AGL Energy Limited (AGL) today called on State and Federal Governments to collaborate to deliver an orderly transition of the Australian energy system.

Managing Director and CEO, Andy Vesey, said Australia has two energy policy issues which need sorting out.

“We have ageing energy infrastructure, with around three quarters of Australia’s gas and coal fired generation assets well beyond their design life, and we have a carbon challenge that we made a commitment to address in Paris last year.

“An ageing system is a fragile one, and a key priority needs to be policy measures which allow the renewal of the generation fleet in a cost effective, low-carbon fashion and in a way that provides communities with the certainty they deserve to plan for such a transition.

“As new generation is built, it needs to be fit for the purpose of complementing more renewables, as Australia progressively transitions its energy system,” said Mr Vesey.

In an opinion piece published by AGL today, Mr Vesey called for a policy framework that:

• Ensures the orderly retirement of ageing emissions intensive power stations. Such a policy will enhance energy security by bringing forward the necessary investment in new generation, both renewable and complimentary conventional assets. A closure rule has precedent given the existence of age based limitations on power station operations in Canada
• Revisits the design of complementary policies to the NEM, requiring energy connecting to the Grid beyond the RET to incentivise investment in renewables alongside complementary capacity (e.g. open-cycle gas turbines or advanced batteries). This framework could enable the creation of ‘virtual’ firm low-emissions dispatchable generation
• Establishes a market architecture which sets a glide path to a low carbon electricity system. A baseline and credit emissions intensity trading scheme is a low-cost tool which would integrate emissions intensity into the wholesale electricity price.

AGL also suggested policy makers might consider a staged approach which progressively de-carbonises each state, rather than leaving any individual state to do all of the heavy lifting.

The full opinion piece can be found on AGL’s Blog: www.aglblog.com.au.

About AGL
AGL is one of Australia’s leading integrated energy companies. It is taking action to responsibly reduce its greenhouse gas emissions while providing secure and affordable energy to its customers. Drawing on over 175 years of experience, AGL serves its customers throughout eastern Australia with meeting their energy requirements, including gas, electricity, solar PV and related products and services. 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, solar, landfill gas and biomass.