Evolution of Australia’s energy markets
Australia’s energy markets are currently in a state of transition, as a result of new technologies, evolving customer expectations and a global commitment to reduce greenhouse gas emissions. While reliable and affordable energy supplies will continue to underpin the prosperity of our communities, the sources of energy, and the business models that supply it, will evolve to reflect changes to society. As a result, policy and regulatory settings that were designed for markets supplied by large, centralised (and mostly thermal) power stations, and with clearly defined generation, transmission, distribution and customers, may no longer be fit for purpose.
In the 2016 AGL Sustainability Report we discuss AGL’s responses to these changes, and how we are preparing our business to meet the energy needs of Australia’s homes and businesses – both today and into the future. Key examples include:
- AGL’s Greenhouse Gas Policy which outlines our commitment to contribute to the achievement of Australia’s climate change objectives.
- AGL’s development of the Powering Australian Renewables Fund (PARF), to develop and own around 1,000 MW of large-scale renewable generation (investment worth $2 to 3 billion), with equity partner QIC, on behalf of its clients the Future Fund and those invested in the QIC Global Infrastructure Fund.
- Research authored by AGL economists which has shown that the interaction between renewable energy targets and energy-only electricity market design may not be sustainable with high penetration of non-firm renewable generation. As more intermittent renewable supply enters the market (such as wind and solar), wholesale electricity prices are likely to become volatile, with very low prices for much of the year and a handful of extreme pricing events (during which generators can recover their fixed costs). These articles are submitted to academic journals and are subject to a formal (blind) peer-review process prior to publication.
- The AGL Affordability Initiative, a three-year, $6.5 million programme launched in December 2014 to proactively identify and support customers experiencing financial hardship.
- Establishing a New Energy division within AGL that is focused on delivering market-leading distributed energy products and services, such as solar, energy storage, electric vehicles, home energy management and virtual power plants.
AGL has also published as a supplementary document to the 2016 sustainability report Australia’s Economic Transformation – AGL’s role in a changing society and economy, which explores in further detail how AGL and the broader energy industry may change between 2016 and 2050, and adapt to meet the evolving needs of Australian energy consumers, industries and communities.
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