From BHP to Santos: Where do these ASX energy firms stand in green transition?

Highlights

  • The electricity generation process is one of the top contributors to greenhouse emissions in Australia.
  • Most of the electricity in the country is produced by the burning of fossil fuels.
  • The country has made ambitious commitments to reduce greenhouse gas emissions by 26%-28% below 2005 level by 2030.

Climate change has become a hot-button issue for the entire world and especially for the energy sector companies as they face significant challenges and strive hard to transition to clean energy. A lack of accountability in the past has led to contentious climate issues. The electricity generation process is one of the top contributors to greenhouse emissions in the country.

Australia has limited hydro and geothermal energy resources, therefore the dependency on fossil fuels for electricity generation remains high. As a result, electricity is mostly generated through coal and natural gas. The country is one of the worst performers in the list of 170 United Nations member countries in an assessment to measure the progress toward a range of international sustainable development goals. Currently, Australia is ranked 35th in its development to meet all the Sustainable Development Goals. Australia's path to a clean energy economy has not been smooth, the historical dependence on fossil fuels and a lack of federal leadership on climate policies mean a challenging roadmap for the country's clean energy commitments.

In the backdrop of this, let's look at a few Australian energy players and their stance on the clean energy mission.

AGL Energy Limited

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AGL Energy (ASX:AGL) is one of the leading suppliers of electricity in Australia, comprising coal and gas-powered generation. The company also generates electricity through various renewable sources. The company posted a loss of AU$2.06 billion in the last financial year.

However, the company is supporting the country’s Powering Australian Renewables initiative to meet Federal Government’s targets. AGL has also invested significantly in the Silverton Wind Farm Project, Coopers Gap Wind Farm, Nyngan Solar Plant and Broken Hill Solar Plant project.

Related Article: Why AGL Energy (ASX:AGL) witnessed a 34% dip in FY21 underlying profits

Origin Energy Limited

Headquartered in Sydney, Origin Energy (ASX:ORG) is one of the biggest supporters of renewable energy with an astonishing portfolio of 700MW contracted wind power. The company has invested in various renewable energy projects like the 220 MW Bungala solar project, 56 MW Moree solar farm, 150MW Daydream solar farm, the 100 MW Clare solar farm and a 10.8 MW Lakeland solar project in Queensland.

ORG is one of the largest green energy suppliers of the country, with significant progress made towards a secure, low-carbon intensity, lower-cost solution for its customers.

Also Read: Why Origin Energy (ASX:ORG) share price fell 9% today

BHP Group Limited

Source: © Transversospinales | Megapixl.com

BHP Group (ASX:BHP) is the one of the world's leading resource company. The company is engaged in the extraction and processing of oil & gas, and minerals. On Monday, BHP and Woodside Petroleum (ASX:WPL) announced an update to combine its O&G business with an all-stock merger.

The company divested its oil and gas assets to WPL to retain the support of the world’s largest investors, such as Vanguard and BlackRock, which are prioritising ESG issues.

Related Article: Is BHP Group planning to sell its petroleum assets to Woodside Petroleum?

Santos Limited

Santos Limited (ASX:STO) is an ASX-listed independent oil and gas producer operating premium assets  in Asia and Australia. At the start of the month, Santos agreed to the proposed merger with Oil Search Limited (ASX:OSH), creating an AU$20 billion company.

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The merger of giants was intended to help the combined group for better energy transition than if they remained separate. After combining with OSH, STO became the country's top O&G firm. The company's management said that the larger group would be well-funded and well-positioned to finance the capital required for the company's push to develop carbon capture and storage (CCS) and eventually hydrogen. The merged entity would be better funded to invest in clean energy technology.

Good Read: Santos Limited (ASX: STO) posts 222% spike in 1H FY21 net profit

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