The AGL Energy Limited (ASX: AGL) share price is surging today. The positive price movement comes after the energy supplier announced it was proceeding with plans for increased green energy capacity at one of its plants.
At the time of writing, shares in the company are selling for $10.50 each – up 5.42%. In comparison the S&P/ASX 200 Index (ASX: XJO) is up 0.43%.
Let's take a closer look at what's boosting the AGL share price.
AGL's announcement
Investors are loving the AGL share price today. In a media release, AGL confirmed it had submitted a planning application to the Victorian Government for a 200MW, 4-hour duration battery to be constructed at its Loy Yang Power Station in the La Trobe Valley.
Today's announcement comes just after the company announced a deal to power the Portland aluminium smelter plant.
AGL's chief operating officer, Markus Brokhof, says batteries will be crucial to Australia's energy grid in the near-term.
"This project will play a critical role in transforming the reliability of renewables in Victoria, providing essential firming capacity and storage," Mr Brokhof said.
"The [La Trobe Valley] will continue to play an important role in providing reliable and affordable energy – this project is part of both the AGL and regions' transition and path to a lower emissions future."
In addition to the proposed battery in the La Trobe Valley, AGL is also developing the following:
- A 250MW battery at its Torrens Island power station in South Australia.
- A 150MW battery at its Liddell power station in New South Wales.
- A 50MW battery in Broken Hill, NSW.
Loy Yang's green conversion
AGL's Loy Yang Power Station, like most in the La Trobe Valley, is fuelled by high-emitting brown coal. The energy supplier has promised to transition to "full decarbonisation" of its company by 2050, in line with expectations of a greener Australian economy.
As part of that transition, AGL will close all of its coal-burning plants. AGL, in conjunction with state and federal governments, is looking at ways of converting old coal facilities to zero-emission sources of power.
At Loy Yang, for example, AGL will be converting the plant to hydrogen-based. The plans for the 250MW battery are a part of these plans.
AGL and its partners will convert brown coal from the site into hydrogen.
AGL share price snapshot
Over the last 12 months, the AGL share price has fallen by 32.04%. It is one of a few ASX shares to still be struggling from the effects of the coronavirus pandemic. In fact, the current AGL share price is down 13.36% just from the beginning of this year.
At its current valuation, AGL has a market capitalisation of around $6.2 billion.
