AGL Energy looks at solar, storage and home energy solutions

AGl Energy says it is in talks with a number of battery storage suppliers at tries to ready itself for the emergence of a new decentralized electricity model.

The company – one of the three biggest retailers in Australia, and now the largest generator – says it is clear there will be rapid changes to technologies and the incumbent business models of energy utilities.

It said in its annual results presentation on Wednesday that is looking to deliver more “in-home” energy services, including smart meters, solar PV and energy storage. And it is looking to develop strategic partnerships.

“This new business model will also give AGL a capability and future growth opportunity,” it said in its report.

It is clear that incumbent utilities are facing massive pressure from the emergence of solar, and storage, and a range of software solutions, and new home energy providers. Just how quickly incumbent utilities can respond to that will be a key to their future.

RenewEconomy asked AGL Energy managing director Michael Fraser at an analyst briefing when such technologies would be brought to market.

“When is here and now,” Fraser said. “It is pretty obvious that technology is going to continue to develop – and not just technology, but disruptive business models.”

The key, he said, was working out how to plug that together. Work was underway on “solar propositions”, and the roll-out of its smart metering products, and AGL Energy was also in discussion with a number of major energy storage suppliers.

RenewEconomy asked Fraser how quickly these new technologies would impact the market, given the apparent surprise at the major impact that rooftop solar had in Australia in elsewhere

“The fact that we are talking openly about that capability clearly recognizes” the ability of technology to “sneak up” on the market,” he said. “We aim to get ahead of the curve in that respect.”

“Often technologies  … when they take off come at you quicker than you expect. We go into this with our eyes wide open. That’s why we are taking the steps that we are.”

AGL Energy’s approach follows recent remarks by EnergyAustralia, which has said that the market faces major structural change from the impact of rooftop solar, and that the industry was at a major inflection point, with usage falling, solar parity reached, and the emergence of storage and micro-grids that will bypassing- or at least challenge – traditional network businesses.

The table below illustrates how AGL Energy sees the evolution of the energy markets, and the different technologies that are influencing that. Still, Fraser said he believed that the centralized model of coal generation would continue “for some time”, given the sheer weight of capacity of the nation’s coal fired generators.

“We think it willcontinue to be dominated by that (centralised) model for some time to come. Having said that, we also recognise that there are very disruptive technologies and business models that will present challenges to that (centralised) business model,” he said.

“These initiatives will allow us to transition that business” from a centralised to a decentralised world.


agl future



6 responses to “AGL Energy looks at solar, storage and home energy solutions”

  1. Chris Fraser Avatar
    Chris Fraser

    Clearly AGL have several business interests going all at once. On the one hand, they have this short-term goal in regard to the use of coal for central energy generation, but also have this technology bent as an eye on the future. Given that tech promises the use of alternative energy sources, savings and efficiencies, does not one of those businesses suffer at the success of the other ? … it’s a bit confusing. Perhaps it boils down to simply coping with a clear and present malignant political regime, against the grain of the rest of the world, rather than finding business leaders with true vision. When they are all faced with uncertainty and scarcity, perhaps many of them tend to think alike.

  2. Rob G Avatar
    Rob G

    The message is clear for these guys, either change your business model or face certain death. Have AGL come to finally realise this?! A smart utility would be investing heavily in renewables, knowing full well the gains will be quick and that coal is basically dead. They would be looking at a new network management, smart grids and working closer with communities to create local power. Now is the time for one of these ‘dirty’ utilities to out think the other 2 and grab this new and ready market before 4th player enters the fray and does it.

  3. Malcolm Green Avatar
    Malcolm Green

    ‘At the very moment humanity has arrived at the evolutionary point where we
    do have the option to ‘make it,’ I find it startling to discover
    that all the great governments, the five great religions, and most of
    big business would find it absolutely devastating to their
    continuance to have humanity become a physical, metabolic, economic
    success. All the political, religious, and moneymaking institutions’
    power is built upon those institutions’ expertise in ministering
    to, and ameliorating, the suffering, want, pain, and fears resultant
    upon the mis-assumption of a fundamental inadequacy of life support
    on our planet and the consequent misfortune of the majority of

    R. Buckminster Fuller

  4. Ian Avatar

    Great forward planning by AGL. I would refine this by saying they could lease battery packs for electric vehicles. The actual vehicle could be owned privately but the battery pack leased from AGL. The vehicle owner could buy a certain monthly plan containing a number of KWH and then recharge using AGL electricity from a home or work recharging point. AGL would have the right to charge the batteries or draw from the batteries whilst these are connected to their network. This way the utility will have new consumption for their power,they can manage the peak consumption and home grown energy can be used for transportation. A large enough market could allow the manufacture of batteries in this country, bringing jobs back to Australia. Plus a GWH factory could provide another load for the customer- hungery utility.

    1. Ian Avatar

      Expanding on the above idea: the battery factory could provide electric storage at the production phase , whilst new batteries are being tested and at the end-of-life stage when the battery packs are recalled for recycling.

    2. Paul Andrew Avatar
      Paul Andrew

      with most if not all car manufacturers closing down their australian manufacturing operations, now is a perfect time to utilise their physical and intellectual assets by transitioning to start building electric cars and battery packs. maybe tesla should think about taking them over? shouldn’t cost too much seeing as they’re being abandoned and would reduce clean up costs if a lot of the plant could be re-used

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