AGL Future Forests Program. Annual Report FY17

Transcription

1 AGL Future Forests Program Annual Report FY17

2 AGL Energy Limited ABN: Level 24, 200 George St Sydney NSW 2000 Locked Bag 1837 St Leonards NSW 2065 t: f: agl.com.au Table of Contents Document revision history...2 Foreword...3 Background...3 The AGL Future Forests Carbon Offset Program...3 The technical stuff...3 Revenue Neutrality...5 FY17 AGL Annual Offset Surrender Information...6 FY17 AGL Annual Offsets Acquittal Summary...7 FY17 Revenue Neutrality Summary...8 Independent Audit...8 Further Information...8 AGL Future Forests Annual Report FY17 v1.0 1

3 Document revision history Date Version Author Comment 12/09/ Mark Ferris Draft 12/12/ Mark Ferris Final AGL Future Forests Annual Report FY17 v1.0 2

4 Foreword At AGL, we re helping to shape a sustainable energy future for Australia, by committing to move towards a carbon-constrained future and becoming a more customer-centric business. We take our commitment to a transition to a carbon constrained future seriously. We understand that as the largest emitter of scope 1 greenhouse gas emissions in Australia we are in a unique position to drive innovation within both the electricity generation and retail markets, to reduce greenhouse gas emissions while providing secure and affordable energy for Australian households and businesses. Our approach and commitments to date have been publicised in our 2015 Greenhouse Gas Policy, our 2016 Carbon Constrained Future Report, and are published annually in our Sustainability Report. We understand that many of our customers would also like to do their part to contribute to this transition towards a lower carbon future. That s why we are proud to have introduced the Future Forests program on 1 July At AGL, sustainable thinking is one of our core values so we are proud to offer this innovative product to our customers. Theodore Comino Manager, Greenhouse and Sustainability Background The AGL Future Forests Carbon Offset Program The AGL Future Forests carbon offset program was developed to provide AGL residential customers with an opportunity to offset (counteract) greenhouse gas emissions created as a result of electricity usage in their home through diverse native Australian forestry for a set fee of $1 per week. The technical stuff The program is designed and benchmarked against design elements outlined in the: 1. National GreenPower Program Rules (Version 10 January 2016) &; 2. The National Carbon Offsets Standard (NCOS) Carbon Neutral Program Guidelines V 4.0 In addition, AGL minimum standards relating to carbon offsetting (particularly offset purchasing) have been developed with reference to guidance and the Code of Best Practice provided by the International Carbon Reduction and Offset Alliance (ICROA). AGL electricity customers wishing to join the program can do so by calling AGL at any time, or by visiting Conversely, customers wishing to no longer continue on the program can cancel at any time with no penalty. How does the program work? AGL Future Forests Annual Report FY17 v1.0 3

5 When customers join the Future Forests Program, AGL tracks their electricity usage over the period that they are on the program. Upon the conclusion of the relevant fiscal year (July 1 st thru to June 30 th ), AGL completes a calculation to determine the volume of carbon emissions associated with each customer s household electricity usage. This informs how many corresponding carbon credits will need to be purchased and retired to offset each customer s carbon emissions from their consumption of electricity purchased from AGL. What type of credits has AGL Future Forests purchased for FY17? For the fiscal year 2017 period (July 1 st 2016 thru to June 30 th 2017), the entire volume of carbon credits utilised to meet the demand of the AGL Future Forests Program customer s electricity emissions are Australian forestry credits from the Gold Standard (GS) VER (Voluntary Emissions Reduction) offset standard. Further details related to the purchase of these credits will be provided later in this report. A full explanation detailing AGL standards relating to sourcing these credits can be found in the AGL Future Forests Voluntary Compliance Method (August 2016) document which is available from AGL upon request. How has AGL completed the carbon emissions calculation for FY17? In determining AGL s Annual Offset Surrender Total (AOST), AGL has utilised a 3-step process as follows: Step 1: AGL has collated the following relevant Future Forests customer data utilising its internal billing system SAP : - Customer type (residential); - Customer volume (customer accounts); - Customer churn (customer cancellations); - Customer location (state / territory); - Customer consumption kwh (kilowatt hours). Step 2: Utilising this data, AGL has converted the corresponding customer s electricity consumption to a greenhouse gas (GHG) emission figure utilising the most recent (2017) state based Australian Government National Greenhouse Accounts Factors for consumption of purchased electricity from the grid ( as per the following table: State or Territory Emission factor kg CO 2-e/kWh New South Wales 0.83 Victoria 1.08 Queensland 0.79 South Australia 0.49 AGL Future Forests Annual Report FY17 v1.0 4

6 Source: Table 5: National Greenhouse Accounts Factors July 2017, Department of the Environment and Energy 1. Step 3: AGL has conducted the following equation for each state jurisdiction in which we have electricity customers to calculate the total AOST for the FY17 surrender period: Jurisdictional AOST (tco2-e) = Jurisdictional Total (kwh) x Jurisdictional Emissions Factor (kg CO 2- e/kwh) / The combined total of each Jurisdictional AOST has then determined the AGL Total AOST for FY17. AGL FY17 AOST = Sum of each Jurisdictional AOST FY17. Revenue Neutrality The AGL Future Forests Program is intended to be revenue neutral in its design. Specifically, AGL has committed to ensuring that: - Any operational costs associated with running this program will be absorbed/paid for by AGL; - In the event an excess of funds exists following the purchase of required offsets according to documented methodologies, remaining funds will be utilised to purchase and retire additional offset units; - In the event a shortfall of funds exists following the purchase of required offsets according to documented methodologies, the shortfall will be met from AGL operating expenses with no additional cost to consumers. This reconciliation and application of excess funds (or shortfall) occurs on an annual basis at the completion of the relevant financial year. 1 AGL Future Forests Annual Report FY17 v1.0 5

7 FY17 AGL Annual Offset Surrender Information The following represents the FY17 AGL Annual Offset Surrender Total related to the AGL Future Forests carbon offset program (data is current as at 15/09/2017): 1. Aggregated residential customer numbers, inclusive of customer churn: State Customers New South Wales 2,447 Queensland 1,016 South Australia 603 Victoria 1,897 Total 5, Total product-relevant Australian electricity consumption in megawatt hours (MWh), and electricity consumption (MWh) by state/territory: State MWh New South Wales 3,912.4 Queensland 1,559.7 South Australia 1,009.8 Victoria 2,882.9 Total 9, Total product-relevant Australian emissions (tco 2-e), and emission total (tco 2-e) disaggregated by state / territory & AOST for the FY17 Settlement Period: State tco 2-e New South Wales 3,247.3 Queensland 1,232.1 South Australia Victoria 3,113.6 Total 8,087.8 AGL Future Forests Annual Report FY17 v1.0 6

8 4. Any assumptions / estimations applied that may have a material impact on AOST calculations, and reasons for application of assumptions / estimations: Due to the absence of actual usage details in states where digital meters are not yet prevalent, some usage details may be based on estimated meter readings. These usage details will be reconciled in the next reporting period to ensure the correct volume of credits have been purchased and retired to reflect actual customer usage. At time of report completion, we were unable to obtain precise details relating to the carbon credit volume required to offset customers on our Electric Vehicle Plan, which is offset via the Future Forests Program. Once these details are made available, we will process the carbon credit retirement immediately and will provide details relating to that volume in our next reporting period for the Future Forests Program. FY17 AGL Annual Offsets Acquittal Summary 1) Offset project name(s) & description: Australian Yarra Yarra Biodiversity Corridor Project. This project involves tree planting in Western Australia s Wheatbelt region and Yarra Yarra Biodiversity Corridor. The project is located 400km north of Perth, where 90% of land has been clearer for agriculture are the two target areas for planting the Future Forests trees. Both areas are globally recognised as biodiversity hotspots (as defined by leading scientists and conservation groups, including Conservation International and WWF) with the opportunity to create habitat for a wide range of flora and fauna species. 2) Certification standard(s): Gold Standard LUF 3) Project serial number(s): ) Verification status of purchased offsets: Verified Emission Reduction Units (VERs) 5) Offset purchase volume: 8,180 6) Offset surrender receipt details from market registry: Quantity of credits Type of credits Date of retirement Serial Number Details 2439 VER 3-Oct-17 GS1-1-AU-GS to VER 3-Oct-17 GS1-1-AU-GS to VER 3-Oct-17 GS1-1-AU-GS to VER 3-Oct-17 GS1-1-AU-GS to VER 3-Oct-17 GS1-1-AU-GS to AGL Future Forests Annual Report FY17 v1.0 7

9 7) Any shortfall or conversely surplus carry-over offsetting against the calculated AOST: There were an additional 100 verified credits surrendered for the FY17 period that were surplus to the calculated AOST for this period. This surplus will carry over to the FY18 settlement period. FY17 Revenue Neutrality Summary In accordance with the AGL Future Forests policy, we have calculated the cost of purchasing the necessary Gold Standard credits per our commercial arrangement with our supplier/s. We have subsequently compared this cost with the funds received from our loyal Future Forest customers. It was established the cost of required carbon offset certificates was in excess of funds received, as such AGL has provided the necessary shortfall in accordance with the policy. Independent Audit The FY17 AGL Future Forests Annual Report has been independently audited by Greg Loftus of Clear Environment Pty Limited to a reasonable assurance level under accounting standard ASAE 3000 Assurance Engagement Other than Audits or Review of Historical Information. Further Information For further details relating to this report & the AGL Future Forests Program, please visit or contact AGL at corporate@agl.com.au Melissa Reynolds Chief Customer Officer AGL Energy Ltd. AGL Future Forests Annual Report FY17 v1.0 8