Page 70 - AGL Sustainability Report 2011

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Climate
change
AGL Energy Limited 68
Sustainable generation sources
Introduction to sustainable
generation sources
AGL continues to focus on investing in electricity
generation that is renewable or low-greenhouse gas
intensity.
Approach
AGL’s strategy is substantially 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 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 which will diversify
the geographical location of wind assets. These renewable
assets provide generation across the three categories of base,
intermediate and peak electricity duties.
Although accounting for over half the installed capacity of AGL’s
operated generation assets, gas fired facilities are limited to just
three stations – the 1,280 MW Torrens Island Power Station,
the 150 MW Somerton Power Station and the 12 MW Moranbah
Power Station.
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. A list of projects is provided on
page 3.
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 69)
, an expected future price on
carbon
(page 70)
, and the commercialisation of emerging renewable
technologies
(page 71)
.
Performance
In FY2011, a further 132 MW of renewable energy generation
capacity commenced commercial operation. The operation of
the AGL Hallett 4 Wind Farm increased AGL’s operated renewable
capacity by 12% to 1,205 MW.
Renewable energy capacity now makes up 45% of AGL’s operated
capacity, compared to 42% in FY2010.
Installed capacity of operated generation assets
1
Note
1 This breakdown includes only those assets where AGL has operational control.
When these fgures 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 3,889 MW.
Legend
Gas
1,451 MW
Hydro
796 MW
Wind
389 MW
Landfll gas,
biomass and biogas
20 MW
Diesel
0.4 MW
Solar
0.1 MW
Coal
0 MW
Total installed capacity
(operational control)
2,656 MW
Installed capacity of operated electricity generation
1
Notes
1 These fgures 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 The FY2012 forecast is based on the AGL Hallett 5 and Oaklands Hill wind farms
commencing commercial operation.
Legend
Renewable capacity
Gas fred capacity
0
63% 57%
500
1,000
1,500
2,500
2,000
3,000
MW
37% 42%
55%
48%
52%
45%