Thursday 25 June 2009

Windward-bound AGL sets a green course

Age
Friday 19/6/2009 Page: 4

AGL Energy has bought two windfarm developments from Transfield Services, the latest in a string of wind deals signed despite doubts over the Federal Government's renewable energy target. The $9 million purchase gives AGL the right to develop up to 236 MWs of extra wind capacity at Barn Hill, near Adelaide, and Crows Nest in Queensland.

The move follows further wind acquisitions by AGL and its rival Origin Energy in recent months, as the utilities prepare for a Federal Government policy that would require 20% of all power to cone from renewable energy from 2020. The policy is expected to drive up to $27 billion in renewable investment, and wind is set to dominate because it is the cheapest form of green energy. However, yesterday the Senate deferred the Renewable Energy Target Bill to a Senate committee, sparking an outcry from AGL and others in the industry.

AGL's managing director Michael Fraser said it was disappointing to see the bill used for "political football" between the parties over their climate change policies. "This unnecessary delay will impose additional pressures on an industry which is working very hard to promote job creation in a challenging economic climate."

The Clean Energy Council, which includes fossil fuel generators in its members, also slammed the Senate's move. AGL is positioning itself as the largest developer of renewable energy, while its listed rival, Origin Energy, has focused more on gas. Developing the sites acquired yesterday to full capacity could cost more than $600 million, and in March, AGL said it would spend $341 million expanding its Hallett project in South Australia.

Last month, Origin Energy bought wind development sites in Victoria but did not disclose a price. Royal Bank of Scotland analyst Jason Mabee said AGL was leading the wind energy race between the two locally listed utilities. "My view that AGL has definitely secured some of the best sites early on," Mr Mabee said. AGL shares rose 2% to $13.94 and Transfield shares fell 0.8% to $2.62.

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