Summary.
Increase in Greenhouse Footprint – AGL acquires Torrens Island Power Station and build more capacity
At AGL, we use three approaches or ‘footprints’ to measure and explain the annual greenhouse gas impact of our operations, our equity interests and the energy we supply to customers.
Essentially, we treat all assets over which we have operational control as our Operational Footprint. This includes assets where AGL staff have control of the operating policies such as health, safety and environment at the site. In some cases, this includes wind farms, such as Wattle Point and Hallett (Stage 1), where AGL does not actually own the asset, but operates it. This does not include assets such as Yabulu where AGL does not operate the asset, rather has full despatch rights to its output.
Over 2007/08, our operational footprint grew six fold, from 0.469 MtCO2e to 2.730 MtCO2e.
This increase in emissions is a reflection of our focus on building our own generation portfolio which is reflected in our increase in total energy production from 15 PJ in 2006/07 to 26 PJ in 2007/088. The majority of this growth is a direct result of AGL taking ownership of the Torrens Island Power Station (commonly referred to as TIPS9), an asset that already existed in Australia and was simply run by another company. To that end, it was an existing contributor to Australia’s Greenhouse footprint.
We also measure our Equity Footprint. The Equity Footprint sets out AGL’s share (by percentage investment level) of the emissions from our fully or partially owned entities. The Equity Footprint indicates to AGL shareholders the greenhouse gas impacts associated with their investment.
We have had a 23% increase in the size of our Australian based Equity Footprint, due to the increase in our Operational Footprint, largely due to the inclusion of TIPS. We also saw a 25% decrease in the size of our Overseas based Equity Footprint, the direct result of lower emissions from the operation of the upstream gas and oil interests we have in Papua New Guinea.
The third footprint that we measure is AGL’s Energy Supply Footprint. This covers greenhouse gas emissions resulting from the production, transportation, distribution and consumption of electricity and gas throughout the energy supply chain. Emissions resulting from the supply of energy to our customers increased relative to 2006/07. This is largely a direct result of an overall increase in AGL customers (some 34,000 new AGL retail customers were added this year) and overall growth in energy consumption resulting from strong growth in the Australian economy.
Lower greenhouse intensity of electricity output with increased investment in low-emission and renewable generation capacity
Using fuels that have lower greenhouse emissions per unit of electricity generated and working out smarter ways to make equipment more efficient can help to decrease the greenhouse intensity of our business operations and improve our footprint.
During the year our purchase of the gas-fired Torrens Island Power Station (commonly referred to as TIPS), the acquisition of an interest in the output from the gas-fired Oakey and Yabulu Power Stations and the ongoing development of our renewable energy assets (including the commissioning of the Hallett (Stage 1) Wind Farm) reduced the greenhouse intensity of the electricity generation output that contributes to AGL’s bottom line.
Our investment in low-emission gas-fired generation counterbalanced increases in greenhouse intensity resulting from reduced output from our hydro assets due to the drought. It is forecasted that improved conditions in the coming year will alleviate some of these pressures and that we will be able to generate greater levels of hydro power.
Current hydro development opportunities such as the 140MW expansion of Kiewa Scheme program at Bogong will also add to our existing renewable generation capacity. This program is a key plank of our hydro program, being a drought resistant hydro asset, gaining its flows from the annual snow melts and the Rocky Valley Dam in the Victorian Alpine region.
The result of this investment strategy and the operating conditions over the year meant that the overall GHG intensity of AGL’s owned/controlled generation (including Loy Yang Power) has decreased from 0.99 tCO2e/MWh in 2006/07 to 0.85 tCO2e/MWh. This is lower than the average greenhouse intensity of the National Electricity Market (NEM) for the period of 1.03 t CO2e/MWh10.
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