AGL share price lifts amid new power deal with biotech giant

Renewable energy certificates are part of the deal.

| More on:
A group of business executives shake hands in an airport lounge.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The AGL Energy Limited (ASX: AGL) share price is 0.78% higher today at $10.95 amid the company announcing a seven-year power purchase deal with renewable energy benefits.

AGL and ASX 200 biotech CSL Limited (ASX: CSL) have just inked the power purchase agreement (PPA), under which CSL will buy all of the electricity required for its Victorian operations from AGL.

This is expected to amount to about 114 GWh of energy per year.

As part of the deal, CSL will purchase renewable energy certificates from AGL to match 100% of its electricity consumption.

The certificates are initially expected to be generated from the AGL-operated Macarthur Wind Farm in Victoria.

AGL share price higher on news of second high-profile PPA

Last month, AGL did a similar PPA deal over a 15-year period with Microsoft Corp (NASDAQ: MSFT).

AGL says these types of PPA deals reflect how it is "participating in the transition to renewable energy".

Microsoft's renewable energy certificates will come from the Rye Park wind farm project in NSW owned by Tilt Renewables.

AGL and Tilt have their own 15-year deal under which AGL will take 45% of the wind farm's output.

In a statement, AGL explained that each renewable energy certificate represents a quantity of renewable energy generated by an eligible power station under the renewable energy certificate scheme.

AGL chief customer officer, Jo Egan, said:

Renewable-linked PPAs like this one can assist our customers in their energy transition journey while also helping to support the ongoing operation of our renewable energy assets.

Registered owners of renewable energy certificates can on-sell them for additional revenue.

They can also surrender them to the Clean Energy Regulator. They can do this to fulfil their obligations under renewable energy legislation, or to meet their own carbon offset goals.

AGL share price in 2023

The AGL share price has lifted 36% in the year to date.

Motley Fool contributor Bronwyn Allen has positions in CSL. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Microsoft. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

An oil refinery worker stands in front of an oil rig with his arms crossed and a smile on his face as the Woodside share price climbs today
Energy Shares

Own Woodside shares? Here's how much your company paid in Aussie taxes in 2023

Woodside is a significant contributor to Australia’s finances.

Read more »

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant
Energy Shares

Are Santos shares a good investment right now?

With a 3.8% dividend yield, should I buy Santos shares right now?

Read more »

Three girls compete in a race, running fast around an athletic track.
Share Gainers

Here's why ASX uranium shares like Deep Yellow are running hot today

ASX uranium stocks are on fire this Wednesday.

Read more »

Female oil worker in front of a pumpjack.
Energy Shares

Buy this ASX 200 energy stock if you want a big return

Bell Potter sees a lot of value in this energy stock at current levels.

Read more »

A man sitting at a computer is blown away by what he's seeing on the screen, hair and tie whooshing back as he screams argh in panic.
Share Fallers

Why did this ASX All Ords stock just crash 45%?

Investors are sending the ASX All Ords stock tumbling today. But why?

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
Energy Shares

What Bill Gates, ASX uranium shares and the AI revolution have in common

ASX uranium shares could be tapped to make up for banned Russian imports in the US.

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Energy Shares

Here's the earnings forecast out to 2027 for Pilbara Minerals shares

Can this lithium miner charge up its profit over the next few years?

Read more »

A miner stands in front oh an excavator at a mine site

3 reasons ASX uranium stocks can keep charging higher into 2025

I think the recent sell-down in ASX uranium stocks has been overdone. Here’s why.

Read more »