Renewable energy – FY17 performance
AGL is committed to playing a leading role in developing a pathway to a modern, decarbonised generation sector through investment in new renewable and near-zero emission technologies, as is elaborated further in our Greenhouse Gas Policy.
Australia’s Renewable Energy Target requires electricity retailers (such as AGL) to progressively increase the proportion of renewable energy being supplied to customers.
In 2016, we launched an innovative new investment vehicle called the Powering Australian Renewables Fund (PARF). The fund is aimed at facilitating the construction of approximately 1,000 MW of renewable generation.
The PARF was designed to address a range of challenges faced by developers, retailers and investors. Specifically, the structure and nature of the fund enables:
- the opportunity for investors with long-term investment mandates to invest directly into renewable energy at a funding level that provides appropriate economies of scale
- diversification of risk across the supply chain (retailers, debt and equity providers and project developers) through the use of shorter term offtake arrangements and provisions for renegotiation
- efficiencies of scale with regard to financing, risk and governance arrangements leading to a reduction in cost of project delivery, and
- the ability to better manage risk through geographical diversification of renewable energy investment.
Our contribution is around $200 million in equity to the PARF. Our equity partners’ contribution is around $800 million. In November 2016, we sold our 102 MW Nyngan and 53 MW Broken Hill solar plants into the Fund.
In January 2017 we announced financial close on the 200 MW Silverton Wind Farm project. AGL is managing the construction of this project on behalf of the PARF, and once complete, will also operate this asset until 2023 (with both AGL and the PARF having an option to extend the offtake for a further five years). The Silverton Wind Farm is expected to achieve full generation in FY18.
During FY17, we continued to progress the development of the proposed 453 MW Coopers Gap Wind Farm project, which, if built, would be the largest capacity wind farm in Australia.
By gradually increasing investment in large-scale renewable energy capacity and not extending the operating lives of existing fossil fuel based generation, we are effectively reducing the greenhouse gas emissions intensity of the Australian electricity system.
Our portfolio of renewable energy
As of 30 June 2017, we operated 1,890 MW of renewable generation capacity, representing 18% of our total operated generation portfolio. We are Australia’s largest non-government operator of renewable energy generation.
Installed capacity of operated generation assets
There have been no material changes to AGL’s generation portfolio during FY17. We currently operate the largest wind farm and the largest solar plant in Australia. The 420 MW Macarthur Wind Farm in Victoria provided enough energy in FY17 to power more than 150,000 average Australian homes1, and the 102 MW Nyngan Solar Plant provided enough energy in FY17 to power more than 40,000 average Australian homes. The combined output across all the renewable energy assets that we operate produced enough electricity to power over 620,000 average Australian homes.
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