AGL Expands Renewables Portfolio with $250m Acquisition of Firm Power and Terrain Solar

AGL Energy (ASX: AGL) is to spend $250 million to acquire energy company, battery energy storage system (BESS) developer and solar project developer Terrain Solar, and its 8.1-gigawatt portfolio of renewable energy projects.

The plans include 27 projects including 6.1 GW of grid-scale BESS projects, 1.8 GW of solar projects and 250 megawatts of onshore wind assets across Australia.

The transaction will be funded from cash resources from AGL and is expected to close this year.

Passage is a priority

AGL Managing Director Damien Nicks said the acquisition demonstrates the company’s commitment to capitalising on market conditions and prioritising energy transformation projects that deliver the best long-term value.

“We believe this high-quality development schedule represents a strong opportunity for AGL and focuses on strengthening the potential of alternative renewable energy sources as baseload heat generation exits the domestic electricity market,” he said.

Results announced

The acquisition comes after AGL delivered strong full-year results, including net profit for the 12 months to June of $711 million and underlying EBITDA of $2.2 billion.

Underlying net profit after tax totalled US$812 million and the group generated US$1.85 billion of net cash from operating activities, an increase of US$947 million year-on-year, driven by higher underlying EBITDA and lower working capital outflows.

Financial results were driven by increased fleet availability and portfolio flexibility, including a solid contribution to earnings from the 250MW battery at Adelaide’s Torrens Island facility in the first nine months of operations.

AGL also saw greater stability in market conditions during the year, with the impact of higher wholesale electricity prices from previous periods reflected in pricing performance, trading and contract positions.

“Operational Excellence”

Mr Nicks said AGL had achieved a year of excellent operational performance.

“We continue to see growth as we help our residential and commercial customers electrify and decarbonize (and) continue to support our customers through ongoing cost of living pressures.”

He added that AGL customers had received a significant amount of government support during the year, and that the amount was expected to exceed $1 billion by the end of 2025.

Chairman’s Retirement

AGL also announced the retirement of Patricia McKenzie, Chair of its Board, after seven years on the Board.

Ms McKenzie will step down in February 2025 and will be succeeded by Miles George.

Mr. George has over 30 years of experience in the energy and infrastructure sectors, with a particular focus on the development, investment and financing of renewable energy industries globally.