Agl Energy Limited · ASX:AGL
Agl Energy — AmCham 'Energy markets in transition' presentation, March 2017
13 slides from Agl Energy's conference presentation, Mar 17, 2017
Slide 1: Energy markets in transition
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Slide 2: Misconceptions about energy markets
Slide 3: The National Electricity Market
TRANSMISSION INFRASTRUCTURE The National Electricity Market The National Electricity Market ATA (NEM) suppies around 19 Million people. Physically covers over 5,000 km. ey SA Itis the longest alternative current system in the Ny a Lh 40,000 km of transmissionjin P| Xe x i Ry 1 \ Sa AmCham Andy Vesey
Slide 4: The energy system of yesterday
The energy system of yesterday Large coal-fired power stations transporting power through transmission and distribution to customers Transmission Lines Carry electricity long distances Generator Produces electricity \\ V \ >> > Generator Transformer Converts low voltage electricity to high voltage f
Slide 5: The energy system of tomorrow
The energy system of tomorrow Diverse large-scale and small-scale low-emissions generation supplied through an intelligent network Transmission Lines Carry electricity long distances Generator Produces electricity ra \ > Generator Transformer Converts low voltage electricity to high voltage for effi
Slide 6: Wholesale cost drivers
Wholesale cost drivers Pricing driven by need to invest in new plants gy nnn genes Hazelwood closure i esses reseeeemeareeeiomecamaeememeareseneeienme cree creases rman ietiarTOEeR EEE ERR Geese omeERETEI Rumours of i Hazelwood closure == Calendar 2019 = === Calendar 2018 = en, ae == Calendar 2017 f
Slide 7: Wholesale cost drivers
Wholesale cost drivers Long-term costs likely to be driven lower due to technology 420 covsssssessseveetsssesscssesssssssnennnnseeeteeeesessesssssssnsnnnneeteeeeseeeeeeeeesssnnnnmumisseeeeeeseeseeceecensnnss| lessennnsneseteeseeeeese| 9 eeeeeeeeeeessenssnnsnmunmeteeeeeeeeeceneeeeeete = aii See lll c
Slide 8: Intermittency
intermittency We need to shift away from ‘baseload’ plant to efficient more flexible gas-fired plant and storage Demand (MW) m Wind Output = “Firm” Output 2000 | | eee let, Uh ys I po nob of sooth db | ma WI bil | | weve | 1500 my yy 1000 } | 500 Chronological Time (2016) SA Source: Market data NAGL
Slide 9: Retailing and competition behind the meter
Retailing and competition behind the meter The gap between ‘average’ cost and ‘marginal cost likely to widen — increasing competitive forces | Gap increases with deployment of more renewables Annual Electricity Cost ($pa) Descending scale of retailer offers =m Averagecost === Marginalcost Retail off
Slide 10: Supporting vulnerable customers
supporting vulnerable customers > $6.5m Affordability Initiative provides debt relief, Financial counsellors, solar for high consumers. > Building on this with AGL’s Fairer Way package: » Concession card and hardship program customers are not charged late fees » Customers participating in AGL’s hard
Slide 11: Retailing and competition behind the meter
Retailing and competition behind the meter Traditional retailing largely the provision of ‘risk management services Energy demand kW 2AM = 2AM 4am 6AM 8AM 10 AM 12PM 2PM 4PM 6PM 8PM 10 PM = [mports/exportsfromthegrid |) household energy demand Source: Orton, Nelson, Pierce and Chappel NSAGL * Energy
Slide 12: Retailing and competition behind the meter
Retailing and competition behind the meter Retailing of the Future will be a mix of ‘risk management’, new products and customer service Energy demend kW > Supply from the grid | Supply fromsolar Pv J Battery discharge mmm Household energy use = = = Imports/exports from the grid Source: Orton, Nelso
Slide 13: Correcting misconceptions
Correcting misconceptions Some recommendations for reform > Wholesale prices are rising because we need new investment and prices need to reflect both operating costs and the cost of building new power stations. > But longer-term, prices are likely to moderate as new technologies fall in cost. > We
AGL Energy — AmCham 'Energy markets in transition' presentation, March 2017 on 6ix