A new era of energy is here

One thing is certain – the energy industry has been transformed forever. With environmental factors, stricter regulations and a carbon-constrained future, energy costs are on the way up. With demand also on the rise, we have entered a dynamic new era of energy where sustainable and renewable solutions must lead the way. Are you prepared for the new energy reality? It has just arrived.

The power to change

The supply of traditional gas and electricity are part of today’s energy picture, but they’re not the future. At AGL, we’re committed to climate change and to developing integrated and sustainable solutions that will take us through the next century and beyond. Whether it’s our Hallett wind farms in South Australia or the Bogong hydroelectric power station in Victoria, we’ve been investing seriously in sustainable energy businesses for years.

AGL was the first Australian energy company to provide an accredited Green energy product, and was the first Australian company to join the Chicago Climate Exchange, the world’s first carbon trading exchange. In joining the CCX, AGL has committed to a 6% reduction in emissions, based on 1998/2001 levels. It is the only Australian energy company which has imposed such strict carbon limits on itself.

AGL commands a pre-eminent position in preparation for a future carbon-constrained world. In little more than 12 months the company has committed to invest m

ore than $2 billion in renewable generation and has under construction a number of wind and new hydro facilities.

It’s an exciting time to be in the energy business. We are looking forward to the challenge and are already tackling it head on. If you want to prepare for tomorrow, AGL Carbon Management Services can help you today.

About AGL Energy Limited

AGL is Australia’s leading renewable energy company and is Australia’s largest private owner, operator and developer of renewable generation assets.

AGL is taking action towards creating a sustainable energy future for our investors, communities and customers. AGL has major investments in hydro and wind, as well as ongoing developments in key renewable areas including solar, geothermal, biomass, bagasse and landfill gas. AGL also operates retail, merchant energy and upstream gas businesses and has over three million customer accounts.

Listed on the Australian Securities Exchange (ASX code: AGK), AGL is an S&P/ASX 50 company. AGL has been operating in Australia for 170 years and was one of its first listed companies. AGL maintains a BBB investment grade credit rating from Standard & Poor’s.

AGL’s strategy is about building a world class customer focussed energy company:

• Leverage leading retail position to capture value and growth opportunities.
• Grow upstream gas and power generation portfolios.
• Market leadership in renewables to benefit under a carbon constrained future.
• Drive retail economies of scale and enhance customer service capability.

Your sustainable energy partner

Combining our experienced in-house energy and carbon management teams with specialist industry partners, AGL offers end-to-end energy and sustainability solutions for businesses.

With a proven track record of results over many years, we can work with your business to lower energy consumption, reduce your carbon footprint, meet your compliance requirements, save money and prepare for the realities of a carbon-constrained future.

By partnering with AGL, you receive competitive rates that save you money today, plus the expertise to manage risk, secure your long term energy supply and face tomorrow’s energy reality with greater certainty. Ranging from assessment and strategy development right through to implementation, results reporting and optimisation, our range of tailored solutions include:

• Total carbon management services
• Energy efficiency & conservation
• Sustainable energy strategy
• GreenPower renewable energy
• Performance benchmarking and KPIs
• Lighting, power & air conditioning audits
• Accredited NABERS assessments
• Energy co-generation
• Assistance with Government Grants
• Highly competitive gas and electricity
• End-to-end project management

We understand that a thick report on a shelf is not helpful. That’s why we prepare practical recommendations and then work with you to implement them to realise the benefits.

Energy in Action

AGL delivers dozens of major sustainability projects each year across Australia, and currently has over $72 million in energy assets under management on behalf of our customers. We help many of Australia’s leading businesses reduce energy usage, save money and prepare for the new energy reality.

In our experience, within most organisations today there are a number of ‘quick-win’ energy projects that can deliver a significant return on investment in less than three years.

The investment may be a lot less than you think, and the potential savings much greater. We invite you to join us in leading the sustainable energy solution.

Managing carbon risk in an uncertain regulatory environment – Compliance Only?

Australian business has been operating on a two tier basis for the past five to ten years. Tier one has been focussing of managing carbon and energy risk, tier two has been managing risk of non-compliance of carbon regulation.

The majority of corporate activity in carbon management over past ten years has been in sustainability reporting or managing risk of non-compliance (i.e. reporting of activities, emissions or energy efficiency opportunities).  However, with an increasing volume and complexity of regulation, this process is increasingly resource intensive and absorbs an ever expanding number of resources – resulting in more ‘fire fighting’ and less review of business impacts.

A smaller selection of Australian business has altered the focus towards managing carbon risk.  The impetus for this are varied, sometimes corporate targets, stakeholder/investor demand or obvious exposure to carbon and energy price shocks.  Managing carbon risk is much broader than mere non-compliance.  Whereas non-compliance may result in a fine or reputational risk, broader carbon risk has potential impacts on the balance sheet, overall competitiveness and business sustainability.

Carbon risk is comprised of a number of elements: regulatory; business continuance; supply chain management; and an understanding of energy management.

The increasing regulation and profound structural impacts to the economy warrant a consideration of carbon risk in business planning.

Understanding the Regulatory and Policy Framework

The first step in managing carbon risk is to understand the regulatory and policy framework with which you are faced. This includes existing legislation that currently affects your business and proposed policies that may affect your business.

Identifying adverse outcomes of a proposed policy early on enable a business to engage with the policy maker to seek amendment to the policy to reduce business risks. Examples include engagement with the Department of Climate Change for consideration of emissions intensive trade exposed (EITE) elements of the Government’s proposed Carbon Pollution Reduction Scheme (CPRS).

Managing the Risk

Many businesses are paralysed when dealing with the uncertainty. The important thing for businesses to understand is that the ‘uncertainty’ is mostly around the processes that the scheme will employ or require businesses to employ. Of the various policies that have been proposed, whether they be an emissions trading scheme, a carbon tax or a form of incentive scheme, the opportunities for internal abatement in a business typically remain unchanged. The abatement opportunities that are present are the same opportunities regardless of the scheme; i.e. they will reduce the number of permits that must be purchased, the amount of carbon tax to be paid or will increase the eligibility for incentive payments. The actual projects (i.e. the internal abatement opportunities) are business specific not scheme specific. Such opportunities can include: fuel switching; optimi

sation of processes; embedded generation, renewable energy and energy efficiency: including lighting, motors, air conditioning and handling; and optimisation of controls. AGL Carbon Management Services has been working with many of its industrial and commercial customers to identify, evaluate and implement these projects to drive abatement, improve profitability and reduce carbon risk.

AGL Carbon Management Services’ experience with our clients has been that abatement opportunities are typically already justified with current energy costs, however, when projected carbon prices are factored in the implementation of these projects becomes highly attractive. Identifying these opportunities is crucial in managing carbon risk regardless of the scheme implemented.

Powering tomorrow starts today

Want to see how AGL Carbon Management Services could help save you energy and money today, and prepare your business for a carbon-constrained tomorrow? Please contact your AGL Account team or visit agl.com.au/cms