AGL Energy Limited provided an overview of its renewable energy strategy and growth opportunities. Key points included: 1) Domestic renewable energy policies are driving substantial investment in wind and other renewable technologies over the next decade, requiring up to $30 billion in investment. 2) AGL has a large renewable energy project pipeline that positions it well to capitalize on this growth, including wind farms with over 1,000MW of capacity. 3) AGL's balance sheet capacity has increased by $360 million due to a revised treatment of wind farm power purchase agreements by ratings agency S&P, providing funding for future projects.

1. AGL E
Energy Limited
Li it d
Renewable energy:
Policies set for growth
Michael Fraser, Managing Director and CEO
Mi h l F M i Di t d
Macquarie Conference - Sydney
5 May 2010
AGL External

2. 2
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 situation of investors.
› W prepared with d
Was d ith due care and attention and is current at the
d tt ti di t t th
date of the presentation.
› Actual results may materially vary from any forecasts (where
applicable) i thi presentation.
li bl ) in this t ti
› Before making or varying any investment in securities in AGL
Energy Limited, all investors should consider the appropriateness
of that investment in light of their indi id al investment objecti es
in estment thei individual in estment objectives
and financial situation and should seek their own independent
professional advice.
Macquarie Conference - Sydney
5 May 2010
AGL External

3. 3
Agenda
g
› S&P revised treatment
› Drivers of renewable energy globally
› Domestic policy settings
› AGL’s Wind strategy
› Upstream Gas – Creating value
› NSW Electricity Privatisation
› Summary
Macquarie Conference - Sydney
5 May 2010
AGL External

4. 4
S& e ses t eat e t o
S&P revises treatment of wind farm PPAs1
d a s
Significant enhancement in capital efficiency.
› S&P spent considerable time understanding risks associated with PPAs
› 50% reduction in the notional capital to be applied to PPAs
p pp
› AGL’s balance sheet capacity immediately improved by ~$360 million
› Maintaining BBB rating is important for business purposes
› Increases capacity to around $900 million
› Improved capital efficiency substantially enhances AGL’s ability to fund
future growth
1. Power Purchase Agreements
Macquarie Conference - Sydney
5 May 2010
AGL External

5. 5
Debt Capacity
ebt Capac ty
AGL has significant headroom to fund organic growth.
LEGEND
S&P 100%Weight
S&P 50% Adjust.
Closing FY10 Debt
Operating cash flow
after dividends
$ million
Capex
Headroom
Macquarie Conference - Sydney
5 May 2010
AGL External

6. 6
Renewables: A global growth story
e e ab es g oba g o t sto y
Majority of newly installed capacity globally was renewable.
$US b 2008
bn Source: N
S New Energy Finance ( 2009)
E Fi
52
110
Wind
Wi d
88
Other Renewable
Fossil Fuel Generation
Macquarie Conference - Sydney
5 May 2010
AGL External

7. 7
Renewables: A global growth story
Wind and Hydro the primary renewable energy sources.
Source: International Energy Agency (2009)
Macquarie Conference - Sydney
5 May 2010
AGL External

8. 8
Technology cost curve
Wind currently has a substantial cost advantage.
350
» Source: ACIL Tasman AGL Roam, MMA
Tasman, AGL, Roam
300
250
/MWh)
200
LRMC ($/
150
100
50
0
Brown Coal Black Coal CCGT OCGT Wind Solar PV Wave Solar thermal
Macquarie Conference - Sydney
5 May 2010
AGL External

9. 9
REC prices reflect policy uncertainty
Penalty raised to reflect rising cost of renewable projects.
$/REC
$100
$90
$80
$70
Expanded MRET announced SHW & PV increases REC Bank
$60
$50
$40
$30
$20
Drought impacting Hydros LRET reform announced
$10
$0
Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09
Macquarie Conference - Sydney
5 May 2010
AGL External

10. 10
Impact of Renewable Policy Setting
Fundamental changes required to generation mix.
New Build Generation Mix
Years of Forecast - 2010 to 2020
Coal Plant CCGT Base Plant OCGT Peak Plant Renewable Plant
20000
18000
Capaci required (MW)
16000
14000 Renewables dominate
9,500MW
9 500MW
12000
1,200MW
10000
ity
8000 4,500MW
Delay to CPRS reduces
6000 5,500MW the demand for CCGT as
coal-fired generation
4000 remains in service
5,500MW
2000 2,800MW
2 800MW
0
Original 2006 forecast Current 2010 forecast
(ETS, 2% MRET) (ETS, 20% Expanded RET)
Source: AGL Greenhouse modeling
Macquarie Conference - Sydney
5 May 2010
AGL External

11. 11
Renewable Energy Certificate (REC) obligations
e e ab e e gy Ce t cate ( C) ob gat o s
Regulatory framework necessary to facilitate investment.
› Macarthur (365MW)
conditional commitment
› Federal legislation requires
AGL to surrender
approximately 9 million
RECs per annum by 2020
› Strong pipeline of
development opportunities
› Proven capability in site
selection, project
development and
performance
1. Excludes long-term supply agreements and Voluntary REC demands.
Macquarie Conference - Sydney
5 May 2010
AGL External

12. 12
Australia has a world class wind resource
ust a a as o d c ass d esou ce
Average wind speeds (metres per second)
› Wind resource is best in
d b
Tasmania and areas in
Western Australia, South
Australia and Victoria
› NSW, Queensland and
the Northern Territory
have limited large scale
wind potential
› The best wind sites have
already been taken
>8
6-8
4-6
<4
Source: CSIRO
Macquarie Conference - Sydney
5 May 2010
AGL External

13. 13
Wind farms: Success factors
d a s acto s
A number of critical issues can mean success or failure of a wind
farm development:
› Wind resource
› Land access (support by landowners)
( pp y )
› Capital cost
› Connection access: (cost, loss factor, grid capacity)
( , ,g p y)
› Wind farm scale (to absorb certain fixed cost)
› O&M costs (typically only around 2% of capital cost per year)
Macquarie Conference - Sydney
5 May 2010
AGL External

14. 14
Wind farms: Cost profile
d a s p o e
Significant local content built into cost structure.
Total Capital Cost EPC Cost
2% 2% 2%
% % %
2%
4% 6%
10%
12%
90%
55%
15%
Pre Development Wind Turbine Generator
EPC Cost Electrical (inc Switchyard)
Balance of Plant Transport
p
Project Management Tower
Civil
Contingency
Engineering
Macquarie Conference - Sydney
5 May 2010
AGL External

15. 15
Wind resource drives turbine selection
d esou ce d es tu b e se ect o
Location of Hallett 1 turbines & wind speeds
› Wind speed generally increases with
height
› Wake effects reduce yield and drives
turbine spacing
› Hallett Wind Farm stages 1, 2 and 4
are classic wind farm sites with
prevailing winds perpendicular to
ridge
Wind Rose for Hallett 1
N
Macquarie Conference - Sydney
5 May 2010
AGL External

16. 16
Wind project diversity improves reliability
d p oject d e s ty p o es e ab ty
Geographical diversity enhances the level of ’firm’ generation.
Wattle Point Hallett 1 Pool Pric e
100 $10,000
90
$/MWh)
80
MW)
$1,000
70
Wind generation (M
Regional pool price ($
60
50 $100
40
g
l
30
$10
20
10
0 $1
Sun 06 Mon 07 Tue 08 Wed 09 Thu 10 Fri 11
Half hour time increments (6-12 April 2008)
Macquarie Conference - Sydney
5 May 2010
AGL External

17. 17
AGL p ojects de e g high capacity factors
G projects delivering g capac ty acto s
Operational performance exceeds investment assumptions.
1
Macquarie Conference - Sydney
5 May 2010
AGL External

18. 18
St o g g o t p pe e
Strong growth pipeline
Provides strategic depth and optionality.
Project Nominal Capacity (MW) Location Type Project Status Definition
Bogong 140 Victorian Alps Hydro Commissioned Completed
McKay Creek Up Rate 10 Victorian Alps Hydro Commissioned Completed
Hallett 2 71 SA - Hallett Wind Commissioned Completed
Hallett
H ll tt 4 132 SA - H ll tt
Hallett Wind
Wi d Under C
U d Construction
t ti Committed
C itt d
NERATION
Werribee Expansion 2 VIC - Werribee Biogas Under Construction Committed
Oaklands Hill 67 VIC - West Wind Under Construction Committed
Hallett 5 52 SA – Hallett Wind Under Construction Committed
WABLE GEN
In Development, JV with Conditional
Macarthur 365 VIC - West Wind
Meridian Commitment
Barn Hill 130 SA - Redhill Wind DA Approved Probable
Hallett 3 80 SA - Hallett Wind In Development Possible
RENEW
Crows Nest 150 QLD - Toowoomba Wind Permitted Possible
Landowner Agreements in
Ben Lomond 150 NSW - Armidale Wind Possible
Place
Landowner Agreements in
g
Coopers Gap 300 QLD - Kingaroy Wind Possible
Place
Other 3 Projects totalling up to 600 Various Various Under Review Possible
Macquarie Conference - Sydney
5 May 2010
AGL External

19. 19
Upst ea
Upstream Gas – Positioning For Growth
os t o g o G o t
Exploration program slowed in line with current gas market
conditions.
› Targeting 2,000PJ of certified 2P reserves
2 000PJ
› 2P reserves entitlement up 18% (201PJ); 3P reserves entitlement up 36% (839PJ)
› Camden reflects production depletion only; reserves certification at Camden and
Gloucester is planned for the end of financial y
p year
AGL share of CSG reserves As at 31 Dec 09 As at 30 Jun 09 Change
PJ 2P 3P 2P 3P 2P 3P
Moranbah (50%) 506 1,027 497 1,079 2% -5%
Gloucester (100%) 423 630 423 630 - -
Camden (100%) 126 170 129 173 -2% -2%
Spring Gully (various, small) 7 9 7 9 - -
Sub-Total 1,062 1,836 1,056 1,891 1% -3%
ATP 364P back-in rights (50%)* 246 1,307 51 413 382% 216%
Total 1,308 3,143 1,107 2,304 18% 36%
* Under a 50-year project agreement that commenced in 2000, AGL has no effective exploration rights (or ongoing cost obligations) within exploration
tenement ATP 364P as these were assigned to Arrow Energy Limited. However, AGL is entitled to participate up to a 50% interest in any commercial
development by contributing its share of past costs. Past costs are anticipated to be less than $0.05/GJ.
Macquarie Conference - Sydney
5 May 2010
AGL External

20. 20
NSW electricity privatisation
S e ect c ty p at sat o
Disciplined bidding approach if process proceeds.
› NSW Government still working toward opening data rooms
mid-year
› AGL previously stated will look at all assets
› Opportunity to scale up
› Only bid for assets if accretive to EPS
› Maintain BBB credit rating
› Any capital raising to favour existing shareholders
Macquarie Conference - Sydney
5 May 2010
AGL External

21. 21
Su
Summary
a y
› Significant progress with renewable policies
» Legislation scheduled for May/June 2010
g y/
» Requires up to $30 billion of investment
› Delay to CPRS will impact future generation mix
› AGL’s renewable portfolio strategically well-positioned
» First-mover advantage with large portfolio of sites
› Capacity to leverage balance sheet
» S&P revision frees additional capacity
Macquarie Conference - Sydney
5 May 2010
AGL External

22. 22
Further Information / Contacts
u t e o at o Co tacts
A range of information on AGL Energy Limited including ASX & Media Releases, Presentations,
Financial Results, Annual Reports and Sustainability Reports is available from our website:
www.agl.com.au
Alternatively, contact:
INSTITUTIONAL INVESTORS
S U O S O S
& ANALYSTS RETAIL INVESTORS & MEDIA
John Hobson Nathan Vass
Head of Investor Relations Investor Relations & Media
AGL Energy Limited AGL Energy Limited
phone: +61 2 9921 2789 phone: +61 2 9921 2264
Mobile: +61 (0) 488 002 460 mobile: +61 (0) 405 040 133
e-mail: john.hobson@agl.com.au e-mail: nvass@agl.com.au
Macquarie Conference - Sydney
5 May 2010
AGL External