AGL saw the pain of higher prices coming, and last year rolled out a $70 million package to help vulnerable customers. It has spent about half of that on hardship cases as its net bad debt ballooned over the half year to $59 million.

AGL’s chief financial officer Gary Brown said wholesale electricity prices are softening, although they are still above levels seen in early 2022. The retailer’s outlook backs up the view of the Australian Energy Regulator which said last month it is cautiously optimistic electricity prices may ease by the middle of this year, bringing some relief to struggling households.

But Brown said it was too early to say if lower prices will stick. “With a few weeks of summer remaining and another five months left in financial year 2024, it is too early to comment on the pricing outlook for financial year 2025,” he said.

Crucially, AGL’s investments in upgrading coal-fired power stations at Bayswater in NSW and Loy Yang B in Victoria to make electricity generation more flexible is paying off. Bayswater can reduce capacity by 70 per cent and Loy Yang by 45 per cent during days when the sun makes renewable energy abundant, saving AGL money from lower coal and operating costs.

The company said it has almost doubled its renewables development pipeline to 5.8 gigawatts since 2022, enough to power 5 million homes. It now has 800 megawatts of grid-scale batteries in operation or under construction and recently signed long-term renewable energy contracts with Microsoft, CSL and NBN Co.

The generator’s newly commissioned $189 million Torrens battery in South Australia generated earnings of $7 million in the first three months of its life, at the upper end of its expected return.

Nicks said the transition of Australia’s electricity grid to renewables won’t be smooth. AGL will periodically review market dynamics, customer demand and development options as it tries to accelerate its decarbonisation and transition its portfolio. “It will be bumpy along the way,” he said.

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