AGL to buy biogas maker Energy360

The Age

28 April 2022

AGL, the largest Australian power and gas company, has struck a deal to buy a biogas producer supplying commercial and industrial customers in its latest move to diversify away from fossil fuels.

The ASX-listed energy giant is set to acquire Energy360, which manufactures and operates bioenergy systems that generate energy from organic waste, subject to ‘‘customary conditions’’ being met. Energy360’s customers include Arnotts Biscuits, building materials maker Boral and waste-management company Cleanaway.

Ahead of the announcement of the deal, expected to be made today, AGL chief customer officer Christine Corbett told The Age and the Herald that biogas would play a prominent role in Australia’s decarbonisation efforts by providing a ‘‘reliable and low-emissions source of energy’’.

‘‘As Australia’s energy transition continues to move at pace, we want to ensure we are offering our customers the most innovative energy solutions so they can lower costs and achieve their sustainability goals,’’ Ms Corbett said.

The move comes as major energy companies across the world are facing a rising tide of pressure from shareholders, governments and their customers to reduce greenhouse gas emissions.

Biogas, which mostly consists of methane, is deemed a renewable energy source because it is produced from organic fuels such as food or agricultural waste. It is chemically identical to the natural gas used in existing gas pipelines for homes and businesses, and is considered an important tool in the fight to reduce emissions in parts of the economy that cannot easily switch to renewable electricity, such as heavy manufacturing.

Environmental advocates say biogas has a valuable role in the fight to arrest global warming but caution it has limits, including the fact there is not enough biomass fuel to generate the amount of biogas required to replace global usage.

‘‘Optimistic scenarios developed by the International Energy Agency show that biogas has the potential to replace just 20 per cent – or one-fifth – of the world’s demand for gas,’’ the Climate Council says. ‘‘While it can play a part in reducing fossil fuel use, getting to net zero nonetheless requires massive reductions in gas
use.’’

Ahead of AGL’s proposed demerger to split off its carbon-intensive coal and gas-fired power stations, which goes to a shareholder vote in June, the company said it intended to house Energy360 within the carbon-neutral AGL Australia entity, which would own AGL’s power, gas and telecommunications retailing divisions and some cleaner energy assets.

‘‘This sustainable energy solution will complement our existing solar and battery products, helping customers on the path to decarbonisation,’’ Corbett said.

Energy360 chief executive Samantha Lamond said it was fitting that AGL, one of Australia’s biggest investors in renewable energy, was making a commitment to invest in ‘‘renewable gas for a zero carbon future’’.

‘‘There are some enormous opportunities for businesses to engage with this proven zero emissions, renewable gas solution, and we are very excited to be partnering with AGL to deliver this technology,’’ she said.