AGL Energy Limited (AGL) Earnings Call Transcript & Summary

Hello, everyone. This is James Hall speaking, General Manager of Corporate Finance at AGL. Thanks for listening to this presentation on AGL's approach to reporting under the Task Force on Climate-related Financial Disclosure, or TCFD framework. We have had a great deal of interest in this process from stakeholders of many different kinds and we're very grateful for the input we've received. Our objective today is to explain the scenario modeling we've undertaken for the 2020 report. This follows the commitments we made last year to extend the time frame of the report, which we've done to 2050 and to extend the analysis to include a scenario in with temperature rises were limited to 1.5 degrees above preindustrial levels. I do want to note that the modeling was undertaken prior to the COVID-19 lockdown, but given the long-term nature of the model, we don't believe the impact we've seen on energy prices and economic activity would make a material difference to the outcomes. We've modeled 4 scenarios in all. And in this presentation, I'm going to provide a preliminary view of the outcomes, including the emissions pathways and some of the opportunities that would arise in each case. We want to answer as many questions as we can. And we're also looking for feedback ahead of publication of the final report in August. We see our TCFD reporting as a journey, and we're already thinking about how we can improve and iterate the approach next year. So let's get going. AGL considers reporting against the TCFD framework, an essential tool to assist in managing climate risk within the business. It provides a framework to assess how our strategy considers and can remain flexible under various decarbonization scenarios. We're then able to use this scenario modeling to assist our portfolio planning, enterprise risk management and capital allocation processes. As Australia is the largest electricity generator and carbon emitter, we, of course, have a large part to play in the responsible transition to a low-carbon economy. AGL accepts the science as outlined by the intergovernmental panel on climate change and remains committed to the objectives of the Paris Agreement. Our Greenhouse Gas Policy published in 2015 committed AGL not to extend the life of its coal-fired power stations beyond their current technical lives and not to invest in new coal power. Since 2016, we've included climate risk and strategy disclosures in our annual reporting, and we subsequently delivered year-on-year improvements in the depth and level of integration of these disclosures with our traditional financial reporting. Before I talk more about the detail of this year's work, I want to highlight some of the key findings. Under all scenarios, our modeling shows significant decarbonization of the Australian electricity sector by 2050, as you'd expect. Under all scenarios, AGL in effect achieved net 0 emissions by 2050 with more than 20% emissions reductions within 5 years due to the closure of the Liddell Power Station. Under all scenarios, there is significant opportunity for AGL and others to invest in renewable generation in grid scale storage, orchestration and behind-the-meter technologies. AGL's strategy will continue to remain flexible to respond to the transition as customer needs, community expectations and technology develop and as government and regulatory policy evolves. Irrespective of how the future unfolds, we are resilient and well positioned to capitalize on the opportunities created by the market transition. Let me briefly touch on the TCFD framework itself and how its 4 key tenants apply at AGL. First is governance. For a business like ours, climate and the energy transition more broadly are so integral that it is a constant and key issue for the Board at all times. Second is risk management. Our approach follows our enterprise risk management framework, overseen formally by the Audit and Risk Management Committee. Our TCFD approach at present primarily focuses on the strategic risk to AGL of the energy transition as opposed to the specific physical risks that may arise as a result of climate change. We anticipate physical risk will be a larger component of future reports. Third is strategy. We have 3 strategic priorities: growth, transformation and social license. And the energy transition is a major consideration in the delivery of all three. The TCFD report will assess how our strategy is likely to be impacted in each of the 4 scenarios. Fourth is metrics and targets. AGL continues to disclose its greenhouse gas emissions, including scope 1, 2 and 3 emissions, consistent with the requirements of the National Greenhouse and Energy Reporting scheme, NGER, as well as participating in more than a dozen well-recognized voluntary surveys. In terms of targets, we've committed to a broad range of actions that will reduce emissions including: providing the market with safe, reliable, affordable and sustainable energy options; not building financing or acquiring new conventional coal-fired power stations or extending the life of existing coal-fired generation; improving the greenhouse gas efficiency of our operations and continuing to invest in new renewable and near-zero ;emission technologies; making available innovative and cost-effective solutions for our customers, such as distributed renewable generation, battery storage and demand management solutions; incorporating a forecast of future carbon pricing into all generation capital expenditure decisions; and continuing to be on being advocate for effective long-term government policy to reduce Australia's emissions in a manner that is consistent with the long-term interest of consumers and of investors. Of course, AGL operates in a highly regulated environment. Our portfolio is an integral part of the reliability and efficient functioning of the Australian energy market. It's not practical for us to adopt unilateral positions that are inconsistent with broader market settings. Let's now look into some detail at how we formulated the 4 scenarios we've used this year. We developed the scenarios "top down" to enable consistency across them and to enable comparison with international and national models. On the slide, you can see a summary of how the approach taken meets the 5 TCFD principles of plausible, distinctive, consistent, relevant and challenging. We engaged external advisers, Aurora Energy Research and KPMG, to assist. We used the IPCC's Representative Concentration Pathways and Shared Socioeconomic Pathways, the RCPs and the SSPs, then translated these into Australian scenarios and carbon budgets. To do this, we utilized our AEMO and Aurora input assumptions as well as other Australian research sources. These input assumptions then informed our electricity sector market models. Using third-party consultants has helped deliver robust referable and repeatable scenarios. All of those assumptions and interactions led to the 4 scenarios you can see here being modeled out to 2050. Scenario A, national targets, is one bookend of the analysis. It assumes the status quo. We modeled current industry commitments and assumed policy settings are maintained over the medium to long-term without material change. As such, it's the only one of the 4 scenarios modeled "bottom up" based on certain settings rather than "top down" to achieve a notional temperature limit. Scenario B, response 2020, models policy and technology, which allows for a steady market-led decarbonization. Scenario C, response 2030, model delayed action prior to stronger policy intervention for rapid decarbonization from 2030 to achieve a similar outcome to Scenario B. Our other bookend is Scenario D, a 1.5 degree limit. It models a coordinated and immediate decarbonization approach with combined government intervention, policy and market approaches to achieve rapid decarbonization and deliver a much lower limit on warming. The modeling assumes a carbon constraint is applied to the NEM across Scenarios B, C and D to ensure the predetermined carbon budget for each scenario met. This is not an argument for or against such a constraint. It's a necessity of making the model deliver the desired warming outcome. The model is policy-agnostic. The carbon constraint is simply applied at the minimum cost level to drive the decarbonization required to meet the budget. The modeling process uses a net 0 rather than absolute 0 approach to emissions reduction, resulting in the need for some offsets in Scenarios B, C and D to be used to meet the carbon budget in 2050. It does not assume the development or deployment of any technology not already in existence to achieve this. I want to stress that any scenario modeling is by definition hypothetical. The scenarios are not forecasts, predictions or sensitivity analysis. Scenario analysis is a tool to enhance critical strategic thinking and risk management. In reality, we may see a combination of the different scenarios or none or that the drivers in each case are different to what we have contemplated and model today. Either way, they're designed to give us insights and help us recognize trends, identify risks and possibilities and act quickly on the opportunities we see, not to predict the future. We'll regularly revisit and update the drivers and the scenarios themselves as the transition evolves. I'll now take you through some of the preliminary scenario modeling outputs. I will focus on emissions output, which shows the rate at which decarbonization occurs and generation and demand mix, which show investment opportunities available through the transition. I'll start with the emissions reduction pathways across the National Electricity Market. The graph on the right outlines the emissions trajectories from FY '20 to FY '50 under each of our model scenarios. Unsurprisingly, progressive and substantial decarbonization of the electricity sector to 2050 occurs under all 4. The variance in trajectories between each scenario is indicative of the speed at which decarbonization occurs. Let's now have a look at what those scenarios mean for AGL's emissions and fleet. The shape of the emissions pathway for AGL assets closely matches the trajectories for the NEM, albeit with larger step changes. The graph shows that AGL will reach net 0 emissions from NEM assets by 2050 or earlier. This is a result of generator retirements as already planned and lowered capacity factors as assets age and carbon constraints increase. Note that the significant reduction in emissions of more than 20% around the mid-2020 is driven by the staged closure of Liddell during 2022 and 2023. In Scenarios A, B and C, generator retirements are consistent with our present expectations. Only under Scenario D would AGL Loy Yang need to close earlier in order to meet the constraints applied the model. The variance in emissions between these scenarios, especially from 2040 in Scenarios A, B and C, arise from varying load factors driven by the common prices in each scenario. The enduring nature of our assets and their ability to keep operating even at lower levels of output is reflective of their relatively favorable position in the NEM cost stack. So what do all these scenarios mean for AGL and our strategy? In simple terms, there's a huge opportunity to invest in or support the development of renewables, storage and firming technologies as well as distributed energy behind-the-meter products and other low-carbon technologies. You can see in the graph here that under all scenarios, the NEM will probably be deriving at least 50% of its energy from renewables by 2030 and 80% by 2050. The transition to renewables as a result of technology developments and emissions reduction efforts means that our portfolio of large thermal generation and variable renewables is evolving. This will accelerate. Baseload generation is not constantly required at the same levels that it once was. The market is now after dispatchable power to reflect a new supply/demand dynamic, and the market is moving to embrace this capacity. As such, our investments in flexible assets, including gas firming, hydro, and grid scale batteries will enable the transition to renewables, while capturing value for AGL as market changes. AGL has already heavily invested and continues to invest in renewable energy generation. In the past decade, we've increased our renewable energy generation by more than 300% to over 4.4 terawatt hours per annum. In addition to the development of renewable assets, AGL has been developing cleaner filling capacity in the form of fast-start gas power and grid scale batteries. AGL will continue to seek out these opportunities and invest or underwrite where economically feasible. We will continue to use the TCFD framework to inform our strategy and investment decisions. This next slide shows the opportunities for these kinds of investments throughout the NEM and under our 2 bookend scenarios, national targets and 1.5 degree limit. Our modeling shows that over the next 30 years, the NEM will require a further 60 gigawatts of utility-scale renewable and storage capacity. This is an enormous new investment opportunity, a sizable part of which will be developed or supported by AGL. Most of the new capacity will be wind farms and grid scale solar, while grid scale batteries will provide the firming capacity and the smoothing of increasing variable demand and generation in the grid. This fundamental transition is underway, driven by developments in customer needs, community expectations and technology, regardless of which scenario proves as realistic. Here, we show a view of the size of the prize for AGL in the 2 bookend scenarios, considering what AGL's generation volumes and emissions would look like under each and comparing that to what customer demand would be. New opportunities represented on the graph as dark blue in the electricity generation column arise as customer demand and numbers increase and older plants are retired. This aligns with our current expectations of asset life. Although in Scenario D, opportunities would, of course, occur earlier and are larger, given the more rapid decarbonization. To conclude, the detailed scenario analysis work we've done this year has been insightful and constructive, and I'm proud of what the team has achieved. AGL is an essential services provider, operating in a complex, highly regulated and integrated electricity system. As such, it's important to model decarbonization across the NEM to understand the risks and opportunities of the carbon transition. While the paths vary, our modeling shows the destination is clear. Decarbonization of the electricity system will be achieved by 2050 and is accelerating. And all scenarios present AGL with numerous opportunities for investment, driven by technology and customer demand. And under each scenario, we found our business is resilient. The full TCFD report will be published with our full year results on 13th of August. It will contain comprehensive information, analysis and discussion on the assumptions, process and outcomes I've covered today. But as we finalized the report, we want to keep consulting. So with that, we'll now go to questions. Thank you.

[Operator Instructions] We have got a panel of our 8 ESG specialists on the line to take any questions that you might have on our TCFD analysis. So to kick-off, the first question comes from the line of Rob Koh from Morgan Stanley.

So maybe just 2 questions if I can. I want to talk about AGL's renewables. And I wonder if you could comment on the importance of transmission constraints in the scenarios that you've been working on. And also, if you could just update us on where AGL's renewables production is that versus compliance requirements?

Rob, it's James speaking. So the first question was in relation to what level of transmission investment in effect you're getting at? What level of transmission investment are we assuming is required in order to deliver upon what is foreseen in the scenarios? I believe that -- I think, yes. So I mean the model assumes that the capacity will be built. It is not going into broader questions of policy in relation to how that may come to be. So recognizing that there are potential technical constraints today in relation to how do we get to market the capacity that's required, is it relation to load factor constraints, et cetera, that have occurred. That's all recognized, but this is not a technical review of how those -- these scenarios do not seek to solve those technical challenges. It is a "top down" view of what kind of capacity would come into the market under each of those temperature limit scenarios. I'm going to throw to Theo Comino, who led the actual modeling. Just see, Theo, if you've got anything to add on that specific question.

Thanks, James. Very briefly, we did look at, and we have included some assumptions about interconnector buildout. So under each of the scenarios, and this will be disclosed in the report. The number of additional interconnectors that would need to be built out as per effectively referencing back to the AML ISP, and so that is included, but no further details around additional requirements. So it's in the NEM, particularly around transmission buildout for renewables, et cetera.

Okay. Yes, that's clear. And to be clear, no one expects AGL to be responsible for that transmission piece. That's fair enough.

And your -- and to go back to your second question, Rob, if you wouldn't mind repeating that?

Yes. So just at this point in time, if you could just update us where your renewables production levels are at versus compliance requirements?

I mean we've got no further updates on that beyond what is reported on a 6 monthly basis in our financial statements. I mean this is a 30-year model around looking at what -- how our portfolio would evolve in as the market evolves to meet to certain standards. It's not looking at the specifics in year-to-year on -- in terms of year-to-year compliance with the existing policy framework.

Yes. Okay. No, that's fair enough. All right, and maybe just one more question.

Yes, go ahead.

Yes. Yes. I mean, we can -- I won't go back to the last half year report, I'm sure it's all there. And so -- yes, just maybe one last question for, I guess, your thoughts. I guess part of the TCFD framework is talking about physical asset hardening and things like that. I wonder if you've -- if there's a future area of investigation or if you could comment on things. And in particular, I guess, we'd be quite interested to know what the sea level elevation is for Torrens Island.

So the physical risks are absolutely something that we recognized as a component of TCFD that hasn't been in the primary focus for this year's modeling. Because this year's modeling, we've spend a great deal of time looking at lengthening the time frame and broadening out the temperature scenarios, which is very -- so that's been the focus this year, but we acknowledge that this year, there isn't a great deal more detail on potential physical risks around climate change and how that might affect our fleet. And there's 2 reasons for that: One of those because iteratively, we expect to address that in future reports. And this year, we had the focus that we had on the time frame and the breadth of the temperature scenarios. The other reason is that we do not believe in terms of materiality of risk, certainly in the shorter term, that it is as urgent to address from the perspective of disclosures around risk management. So yes, of course, there will be physical risks in relation to all assets in the NEM as a result of climate change. We believe the diversity and scale of the portfolio means that, that is quite -- that is naturally quite well addressed, but we will explore it further in future reports and anticipate it being a bigger component of the 2021 report. As far as TIPS goes and how far -- you have a question was how far above sea level, is it?

Yes, just if you have a rough -- yes.

Yes, yes. I believe -- we'll get back to you. I believe it's about 13 meters, but we will come back to you with the -- with more detail on that because it's not something that we have to hand and the team are just going to look into now, and we'll come back to you with a specific answer.

The next question comes from the webcast from [ Murray ]. When would Loy Yang need to close under Scenario D?

Thank you. I'll let Theo take that one.

Thanks, James. So under Scenario D, given the constraint to achieve a 1.5 degree carbon budget, Loy Yang closes approximately in 2035 -- calendar year 2035.

Great. The next question is also from the webcast from [ Serena Kiptoo ]. Can you see any possibility for the closure of Bayswater to be brought forward?

It's James Hall speaking. I mean, certainly not, the modeling has not indicated that the scenarios that we've looked at, that is something that would occur, no.

Thanks, James. The next question is also from the webcast from [ Ian Woods ]. Once renewables are above 60%, there will be significant times when renewables can all -- can provide all energy needed for the NEM. What assumptions are made as to how Loy Yang will respond to such circumstances?

Thank you, Ian. I'll give a high-level answer, and then I might allow Theo to go into more detail on the way the models actually dealt with that. The high-level answer I'll give is that Loy Yang, and one of the reasons why you see Loy Yang enduring -- the Loy Yang A enduring in all of the scenarios, especially in scenarios B and C, the response 2020 and response 2030 scenarios is a relatively low cost asset. And its ability to keep operating even at much lower levels of -- to keep operating profitably even at much lower levels of the capacity are relatively strong compared with some other assets. I'll let Theo answer more specifically on how that's been modeled.

Thanks, James. It's Theo here again. So in essence, the renewable increase leads to a decrease in generation required out of the thermal assets across the NEM, including the Loy yang and particularly in those scenarios B and C, but also in Scenario D. And we've looked at that and the load factor that, that then leads to for Loy Yang. And so effectively, that is the way it has been undertaken in the model and considered. And as James pointed out, Loy Yang being a very low-cost generator, means that it is more viable than other generators, given that reduction in output, but you do see a significant drop in load factor, given the increase in renewables. I think hopefully, that answers your question.

And from [ Ian ] again, how much would Loy Yang A need to be written down under Scenario D?

Thanks. So there are a very large number of other factors, of course, that would contribute to how the financial carrying value is assessed of all assets, one of which is obviously lifespan, but others relating to energy prices, et cetera. So I can't -- we can't give a specific answer as to what the carrying value of a particular asset would be in a particular scenario, but we couldn't be answering, I'm afraid, it depends. There would certainly be situations where there would be no write-downs required. And there would be other situations where there would be some write-downs required. And that is general comments across all scenarios, not specific to scenario D.

We'll take a few more from the webcast before we go back to the phone. This is from the line of [ Ed John ]. On the back of this analysis, what engagement is AGL planning with federal and state-based policymakers to improve relations investment in renewables?

Ed, look, I mean, I wouldn't say that we're planning specific engagement off the back of the analysis. So I would say the analysis and the modeling is another component of that -- the sort of body of information that we can discuss with others in the industry with policymakers, et cetera. We've already had 1 or 2 interesting discussions with representatives of government about this analysis. So it feeds into that, but it's just one component. This is not a policy document. This is a technical risk management analysis. So to the extent that other parties in the industry or regulators or policymakers are interested in engaging and getting more detail, we'll, of course, be very happy to have those discussions with them. But it's not intended as a policy engagement document as such.

Thanks, James. And again from [ Ian ]. Did this scenario analysis consider the reductions in other sectors in the economy? And in particular, that lower abatement costs may need the NEM achieving 0 before other sectors.

Thank you, [ Ian ]. I'm going to allow Theo to answer that one.

Thanks, James. Thanks, [ Ian ]. So the approach taken with the modeling -- I think here it's probably easier to answer your question by giving you a bit more detail around the modeling approach. The approach taken was as James pointed out in his presentation, a "top down" approach, and that looked at referencing our scenarios to international scenarios, the RCPs and the SSPs. And so here, we use the RCPs and we looked at those, and we took the approach of trying to determine with our partners, KPMG and Aurora Energy Research in Australia, in a NEM-wide carbon budget and ultimately found that the best approach and the most open approach was to use the already-determined modeling assumptions and carbon budget that AEMO had developed. Those budgets aligned quite nicely with the RCPs and gave us a good basis to start with. Now those carbon budgets build into it a fair share approach to dealing with the decarbonization of the electricity sector. And so as a result, what you see, particularly in Scenario D, is what we feel is a good representation of what would need to occur, given the broader economy decarbonization. However, we did not explicitly look at the decarbonization required by other sectors and modeled that. And as James pointed out, we applied a carbon constraint to the electricity market to require a decarbonization of that sector to a budget for that sector. So as a result, it determines a carbon price to the electricity sector, which is significantly lower than the carbon price that you would anticipate would be required for the economy in a broad sense.

We'll go back to the conference call now and take a question from the line of Tom Allen from UBS.

Just a quick question. How might the federal government's low emissions technology roadmap influence this report? Or how are you thinking it might influence future investment opportunities for AGL?

Thanks, Tom. First comment I'll make is, obviously, the modeling was largely undertaken at the end of last calendar year, start of this calendar year that most of the modeling is actually undertaken. So it didn't specifically model any policies or commitments that have been made since then. Second comment I'll make is, it is a policy-agnostic report in that it has -- the first scenario takes the existing status quo, the other 3 scenarios take a "top down" objective and then seek to solve within the NEM for that "top own" temperature objective. Clearly, the actual outcome that we see over the next 30 years is going to be heavily influenced by policy decisions that are made and also by not just the level of policy support for particular technologies, but also the actual speed of development for those for those technologies themselves or indeed for other technologies that may not yet be perceived to be commercial and may become commercial over that time frame. So it's a fairly long answer, but there is no specific consideration of particular policy pathways or policy frameworks that may evolve over time. Obviously, how those different technologies, whether it be carbon sequestration, whether it be other forms of storage technology, how they unfold will, of course, influence how these -- how the world actually takes shape.

We'll go back to the webcast. [Operator Instructions] But now back to the webcast. This question comes from [ Jodi Barns ]. Does this scenario analysis change AGL's thinking about how they will set emissions reduction targets beyond the closure of the power station?

Thanks, [ Jodi ]. Not explicitly. Again, I would just go to the observation that the risk management exercise, the scenario modeling exercise is not undertaken with the expectation that it will necessarily lead to any changes in our policy positions. But of course, the work -- any work that we undertake informs our view of the resilience of the business in -- to adapt to different scenarios. But our actual objectives and targets and metrics in relation to emissions reduction as it stands, the key objectives and goals remain those set out in the Greenhouse Gas Policy in 2015 in relation to closing the coal-fired power stations at the end of their capital bids and not investing in new coal, et cetera.

Thanks, James. Another from the webcast from [ Serena Kitpoo ]. Has your assessment of likely closure for Loy Yang adequately considered increasing community pressure to close as Australia continues to be impacted by physical weather impacts?

The modeling is somewhat, if you like, agnostic to such issues in that modeling is simply taking a temperature objective and solving "bottom down" for that. I guess what I would say is the way in which community expectations evolve, the way in which the community expectations and how climate change is addressed evolve would, of course, be a significant factor in determining what the future is -- which of these scenarios that we've modeled, the future is most likely to look like.

Great. Thanks, James. Another from [ Murray ] on the webcast. Is the prospect of a significantly earlier closure date for Loy Yang under the 1.5 degree scenario the main reason that AGL hasn't committed to adopting a science-based target?

Our concern with the -- well, science-based targets initiative requires a commitment to a world with a 1.5 degree limit, which would require a commitment for AGL, which is outside of our current commitments.

Great. Thank you. There's one on the webcast from [ Serena ] again. The more ambitious scenarios indicated more opportunities for AGL. Wouldn't it, therefore, be in AGL's interest to engage more proactively with government to bring forward decarbonization?

I mean, absolutely, we see all of the scenarios presenting a wide range of opportunities to invest. And we are very proactively engaged with government on how that should occur -- on how the transition should occur, but it's not for us to push that agenda in a way that is inconsistent with a broader direction of the industry and the broader needs in the market. So that is always the balance. It's what -- how is the market evolving? And what is the correct pace of that evolution in the market, which takes into account a number of factors, obviously, security of supply, affordability of supply and the importance of decarbonization occurring? So it's a multi-factor discussion in which we remain very proactively involved.

Thanks, James. We're going to go back to the conference call now. The next question comes from the line of James Nevin from RBC.

Very interesting. I just had a question on -- when you look at the different scenarios and some of the financial outcomes, and are you able to talk about maybe electricity prices? And like if there's -- I think a market-led decarbonization, does that mean you see -- do you think electricity prices maybe they need to go up to encourage new generation into the grid? Or do you see -- is there like forward policy response equipment underwriting the new generation? Just if you could have any thoughts on what you see happening there?

Look, I mean, the model across all 4 scenarios assumes that there is a sufficient -- that the market is giving sufficient pricing for investment to occur at the required times. And clearly, that's going to then see variation in market pricing over the course of the 30-year framework. That's a level of detail that -- sorry, the new framework is a 30-year model. That's the level of detail that we will be able to provide a bit more into when we actually publish the full report in August.

So you'd be able to provide more information on kind of the parts of electricity prices, is it? Or...

When we publish the full report in August, it will have more detail around those sorts of -- around that sort of stuff, yes. But we're not -- and we're obviously not going to be giving a 30-year forecast for electricity pricing. But it is our -- the model is constructed on the basis that the market is providing a price which allows investment to occur. It is not making the assumption that -- your question is are we making the assumption that there's going to be policy in place to subsidize investment, then no, that is not the case. It's a market now.

The next question comes from [Talia Williams ]. Irrespective of scenario analysis, theoretical modeling and policy settings, what is AGL doing to drive and facilitate rapid technological change on the ground at scale to enable decarbonization?

Thanks, [ Talia ]. We are investing and continuing to invest and seeking to invest in the technologies that over time under all of these scenarios are going to be those that displace the legacy base like thermal assets, but that's going to take decades. As we called out in the presentation, we've greatly increased the level of renewables in the portfolio over recent years as has occurred throughout the NEM. We continue to do that still within -- I think, reached full capacity only late last month -- because the gap, 250 megawatts is the largest operating wind farm in the country at present. We have a number of large-scale solar projects in -- that are underway or where we are providing underwriting to others who are developing them. We've now got 3 or 4 battery projects that are either operating or in the works. So we are seeking where we can to invest to underwrite and to deploy our balance sheet to the new technologies that are going to underpin the NEM for decades to come. We also have a program around residential batteries, around supporting customers with solar to provide more of their own storage at home. So we are investing where we can.

Thanks, James. And it looks like we have no more questions on the line now. So if there's no more questions, I'll hand back to James for his closing remarks.

Thank you, Chantal. Thank you, everyone, for listening, and thanks for your questions. This has been a very interesting process for us to undertake this sort of modeling to take it out all the way to 2050 to look across these 4 scenarios. As with any scenario modeling exercise, there are always different ways you could do it. There are always ways it can be improved. And we are very keen to get feedback around how we can think about what we do next year. We will be continuing to reiterate this. We talked about the physical risk aspect, but we'll be looking to build upon this year-on-year. And it will become a greater and more integrated component of our portfolio planning. And of course, it will link over time more and more with broader strategic decisions that are being taken by the business. But we're very grateful for you taking the time to listen today, very grateful for questions and look forward to any further feedback that you may have. Thank you.