AGL to develop renewable energy projects
Updated: 14:52, Sunday August 23, 2009
AGL Energy says it will develop $6 billion to $7 billion in renewable energy projects over the next decade.
AGL Energy chief executive Michael Fraser said the recent passage of renewable energy target (RET) legislation through parliament was ‘very significant’ for AGL.
The passage of the RET means that from January there will be a target requiring 20 per cent of electricity to be generated from renewable energy sources by 2020.
‘We are the largest developer of renewable assets in the country, and this really means that we are going to be able to accelerate our development program,’ Mr Fraser told the ABC’s Inside Business program on Sunday.
Mr Fraser said that in total, about $25 billion to $30 billion of renewable projects would have to be built over the next decade to meet the RET target.
‘We intend to develop a pipeline of our projects so when we look over the next decade that’s probably six to seven billion dollars worth of projects on our own,’ he said.
‘We’ve already got over two billion dollars worth of projects on our books, so over the longer term, it’s a very significant value-creation opportunity for the company.’
Mr Fraser said that under the RET, about 4,500 wind turbines would have to be built to supply about 9,000 megawatts of power.
He agreed that the RET legislation would ‘crowd out’ gas-fired power generation.
‘Yes, that is definitely what will happen,’ Mr Fraser said.
He said renewable power-generation technologies were dominated by wind power.
Mr Fraser rejected a suggestion that AGL, which also has interests in the gas and brown coal sectors, would be happy about delays in the passage through federal parliament of the government’s emissions trading scheme (ETS).
‘Around the ETS, we want that in place. We think that’s a very important component,’ Mr Fraser said.
He said the ETS would result in additional costs to the energy industry and to the economy.
‘(But) what we really want is that legislation in place. We want certainty about what the business environment is going forward.’
Mr Fraser said companies would find it hard to make investment decisions unless there was certainty.
He said that, ultimately, sensible legislation would be put in place around a Carbon Pollution Reduction Scheme (CPRS), but it would require transition arrangements to ‘make sure that the lights stay on’.
Mr Fraser acknowledged that under the legislation coal-fired power stations using brown coal would eventually have to shut down unless they become cleaner.
‘When we look forward, ultimately, if there are no advances in carbon capture and storage, then ultimately, yes, the objective of the legislation is that those generators will be shut down and other generation will take its place,’ he said.