Following a solid half-year result for AGL’s shareholders, I wanted to take the opportunity now we’re through the results season, to discuss how we’re investing our money for the benefit of our shareholders, customers and the community.
As reported in our first half FY19 result, our Underlying Profit was up 10% on same period in FY18. While a lot of factors contributed to this, this result can be largely attributed to higher wholesale prices on the back of increased input costs for coal and gas, and supply constraints.
But what does this mean for energy prices?
The reality is that across the sector, high wholesale prices and ongoing energy policy uncertainty continues to place upward pressure on electricity prices.
Despite these pressures, we are continuing to invest in our existing generation infrastructure and in new projects, as well as delivering lower standing electricity prices for household and small business customers and expanding loyalty and hardship programs. However, more could be invested with greater energy policy certainty.
Longer term though, investing in additional energy supply is the best way to improve energy reliability and affordability.
Investing in existing generation infrastructure
We're investing more in the availability of our key thermal power generation sites, because the continued availability and reliability of these generation assets is essential to the community's confidence in the energy system as it transitions.
Additionally, the planned maintenance and efficiency upgrades in our existing generation infrastructure serves to increase the output of these generation sites, but not the emissions.
Investing in new projects
There are currently $1.9 billion of new energy supply projects under development. We have another $1.5 billion of projects subject to feasibility, including the pumped hydro project at Bells Mountain in New South Wales.