Daily Management Review

AGL vows to stop using fossil fuels by 2050


Australia's largest power generators AGL Energy has announced that it would do away with traditional coal-fired electricity by 2050 and focus its investment on renewable energy.

The company’s new chief executive Andy Vesey made the statement on Friday and vowed to give more importance to renewable energy plans. He noted that the company will not finance or build new coal-fired power stations and it will not extend the operating life of any existing coal-fired power stations beyond 2050. The company may use next-generation coal power stations which use carbon capture and storage technology to reduce greenhouse gas emissions. It is of importance that the company has significant gas-fired generation assets.

"Australia currently relies significantly on coal and gas to power its homes and industries with 88 per cent of 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," Mr Vesey said.He also noted that the company has taken up with Federal Governemnt to reduce greenhouse gas emission.
The company recently opened a 102-megawatt Nyngan Solar Plant near Dubbo in Australia.

AGL is the largest holder of coal-fired power stations in Australia. The company’s $1.5 billion acquisition of Macquarie Generation assets from the NSW government last year which includes the Bayswater and Liddell power stations, as well as Loy Yang power station in Victoria has also contributed to this. All the asset contracts are to expire by the middle of the century including Loy Yang in 2048.

Energy market analysts are of the opinion that though the move is welcome, especially in the perspective of clean energy, fossil fuel may anyway depreciate significantly and diminish in value by 2050. Besides AGL, Australia’s Energy Australia has also made a commitment to not use coal-fired power stations by 2050.

Australian coal miners are already under pressure due to weaker demand from China. Data out on Wednesday showed the slowing economy and clean energy push from the Chinese government had resulted in a 10 per cent drop in coal-fired power stations during the first three months of the year. China is facing the downsides of using non renewable energy. The country posts record-level pollution and smog, deteriorating living conditions in its cities.

"The Chinese government is planning to reform the power sector and this reform means the proportion of coal-fired power will be further reduced," said Han Xiaoping, chief information officer at China Energy Net Consulting.