Antinuclear

The fact is that this company makes most of its earnings off the back of carbon producing coal-fired energy production and is using the proceeds to seed a $3 billion renewable energy fund that will invest in clean sources of power like solar and wind.

There is nothing new age environmentally conscious in this. Like any corporation that is looking to maximise returns, AGL (like several others) understands that the writing is on the wall for the the production of dirty energy – in the longer term. Thus it is making an each-way bet on the future.

Make no mistake, companies like AGL make investment decisions primarily with reference to investment returns rather than environmental outcomes – regardless of the rhetoric. This is the company that last week announced it was winding down its interest in the coal seam gas industry.

Once again it was influenced by community uproar and protests about fracking in their back yards but the decision was one centred on the the gas supply/demand equation and the capital costs of firming up an unreliable coal seam gas resource……..

Renewables tipped to pay off

Longer term it is clear that AGL is taking a punt that the balance will ultimately move between clean renewable energy and the dirty stuff which earns its healthy profits today – hence this week’s creations of the renewables fund.

One of its existing clean energy assets will be effectively vended into this new renewables fund…….

To really move the dial towards producing cleaner energy, companies like AGL need stronger support from the government which under the Abbott government gave them little certainty about how much support and financial incentive would be given to green policies.

And AGL is the first to admit that the changes in government policies over the past 4 -5 years has made investment decisions difficult.

Ultimately AGL, which is the country’s largest generator, its largest emitter of greenhouse gases and the largest builder and operator of renewable energy is a particularly important part of the conversation about Australia’s energy use and generation.

And as such the allocation of its investment should exert some influence on government policy. But it is limited in how fulsome any commitment to investment in clean energy can be until it can be secure with the level and the timing it will receive from legislators. : http://www.theage.com.au/business/comment-and-analysis/agl-puts-an-eachway-bet-on-renewable-energy-20160210-gmqh1t#ixzz3zu51N8JO