AGL has launched the ‘Powering Australian Renewables Fund’ in a bid to drive new large-scale renewable generation projects, and announced a new partnership with US-based energy storage company Sunverge.
AGL says that the new fund will develop over 1,000 MW of large-scale renewable energy generation – enough to power more than 400,000 households – at a cost of between $2 and $3 billion.
AGL will provide substantial cornerstone equity of $200 million, with contributions of equity from a “small number of parties” – e.g. superannuation funds and banks – being sought. The utility giant is also looking to implement new pricing models for purchasing the power produced by the fund.
Instead of investing in single assets, the fund provides the opportunity for investors to finance a portfolio of renewable assets. In a company blog post, AGL Head of Economics, Policy and Sustainability Tim Nelson said the sentiment that financing innovation must keep up with technology innovation was the driving force behind the company’s new corporate entity.
“For some time, I have been articulating that given the technology and market transition underway, traditional renewable energy financing techniques such as one entity taking all market disruption risk over 15 years will no longer be acceptable to providers of debt and equity. “AGL intends to provide relatively firm short-term PPA style support with renegotiation parameters beyond approximately five years.”
Clean Energy Council (CEC) Chief Executive Kane Thornton said AGL’s commitment is crucial to unlocking the many thousands of megawatts of renewable energy projects that are ready and waiting to be built.
“With this sort of innovation, Australia can make real progress toward our 2020 Renewable Energy Target and take advantage of our world-class wind, sun and water to go much further beyond 2020.
“The industry looks forward to working with AGL on the details of its new investment vehicle and working with all liable parties to ensure they deliver on their obligations to bring forward more renewable energy in the future.”
The video below provides a snapshot of AGL’s new financing initiative.
Sunverge partnership to increase uptake of residential storage in Australia
It has been a busy day for AGL, with the utility giant also taking the opportunity to announce a US$20 million investment in US-based energy storage and management company, Sunverge.
As part of the agreement, AGL will be the exclusive channel partner for the sales of Sunverge’s Solar Integration System in Australia. The system combines advanced lithium batteries with a control platform that allows power flows to and from the grid to be controlled as part of a virtual power plant.
AGL Managing Director and Chief Executive Andy Vesey said the agreement gives AGL early mover advantage and helps the company accelerate its capabilities in the storage space.
“An emerging leader in demand response management for premises-based energy storage, Sunverge’s innovative energy solution will help us better meet the needs of our customers in a carbon-constrained energy future,” Mr Vesey said.
“This future is increasingly based on decentralised products and services including digital metering, solar PV systems, as well as new technologies such as batteries, electric vehicles and other “˜beyond the meter’ energy solutions,” he added.
AGL’s US$20 million investment is part of a $US36.5 million Series C round of funding alongside current investors SBCVC, Siemens Venture Capital, Total Energy Ventures International and the Australian Renewable Energy Agency (ARENA).
ARENA Chief Executive Ivor Frischknecht said Sunverge’s latest investment win will allow it to employ more staff in Australia and explore options for locally manufacturing its systems in the future.
“Residential battery storage is currently in its infancy in Australia. While only a small number of systems are currently installed, there is a lot of interest in the technology.
“The partnership between AGL and Sunverge will accelerate the roll-out of a state-of-the-art grid integrated battery storage solution to Australia’s large household storage market.”
Mr Frischknecht said he expects to see energy retailers firm up business models for selling new storage products and work through some of the regulatory constraints facing Australia’s emerging storage market.