The AGL Energy Ltd (ASX: AGL) share price has had a stellar week, so what is going on?
AGL shares have jumped more than 5% since 21 March. They are currently trading at $7.65, a 0.92% gain so far today.
In comparison, the S&P/ASX 200 Index (ASX: XJO) has climbed 2% over the past week and is up 0.45% at the time of writing.
AGL's share price performance is mirrored by the S&P/ASX 200 Energy Index (ASX: XEJ) which has also leapt 5% since 21 March.
Let's take a look at what has been happening at AGL.
New battery deal
AGL will build a large battery at Broken Hill in New South Wales. The project is worth $41 million and includes a $14.84 million grant from the federal government's Australian Renewable Energy Agency (ARENA).
The battery will include advanced inverter technology to improve system strength in weak parts of the grid.
Fluence and consortium partner Valmec will supply the 50 megawatt (MW), 50 megawatt hour (MWh) battery for the project.
Commenting on the project, AGL chief operating officer Markus Brokhof said:
Broken Hill's unique edge-of-grid environment provides an ideal location for this advanced inverter technology to demonstrate how it can facilitate further penetration of renewable energy generation and add to the stability of the wider electricity network.
As Australia moves forward with its energy transition, we know that firming technologies like batteries play an important role in energy storage and supporting renewable energy supply.
The battery will be located about 6 km northwest of the Broken Hill airport. Construction completion is earmarked for early 2023. The project will provide up to 50 jobs for engineers, tradies, and contractors.
Commenting on the Federal Government grant, Minister for Industry, Energy and Emissions Reduction Angus Taylor said:
This is the 35th ARENA project we've invested in across New South Wales since January 2020. This battery will help stabilise the system, which is particularly important for areas such as Broken Hill that are at the edge of the electricity grid.
In other news, my Foolish colleague Zach recently reported broker sentiment is mixed on the AGL share price. JP Morgan and Credit Suisse rate AGL as a buy, while Barrenjoey Markets has placed a neutral rating on the share. The consensus price target for the share is $8.22.
AGL has also recently announced a plan for 200 EV smart chargers, my Foolish colleague Bernd reported.
Meanwhile, AGL is forging ahead with plans to demerge the company into two separate entities in June this year.
On 30 March, AGL will pay a dividend of 16 cents per share. This is a 60% cut on the previous interim dividend.
AGL share price snapshot
The AGL share price is up almost 25% year to date but has slid 26% lower in the past year.
In the past month, AGL shares are up nearly 2% boosted by their performance over the past week
For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned around 9% in the past year.
AGL has a market capitalisation of roughly $5 billion based on its current share price.
