Generation intensity
0.36 tCO
2
e/MWh
Notes
1 These fgures relate to the sent-out greenhouse gas emissions (scope 1 and
scope 2) intensity of generation assets over which AGL has operational control,
regardless of who owns the asset. Assets where AGL controls or has rights to the
electricity output only are not included.
Notes
1 These fgures relate to the sent-out greenhouse gas emissions (scope 1 and
scope 2) intensity of generation assets over which AGL has operational control,
regardless of who owns the asset. Assets where AGL controls or has rights to the
electricity output only are not included.
2 Australia-wide scope 2 greenhouse gas emissions intensity fgure is from the National
Greenhouse Accounts (NGA) Factors published by the Department of Climate
Change and Energy Effciency, July 2011 (latest estimate is 0.91 tCO
2
e/MWh).
Operational Footprint
1
The Operational Footprint covers the emissions
from activities and assets that AGL operates. The
Operational Footprint has increased by 7% compared
to FY2010, to 1.596 MtCO
2
e, primarily due to an
increase in electricity generation from the Torrens
Island Power Station, and the acquisition of the
Mosaic Oil facilities.
Equity Footprint
The Equity Footprint sets out AGL’s share (by
percentage investment level) of the emissions from
fully or partly owned entities. The Equity Footprint
has remained constant at 8.0 MtCO
2
e. A decrease
in emissions associated with AGL’s stake in Loy Yang
Power was largely offset by an increase in emissions
from AGL’s operated assets.
Energy Supply Footprint
The Energy Supply Footprint estimates the
greenhouse gas emissions associated with the use
of electricity and gas by AGL customers. The Energy
Supply Footprint has decreased slightly compared
to FY2010.
1.596 MtCO
2
e
1.489 MtCO
2
e
1.677 MtCO
2
e
8.0 MtCO
2
e
8.0 MtCO
2
e
8.1 MtCO
2
e
48.0 MtCO
2
e
49.8 MtCO
2
e
49.4 MtCO
2
e
FY11
FY10
FY09
FY11
FY10
FY09
FY11
FY10
FY09
Note
1 AGL’s Operational Footprint includes scope 1 and scope 2 emissions only. Scope 3 emissions were included in this footprint in previous Sustainability Reports, therefore
historical emissions have been recalculated to include only scope 1 and scope 2 emissions. This year there have been revisions to the methodologies used to calculate the
Equity and Energy Supply footprints. The results from previous years have been recalculated.