Is AGL Energy actually the NEM’s greenest generator?


A bit counter-intuitive perhaps, especially given the AGL-bashing that’s been going around of late.

Following yesterday’s post about the AGL portfolio (expanded now to include Macquarie Generation), we wondered about the company’s share of wind farm production in the NEM.  Hence we ran some additional queries today in NEM-Review (this time sorting by “Trader”) and present this today.  Interested in what you think (either offline or online)?

Portfolio share of wind production in the NEM

The following chart shows the trended production of wind from portfolios in the NEM.

This clearly shows AGL is more than twice as large as any other portfolio for wind power produced.

2014-08-22-trendedwindproductionbyportfolio-fromNEM-Review

To protect the identity of those lagging AGL (i.e. everyone else) we have anonymised the other portfolios:
(a)  Anyone with their own copy of NEM-Review can run the same analysis –
(b)  For those without, if you want to email us (enquiry@global-roam.com ) we can send you an Excel file with the relevant other portfolios identified.

Here’s the data shown another way:

2014-08-22-trendedAGLwindshare-fromNEM-Review

I think I can understand why there have been criticisms from some quarters as AGL has diversified its asset based in recent years – firstly with Loy Yang A and now recently with Macquarie Generation.

However the fact that AGL Energy contributes more than 30% of the wind energy supplied to the NEM (and that this share has been growing as that segment of the market has grown) presents some balancing data.  These existing AGL assets will also be exposed to whatever might happen as a result of the current RET Review process.

Wind share of scheduled demand in the NEM

In order that we provide some grounding to the above, we reiterate that wind is still a small (but growing) share of the overall energy mix supplied in the NEM.

The following is not exactly an apples-to-apples comparison (as the NEM-Wide demand shown is Scheduled Demand – whereas some wind farms are Non-Scheduled so act to net off this demand), but does show this trend:

2014-08-22-trendedWindShareofDemand-fromNEM-Review

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

10 Comments on "Is AGL Energy actually the NEM’s greenest generator?"

  1. Paul,
    Note that AGL are the participant for, but not necessarily the owner of those wind farms.

    Cheers,
    Tom

    • Thanks Tom
      There are a number of different ways of assigning companies to generation assets – NEM-Review has three:
      1) Owner – in many cases not the developer, or the company trading in the market. Some are just infrastructure investment funds. Our “Power Supply Schematic” Market Map also highlights these.
      2) Bidder – which I used yesterday – takes account of the entity interacting with AEMO, and in most cases is the owner of the energy generated. But it excludes Non-Scheduled.
      3) Trader – which I used here.
      I understand that slicing the numbers different ways provides different results. The core finding today is that AGL is not insignificant in contributing to growing wind’s market share.
      Paul

      • Paul, this is a result of government legislation not goodwill on the part of AGL. Their current opposition to the RET highlights this. No RET = no “AGL” windfarms. Development of them and on-sale also provided a great short term earnings hole plug via development fees. Maybe you could do an analysis of just how far out of the money those deals were – with the PPA prices published so inflated, seemingly to create up front development fees that they are now suffering “losses” on their green products – refer this weeks profit waterfall diagram….

        • Just for your interest; AGL is the third largest equity investor in Australian renewable energy. Infigen is top with 1,500m., Meridian is a smidgen above AGL both with about 600m. and there are another dozen players with 100m. to 500m. invested. Note that none of the other vertically integrated companies are on the list. (Bloomberg collated data)

  2. Tom is absolutely right, most of their portfolio they developed and built but sold and signed a PPA with the current owner. Their suggested portfolio is nothing other than “greenwashing”.

  3. There are plenty of operators out there who own more wind farms than AGL, this is just a nonsense look at what AGL has contracted. AGL sold out of its wind farms at huge profit, and now they’re trying to destroy the RET. What a joke of an article – it really reduces the credibility of Global Roam as a modelling house. Maybe disclose how much money AGL have paid to you in the last 12 months and how much you hope to get out of them in the next 12 months next time you post your next sycophantic article that attempts to gloss over AGL’s terrible renewable credentials in recent months.

    • Hi Stirling

      Thanks for the comments. You seem to make 4 claims:

      1) That asset ownership, not contracted position, is a truer measure of greenness

      I understand this perspective. There are a number of different ways at looking at who’s greener than others – each has some value, so long as the writer, and the reader, understands the measures used, as I noted here. In this post, I just chose another measure.

      2) That there are larger portfolios (in terms of ownership)

      Some assets, for which AGL still “owns” the market risk (for both electricity and RECs) have been sold to infrastructure funds. This is not uncommon – for wind farms, or other forms of generation as well.

      We’re currently finalising the 2014 issue “Power Supply Schematic” Market Map, which will enable us to collate up totals owned. Perhaps this can be another post at some stage in the future.

      Happy to have a look at your data, if you can share with us (tel 07 3368 4064)?

      3) That GLOBAL-ROAM Pty Ltd is a modelling house

      We’re primarily a software company, not a modelling shop. Our website explains more. I think you have us confused with ROAM Consulting Pty Ltd, a completely separate company (see here for some background).

      4) That this article was “sponsored” in some way by AGL Energy

      This is not the case. In total over the past 12 months, AGL has paid us the royal sum of Aud$1,600 (exGST). I do not expect the following 12 months to be any different.

      Regardless of what they (or any of the other 100+ clients we serve – green, black & indistinct) pay us, that will not influence what we post about on WattClarity.

      Does this help?

      Paul

  4. Yeah OK I got owned.

  5. Interesting article. Yes those ownership stats are based on Bloomberg New Energy Finance data, published in a recent note we released to clients on exposure to assets that could potentially be stranded by changes to the RET. We track ownership and investment in renewable assets worldwide. For more details you can have a look at http://www.bnef.com or contact us at sales.bnef@bloomberg.net if you’d like to know more.

  6. Thanks Kobad & Tom

    It’s been pointed out that the BNEF charts on equity & debt providers are here on RenewEconomy, for those who want to access them

    Paul

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