Australia's AGL to Acquire 2 Firms with BESS, Solar Projects

Australian energy firm AGL Energy Limited is fully acquiring two renewable energy companies for 165.38 million (AUD 250 million).

AGL has entered into a binding agreement for the acquisition of 100 percent of the shares and units in Firm Power and Terrain Solar, the Sydney-based company said in an announcement on the Australia Securities Exchange.

Firm Power is a battery energy storage system (BESS) developer with 21 projects in development, while Terrain Solar is a solar project developer with six projects in development. The two renewable project companies have a combined development pipeline of 8.1 gigawatts (GW). This includes 6.1 GW of grid-scale BESS projects across New South Wales (2.3 GW), Queensland (2.7 GW), Victoria (0.3 GW), Western Australia (0.5 GW) and South Australia (0.3 GW), as well as 1.8 GW of solar projects across New South Wales (0.5 GW), Queensland (1.1 GW), Western Australia (0.1 GW), and South Australia (under 0.1 GW). The pipeline also includes a 250 megawatt (MW) onshore wind project in New South Wales.

AGL Managing Director and CEO Damien Nicks said, “Today’s announcement demonstrates our commitment to grow and accelerate our development pipeline, which is already 6.2 GW, so that AGL is best placed to take advantage of market conditions and prioritise developments that generate the best long-term value and be a leader in the energy transition”.

“The group’s development pipeline includes several mid-sized BESS projects, ranging between 200 and 500 MW and two-to-eight-hours storage duration,” Nicks continued. “We believe this high-quality development pipeline presents strong optionality for AGL, focusing on firming capacity which will be required to firm new renewable generation for our customer base and portfolio as thermal baseload generation exits the NEM [National Energy Market]”.

The acquisition consideration of approximately AUD 250 million is expected to be funded from cash on AGL’s balance sheet, according to the release. The proposed acquisition is subject to customary conditions precedent, with completion anticipated within the year.

AGL operates Australia’s largest private electricity generation portfolio within the National Electricity Market, comprising coal and gas-fired generation, renewable energy sources such as wind, hydro and solar, batteries and other firming technology, and storage assets. The company said it is one of Australia’s leading private investors in renewable energy.

In related developments regarding the energy transition front, the Australian government awarded new permits for offshore gas exploration and carbon capture and storage (CCS) exploration. Gas is needed to back up renewable energy and support the economy as Australia makes the transition to net zero emissions, according to an earlier news release from the Ministers for the Department of Industry, Science and Resources.

Minister for Resources and Northern Australia Madeleine King will finalize permits for Esso and Beach Energy in the Otway and Sorrell Basins, with any discovered gas to support the domestic east coast market. Exploration permits will also be finalized for Chevron, INPEX, Melbana, and Woodside Energy on Australia’s west coast, supporting energy security in Western Australia.

Further, 10 permits will be finalized for CCS exploration, according to the release.

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