AGL Energy Limited · ASX:AGL
AGL Energy — UBS Energy & Utilities Conference 2007
19 slides from AGL Energy's conference presentation, July 2007
Slide 1: Positioned for growth in a low carbon environment
agl energy positioned for growth in a low carbon environment paul anthony, managing director & ceo ubs energy & utilities conference july 2007
Slide 2: Disclaimer
disclaimer the information in this presentation: + is not an offer or recommendation to purchase or subscribe for securities in agl energy limited or to retain any securities currently held + does not take into account the potential and current individual investment objectives or the financial situa
Slide 3: Growing from a position of strength
agl energy growing from a position of strength ® Australia’s largest retailer of gas & electricity; —-~4,1m customer accounts across NSW, Victoria, South Australia, Queensland & Western Australia (includes 100% of JV’s) — ~1.3m dual-fuel customer accounts — Leading private owner of renewable assets
Slide 4: The integrated strategy
the integrated strategy the ‘four corners—big goal’ approach electricity electricity upstream supply _Anfluencing regulatory & industry outcomes,” “Giig, Gownstream — 5) es supply —_ Cust | aces gas gas vth platform & skills to succeed across gas & electricity energy chains % driving consolidation i
Slide 5: The integrated strategy: months of deploying the 'four corners' approach
the integrated strategy 12 months of deploying the ‘four corners’ approach ~Southern Hydro (645MW) upstream supply downstream retail electricity electricity ~ acquired ~600,000 customers via AlintaAGL Western Australia JV - acquired ~500,000 retail customers in QLD ~Bogong (Hydro 140MW) ~Hallet (Win
Slide 6: Emissions trading
emissions trading ag! positioned to benefit in low. carbon environment * two proposals for an emissions trading scheme currently being considered by government — Commonwealth Emissions Trading Task Group — States’ National Emissions Trading Task Force (NETTS) * both propose a ‘cap & trade’ scheme *
Slide 7: Emissions trading: positioning AGL to benefit from carbon abatement
emissions trading positioning ag! to benefit from carbon abatement * Integrators (generation & retail) need to AGL Current Generation manage carbon impost by purchase of Portfolio permits or build physical hedge (own Renewable Gas - Peaking renewable generation) (Hydro, Wind! Intermediate, & Biornas
Slide 8: Emissions trading: positioning AGL to benefit from carbon abatement
| emissions trading positioning agl to benefit from carbon abatement * AGL as an integrated retailer with growing renewable assets benefits Emissions Trading from lower production costs than Indicative AGL Revenue Impacts - 2010 carbon weighted pool price and mitigates the cost of purchasing permits
Slide 9: Building carbon effective generation
building carbon effective generation a leading renewable position Current generation) ~ Wi BB Potential cen. A ’ Equity generation including off-take agreements and plant under construction 2 Generation including off-take agreements, plant under construction, 100% of JV’s & development projects
Slide 10: Wholesale price volatility: an energy constrained market
wholesale price volatility an energy constrained market NEM driven predominantly by.energy constraints past 12 weeks ® Pre drought. characterised by (seasonal) capacity constraints — market separation & pricing events % Recently (early Apr to early Jun) characterised by high average prices & low vol
Slide 11: Wholesale price volatility: an energy & capacity constrained market
wholesale price volatility an energy & capacity constrained market NEM showing signs of both energy. & capacity constraints past fortnight NEM inter- regional price separation examples [oe Markee Jone. oe * market separation now occurring Sana: — price volatility between NEM states — capacity constr
Slide 12: Delivering the natural hedge
delivering the natural hedge agl’s ability to cover basis risk » Physical / owned intermediate & peak generation cover extreme price risk periods — ~30% of AGL load occurs peak pricing periods & represents ~40% of COGS * Equity.investment in Loy Yang A provides natural financial hedge for base load
Slide 13: AGL's prudent hedging policy
agl’s prudent hedging policy risk mitigation & profit maximisation ® purchase of TIPS adds !80% energy increase & 63% capacity increase to portfolio * reduces exposure to extreme price events & reduces need to purchase expensive derivative products * wholesale energy economic (profit at risk) risk l
Slide 14: In summary
» “on track to deliver scheme booklet FYO7 net profit of ~$321 million —_ in summary clearly defined, ‘four corners’ integrated strategy driving consolidation in a fragmented market to deliver first mover advantage, win “end-game” identified, ‘locked in’ growth opportunities supporting the ‘four cor
Slide 15: Appendices
appendices 14
Slide 16: Growth projects - status
growth projects - status suite of renewable & clean burn gas generation Ahead of schedule & on budget, due for completion 1HOB ao 140MW Bogong hydro: Ahead of schedule & on budget, due for completion 2H09 oe ee tee gas. Option over se rece ree Generation Be OSES See ; : 70-1 oomw. Mica Creek - _AGL/
Slide 17: Building the natural hedge
building the natural hedge upstream generation 100% of torrens island power station (tips) * acquiring 1,280MW TIPS (Sth Australia) gas fired peaking & intermediate power station for $417m — transaction close date 2 July 07 * delivers immediate natural hedge between upstream generation and downstrea
Slide 18: TIPS: energy & capacity benefits
tips energy & capacity benefits % Delivers ~180% ‘) increase in energy and ~63% increase in capacity to the AGL generation portfolio Post TIPS P ~4,300 GWhr Post Hailett & Bogong ~4,800 GWhr @ Torrens Island O Somerton GB AGL Hydro (Vic), Dartmouth / Eildon etc B AGL Hydro (NSW) Various 1. ~160% net
Slide 19: TIPS: transaction economics
tips transaction economics disciplined, creative transactions deliver value accretion ORG Darling Downs Specific Capacity Value (SkV 18