AGL will go significantly higher on result, page-3

As far as I am concerned AGL is worth greater than $15 per share. It was $14 for years before it got into the generation side in a serious way.

The guidance of between $580 and $780 million NPAT was reiterated in November. I interpreted this as being closer to $580 million otherwise they could have narrowed the range. Therefore I am expecting half year NPAT of $300 million. Also expecting a dividend higher than 30 cents per share.

As the transition to renewables gathers pace eg with the closure of Eraring and Yallourn power stations the price of electricity generation will increase. Bayswater and Loy Yang will become cash cows not liabilities as some suggest.

The grid needs more batteries to store solar and wind power. The cost of batteries is $1.5m per MW with no economy of scale. 500MW battery cost $750m. For every 1MW of size you get 2MWhr of generation. If batteries are fully charged and discharged every day of the year then you get 730MWhr of generation. Depreciation, interest, and operating expenses put the cost per MWhr near $400. Power companies are not in the business of making losses just to please others. Power prices are only going up and like it or not AGL's stations are going be running longer and making more money.