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With the Carbon Pollution Reduction Scheme in place, the wholesale cost of producing electricity and gas will rise to reflect the emissions intensity of the energy source and the carbon price. This will increase both the final electricity and gas price paid by the consumer and the risks associated with purchasing energy on behalf of customers. AGL has undertaken a range of modelling scenarios on the impacts of emissions trading on our power generation assets. The results demonstrate that the renewable generation assets in the AGL portfolio are expected to increase in value.
Over the coming decade, over 9,500 MW of new renewable generation will be required in Australia to meet the expanded Renewable Energy Target. AGL will pursue further renewable generation projects with an emphasis on high quality wind resource projects due to their mature technology, low costs relative to other renewable energy generation sources and their ability to meet industry scale needs. An outline of new renewable energy projects within AGL’s development pipeline is available in the About AGL section of this report.
AGL continues to explore other renewable energy generation opportunities. In 2008/09, AGL made a cornerstone investment in Torrens Energy Limited, one of Australia’s leading geothermal companies. We also entered into a Geothermal Alliance Agreement to commercialise base load geothermal projects close to the electricity transmission network. This transaction has the potential to significantly add to generation capacity through existing transmission infrastructure close to the AGL owned and operated Torrens Island Power Station.
