AGL Energy, one of Australia’s largest energy utilities and one of the country’s largest polluters, has announced Friday that it intends to start on a path that will conclude in 2050 with complete decarbonization.
Which I can only therefore assume means something horribly wrong is about to happen in Australia, to counterbalance such out-of-the-blue good news.
AGL Energy released a new Greenhouse Gas (GHG) Policy on Friday, “providing a pathway to decarbonization of its electricity generation by 2050” — and considering just how much of AGL’s electricity is generated by fossil fuels, this is going to be quite an achievement.
A report published by the Australian Conservation Foundation in March of this year concluded that AGL’s total emissions in 2013-2014 amounted to 19,928,540 tonnes CO2-e: in fact, 94% of AGL’s reported facility level greenhouse gas emissions were generated from a single power station — the brown coal-fired Loy Yang A plant in Victoria.
At the time, however, the report also quoted AGL as saying that “longer-term, AGL believes that achievement of a 450 parts per million goal may require the complete decarbonization of the electricity by mid-century.”
Cue the new GHG Policy, and that seems to be exactly their intentions, with Managing Director and CEO Andy Vesey saying that the company not only recognizes the role it must place in gradually reducing greenhouse gas emissions, but that it intends to actually do something: “Australia currently relies significantly on coal and gas to power its homes and industries with 88% of electricity produced from fossil fuels. To support the Commonwealth Government’s commitment to work towards the two degree goal, companies such as AGL need to take the lead,” said Mr Vesey.
Ironically, it would seem that AGL has thrown in their little reference to the Government’s commitment as a bit of a dig, considering the almost total lack of motivation the current Australian Government has to helping address a two degree goal.
Mr Vesey continues, outlining the specifics of AGL’s plans:
“This will be a measured process of decarbonisation, but one which I am proud to spearhead on behalf of AGL. AGL is the nation’s largest privately owned renewable energy investor and we will continue to invest in low-emissions technologies to reduce the emissions intensity of Australia’s electricity supply. 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. Decarbonisation and modernisation of Australia’s electricity system are important goals requiring effective policy.”
From an outsider’s perspective, it could not be more clear that AGL is clearly dismissing the current Government and taking matters into their own hands.
Specifically, the GHG Policy states that AGL will:
- Continue to provide the market with safe, reliable, affordable and sustainable energy options
- Not build, finance or acquire new conventional coal-fired power stations in Australia (i.e. 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 GHG 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 all capital expenditure decisions relating to electricity generation
- 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.
There are obvious holes to poke in this news, such as the extended lifetime of existing coal-fired plants, and the seeming inevitability of companies making such commitments; one need only look at the global market for fossil fuels to see that investors are not likely to invest in new coal-fired plants or investments any more, so companies must make other plans.
However, I’m going to take a day off from being Mr. Cynical, as this news is simply too good to dampen by criticizing.
AGL is one of the most recognizable brands here in Australia for electricity production, with ads in every state and a long history as well. To have such a recognizable company come out in clear opposition to the lackluster politics being played in Australia’s capital is a good thing, and one we need to applaud — loudly.
“It will be an ongoing, progressive process, managing the efficient operations of our assets, and the transition of our people into new generation technologies and careers,” Mr. Vesey said. Well let’s applaud that sentiment, and hope that economic pressures along the way may speed up the process, instead of knocking down the announcement from the outset.