AGL Energy Limited (AGL) announced today that it has been awarded the contract to provide renewable energy to the Melbourne Water Corporation (MWC).

Commencing 1 July 2010, the contract is for a term of 15 years with an annual requirement of up to 180 GWh of electricity and associated renewable energy certificates (RECs). MWC provides wholesale water supply and sewage services to the retailers City West Water, South East Water and Yarra Valley Water.

AGL will sell MWC energy from the National Electricity Market and RECs from AGL's existing and future renewable assets. The extra demand for renewable energy created by the agreement underpins additional investment by AGL in renewable generation.

Under the agreement, AGL will initially focus on ensuring that 100% of the power needed for Melbourne Water's Sugarloaf Pipeline project, which will move water across steep terrain to Melbourne, will be offset through the purchase of energy from renewable sources.AGL was announced last year as the renewable energy supplier for Victoria's desalination plant and the renewable energy supplier for South Australia's desalination plant. As part of the Victorian deal, AGL committed to the construction of the Oaklands Hill wind farm in south west Victoria.

AGL's Managing Director, Michael Fraser, said: “AGL is Australia’s leading integrated renewable energy company. We can ensure the renewable energy requirements of the Melbourne Water Corporation are met because of our financial strength, our portfolio of renewable energy projects and our technical expertise.

The contract with the Melbourne Water Corporation, combined with the renewable energy supply contracts for the Victorian and South Australian desalination projects, provides AGL with a fixed revenue stream for its renewable energy and increases the value of our development portfolio.

AGL is Australia's largest private owner, operator and developer of renewable generation with more than $2.3 billion worth of accredited renewable projects either built or under construction. In November 2009, AGL officially launched its newest renewable generation asset, the 140 MW hydroelectric Bogong Power Station in the Victorian high country.

AGL has approximately 2,500 MW of renewable generation projects under development consideration.

Mr Fraser concluded: "With the uncertainty surrounding the introduction of the Carbon Pollution Reduction Scheme and the well documented issues with the Renewable Energy Target, it is left to environmentally responsible and sustainability conscious businesses such as Melbourne Water to facilitate the growth of this important industry."

"Through its strong balance sheet and deep pipeline of renewable energy developments, AGL is well positioned to play a leading role in developing Australia's new energy generation assets to meet a low carbon environment."

About AGL

AGL is one of Australia's leading integrated renewable energy companies and is taking action toward creating a sustainable energy future for our investors, communities and customers. Drawing on 175 years of experience, AGL operates retail and merchant energy businesses, power generation assets and an upstream gas portfolio. AGL has one of Australia's largest retail energy and dual fuel customer bases. AGL has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation as well as renewable sources including hydro, wind, landfill gas and biomass. AGL is Australia's largest private owner and operator of renewable energy assets and is looking to further expand this position by exploring a suite of low emission and renewable energy generation development opportunities.