AGL shares soar on $1 billion in asset sales and plans for a future without fossil fuels

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AGL plans asset sales of $1 billion and cost cuts of $200 million as the energy retailer re-invents itself for a world using less fossils fuels.

The company announced a strategic roadmap which foreshadowed an organisational transformation and a commitment to transition to a “carbon constrained” future.

AGL’s future includes a market where consumers use less electricity and increasingly take their power from rooftop solar panels, as this chart shows:

“AGL recognises that it plays a key role in reducing greenhouse gas emissions, at the same time as providing secure and affordable electricity for Australian households and businesses,” the company said.

“Energy markets will be transformed by new decentralised products and services, including solar PV, battery storage, connected appliances and smart grids.”

AGL last month announced that it will combat climate change by never building another coal-fired power station and making sure all existing plants are closed by 2050.

Part of the plan is to divest about $1 billion in non-strategic and under-performing asset divestments by the end of the 2017 financial year. Costs of $200 million are also targeted.

AGL reconfirmed the 2015 financial year underlying profit guidance at the top end of the $575 million to $635 million range.

AGL shares are up 7.3% to $16.61.

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