AGL Energy, which brought the first gas street lamp to Sydney in 1884, will combat climate change by never building another coal-fired power station and making sure all existing plants are closed by 2050.
The NSW-based energy producer and electricity retailer, which only last year bought two coal-fired power stations for $1.505 billion, today shunned coal in a new greenhouse gas policy.
The policy puts further pressure on Australia’s coal miners, who already are seeing shrinking markets because China is encouraging its own producers.
In Australia, 22 coal-fired power stations, spread across NSW, Queensland, South Australia, Victoria and Western Australia, account for about 24% of carbon emissions.
AGL CEO Andy Vese says the company recognises it has a key role in gradually reducing greenhouse gas emissions while providing secure and affordable electricity to more than 3.8 million Australian homes and businesses.
About 88% of Australian homes and industries rely on electricity produced from fossil fuels.
“This will be a measured process of decarbonisation, but one which I am proud to spearhead on behalf of AGL,”he says.
“It is important that government policy incentivise investment in lower-emitting technology while at the same time ensuring that older, less efficient and reliable power stations are removed from Australia’s energy mix.”
Key points from the AGL’s new policy:
- Not build, finance or acquire new conventional coal-fired power stations in Australia (without carbon capture and storage)
- Not extend the operating life of any of its existing coal-fired power stations
- Close, by 2050, all existing coal-fired power stations in its portfolio
- Improve the greenhouse gas emission efficiency of its operations, and those over which it has influence
- Continue to invest in new renewable and near-zero emission technologies
- Make available innovative and cost-effective solutions for its customers, such as distributed renewable generation, battery storage, and demand management solutions
- Incorporate a forecast of future carbon pricing in to all generation capital expenditure decisions
- Continue to be an advocate for effective long-term government policy to reduce Australia’s emissions in a manner that is consistent with the long term interests of consumers and investors.
AGL in September last year purchased MacGen, then the largest producer of electricity in New South Wales.
Its assets include the Bayswater and Liddell black coal-fired power stations, extensive coal handling infrastructure including rail unloaders and conveyor systems, 104 million tonnes of contracted coal and a 4.2 million tonne coal stockpile.
AGL shares trading down 1% to $14.92.