AGL Energy Limited · ASX:AGL
AGL Energy — Investor Day (May 2015)
23 slides from AGL Energy's investor day presentation, May 26, 2015
Slide 1: Electricity/gas market outlook
Electricity/gas1 market outlook Richard Wrightson
Slide 2: Wholesale market drivers
2 Wholesale market drivers 1 › Demand 2 › LNG train ramp up in Queensland 3 › Generation trends > Electricity/gas market outlook > Richard Wrightson > 26 May 2015
Slide 3: Demand outlook
Demand outlook 3 Green shoots signaling the end of decline. Electricity › Solar uptake to continue its growth, storage will become a factor over a longer lead time › Average household consumption drops are being off-set by population growth › Significant increase in load from LNG projects in coming
Slide 4: Residential rooftop solar
Residential rooftop solar 4 Rooftop solar market is large and continues to grow. Solar PV generation (TWh) 25,000 25 20,000 20 15 15,000 10,000 10 5,000 5 -- 2005-06 2008-09 2011-12 2014-15 2017-18 2020-21 2023-24 2026-27 2029-30 2014 NEFR Rapid 2014 NEFR Moderate 2014 NEFR Slow AGL > Electricity/ga
Slide 5: Load profile
Load profile 5 Rooftop solar is reducing mid-day load. QLD Summer day profile (GW) 10,000 10 9 9,000 8 8,000 7,000 7 6,000 6 5 5,000 4 4,000 12:00:00 AM 6:00:00 AM 12:00:00 PM 6:00:00 PM All Time Peak Day (18/1/10) 5/3/15 Heat Wave Peak Day > Electricity/gas market outlook Source: Internal AGL marke
Slide 6: Energy efficiency
Energy efficiency 6 Efficiency gains continue to reduce per capita electricity consumption. Sales weighted average EER1,2 vs Stock vintage weighted average EER Star rating 4.2 4.0 3.8 3.6 Sales 3.4 3.2 Stock 3.0 2.8 2.6 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025 Sales-weighted EER Queensland
Slide 7: Forecast demand: residential and SME
Forecast demand: residential and SME 7 Per capita consumption offset by population growth. Energy consumption 160,000 160 10,000 10.0 Annual energy consumption (TWh) consumption per capita (MWh) Residential and commercial 140,000 9,500 9.5 140 9,000 9.0 120,000 120 8,500 8.5 100,000 100 8,000 8.0 80
Slide 8: Forecast NEM demand: industrial
Forecast NEM demand: industrial 8 Industrial demand expected to grow due to LNG. Large industrial annual energy forecasts (TWh) LNG electricity demand (MW) 60,000 60 1,200 50,000 50 1,000 40,000 40 800 30,000 600 30 Possibility of further 20,000 smelter closures 20 400 10,000 10 200 0 0 0 2005- 2008
Slide 9: Forecast East coast demand: All segments
Forecast East coast demand: All segments 9 Recent demand decline is beginning to moderate. AEMO forecast East coast electricity demand (TWh) 240,000 240 220,000 220 200 200,000 180 180,000 160 160,000 140 140,000 120 120,000 100 100,000 2011-12 2013-14 2015-16 2017-18 2019-20 2021-22 2023-24 Residen
Slide 10: Forecast East coast gas demand
Forecast East coast gas demand 10 LNG driving a step change in demand. AEMO forecast East coast gas demand Potential drivers Impact PJ LNG Current 3 projects perform Short per annum as expected term delays 2,500 Gas High gas prices, falling -ve powered demand, RET outcomes 2,000 generation Industria
Slide 11: Fuel switching
Fuel switching 11 Likely in residential; more limited for industrial. Residential heating costs - Melbourne Running costs for industrial boilers (p.a.) Heating Price ($/GJ) 40 $2,000 $1,800 35 $1,600 Post-LNG price $1,400 30 $1,200 25 Pre-LNG price $1,000 $800 20 $600 $400 15 $200 10 $0 1 2 3 4 5 6
Slide 12: East Coast gas demand - Residential
East Coast gas demand - Residential 12 AGL expects modest decline in demand. AGL forecast of East Coast residential gas demand 220 +23% +16% 200 +2% 180 160 PJ/a 140 -2% 120 100 2011 2015 2019 2023 2027 2031 AGL Forecast AEMO medium AEMO High AEMO Low > Electricity/gas market outlook > Richard Wrigh
Slide 13: East Coast gas - Demand (ex-generation)
East Coast gas - Demand (ex-generation) 13 Decline driven by commercial/industrial sector. AGL forecast of East Coast gas demand 600 500 400 PJ/a 300 200 100 0 2011 2014 2017 2020 2023 2026 2029 2032 Consumer Industrial Transport > Electricity/gas market outlook > Richard Wrightson > 26 May 2015
Slide 14: LNG trains
LNG trains 14 Expect four trains online by the end of 2016. CSG-LNG train ramp (2015-2019) Estimated LNG start-up dates (Apr’15) Capacity (TJ/d) QCLNG T1 4,500 QCLNG T2 4,000 3,500 GLNG T1 3,000 2,500 APLNG T1 2,000 GLNG T2 1,500 1,000 APLNG T2 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 H1 H2 H1 H2 H1 H2 H1 H2 H
Slide 15: Domestic gas market
Domestic gas market 15 AGL portfolio is well positioned. AGL contracted supply – Maximum annual quantity PJ 300 250 200 150 100 50 0 2015 2017 2019 2021 2023 2025 2027 Fixed Price Portfolio Gloucester Price Review New GBJV GSA Residential C&I > Electricity/gas market outlook > Richard Wrightson > 26
Slide 16: Short term demand
Short term demand 16 Will LNG demand continue in a lower oil price world? › LNG demand is met by both LNG and oil prices long-term supply contracts and Brent Spot short/spot market volumes LNG (AUD/GJ) (USD/Barrel) 40 160 › Asian spot prices have fallen 35 140 but Qld LNG committed under 120 long te
Slide 17: LGC market model: 33,000 GWh by 2020
LGC market model: 33,000 GWh by 2020 17 Short-term C&I contracts unlikely to support new projects and PPAs. Large-Scale Generation Certificate (LGC) market forecast for demand & supply GWh MW 60,000 6,000 50,000 5,000 40,000 4,000 30,000 3,000 20,000 2,000 10,000 1,000 0 0 2011 2014 2017 2020 2023 2
Slide 18: Queensland gas generation
Queensland gas generation 18 Significant reduction expected once ramp gas disappears. Gas-fired generation output - Queensland GWh $/Gj 1,600 $9 1,400 $8 $7 1,200 $6 1,000 $5 800 $4 600 $3 400 $2 200 $1 - $0 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 GWh $/Gj > Electricity
Slide 19: NSW coal generation (ex-AGL Macquarie)
NSW coal generation (ex-AGL Macquarie) 19 NSW falls driven by declines at Mt Piper and Wallerawang. NSW monthly black coal generation (TWh (as-generated)) 4,000 40 3,500 35 30 3,000 2,500 25 20 2,000 1,500 15 1,000 10 500 5 0 Eraring Munmorah Mt Piper Redbank Vales Point Wallerawang > Electricity/ga
Slide 20: NEM-wide energy generation vs. Demand
NEM-wide energy generation vs. Demand 20 AGL’s generation backed by low cost fuel supply. Tier Retailer One level of vertical integration (TWh) 50 50,000 45 45,000 40,000 40 35 35,000 30 30,000 25,000 25 20 20,000 15 15,000 10 10,000 5 5,000 -- Origin EA AGL Wind Coal Hydro CCGT Gas ST Solar GT Ener
Slide 21: Are we there yet?
21 Are we there yet? > Presentation title > Author > Date (Verdana 10pt)
Slide 22: Forward contract price
Forward contract price 22 Signs of strengthening wholesale prices. ASX Energy - Daily settlement price (Flat FY Swap) ($/MWh) $55 $50 $45 $40 $35 $30 $25 Jul-2014 Oct-2014 Jan-2015 Apr-2015 NSW QLD SA VIC > Electricity/gas market outlook > Richard Wrightson > 26 May 2015
Slide 23: East Coast gas deals
East Coast gas deals 23 Oil price movements has impacted recent deal making. Energy Quest report March 2015 $AUD/GJ $11 $10 $9 $8 $7 $6 $5 Jul-2009 Mar-2010 Nov-2010 Jul-2011 Apr-2012 Dec-2012 Aug-2013 Apr-2014 Dec-2014 Sep-2015 STO/GLNG OE/GLNG Westside/GLNG AGL/XSTRATA OE/MMG Beach Energy/OE Esso-