The AGL Energy Ltd (ASX: AGL) share price is edging into positive territory today. This comes as the Australian energy giant struck a deal with the Fortescue Metals Group Limited (ASX: FMG) subsidiary, Fortescue Future Industries.
At the time of writing, AGL shares are swapping hands for $5.55, up 0.54%.
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What's been announced?
Investors appear pleased about the company's latest prospect, sending the AGL share price into the green.
In its media release, AGL advised of plans to transform its Liddell and Bayswater power stations into a green hydrogen facility.
A signed Memorandum of Understanding (MOU) with Fortescue Future Industries will look at ways to achieve clean energy. This will see a 12-month feasibility study which will map key operational and commercial plans for the project.
AGL wants to power the site with clean energy through grid scale batteries, solar thermal storage, wind and pumped hydro.
The Liddell coal power station is due to close in early 2023, and Bayswater is expected to follow suit in 2025.
Early estimates suggest that the new project could support a hydrogen facility of a gigawatt scale. However, that would be subject to renewable energy costs, firming requirements, electrolyser capital costs, logistics and demand for hydrogen product.
Notably, upon completion, the Hunter Energy Hub will be the first of its kind in Australia.
AGL has embarked on a massive change to become a clean producer of sustainable, secure and affordable electricity.
The company is already commencing construction of a 250MW grid-scale battery at the Torrens Island gas hub in Adelaide. Furthermore, it has also received planning approval for a 200MW, four-hour big battery at the site of Loy Yang power station in Victoria.
AGL CEO and managing director, Graeme Hunt commented:
We have a long history of supporting the development of new technology as early investors in wind and other renewables and we want to do the same in partnerships with Australia's emerging hydrogen industry.
Fortescue is leading the charge on the development of green hydrogen in Australia and abroad, and we are excited to bring our site and expertise in large-scale renewable generation to the fold.
AGL share price recap
Since this time last year, the AGL share price has continued to plummet in value, losing almost 60%. The company's shares moved on a downward trend throughout 2021, reflecting weak investor sentiment.
Based on today's price, AGL presides a market capitalisation of $3.65 billion, with approximately 658.38 million shares outstanding.
