AGL Energy has announced an expansion of its battery storage programme following a sharp decline in earnings and a slump in investor confidence. The company’s stock fell 13 percent after revealing that rising fuel costs and unplanned power station outages had eroded profits.
While AGL remains the country’s biggest greenhouse gas emitter, the company is under pressure to transition its portfolio. According to AGL, battery systems are increasingly essential for balancing supply during disruptions and managing the variability of renewables.
Battery Storage Now Central to Operational Resilience
Faced with volatile coal and gas markets, AGL is shifting focus to flexible energy technologies to buffer against outages and price shocks. The company’s growing fleet of grid-scale batteries is already playing a key role in stabilising its supply network.
According to AGL chief executive Damien Nicks, battery performance has proven effective during recent disruptions at coal plants. “The response of the batteries was fantastic,” he said, describing their speed and flexibility as a critical asset in the company’s evolving energy mix.
AGL currently operates battery facilities at Torrens Island in South Australia and Broken Hill in New South Wales, with another installation due to come online at the site of the decommissioned Liddell coal plant. A fourth project, approved in July, involves an $800 million battery at Tomago in the Hunter region.
Grid-scale batteries offer near-instantaneous response times, making them vital during unexpected generation shortfalls. They also allow excess renewable energy to be stored and redistributed later, reinforcing system reliability.
According to analysts, battery earnings are now expected to provide a financial cushion as fossil fuel supply contracts become more expensive. AGL stated that the revenue generated by these assets would help offset its higher fuel procurement costs over the next three years.
Decarbonisation Targets Reflect Investor Pressure
In recent years, AGL has faced mounting calls from shareholders to accelerate its decarbonisation plans. Climate-focused investors, including Mike Cannon-Brookes, have urged the utility to shift faster from coal to clean energy.
On 13 August, the company outlined updated climate commitments, including a strengthened emissions reduction plan and a new target to cut Scope 3 emissions by 60 percent. These indirect emissions are generated by customers using AGL’s energy products.
AGL has also increased its short-term clean energy targets, aiming to build six gigawatts of new capacity by 2030—half of which will be battery storage. This builds towards its broader plan to install 12 gigawatts of firmed renewables ahead of the planned closure of Loy Yang A, its last coal plant, in 2035.
According to the Australasian Centre for Corporate Responsibility, AGL’s strategy marks progress but must go further. Executive director Brynn O’Brien said the company should “drive forward the build-out of bulk renewable power” to remain competitive in a rapidly changing energy landscape.
