AGL Energy (ASX:AGL) is expanding its flexible generation and storage portfolio as Australia's electricity system incorporates greater levels of renewable generation and new sources of demand.

The company entered FY2027 with the 500 MW Liddell Battery operational, construction progressing on the 500 MW Tomago Battery and flexible fleet capacity of 8.7 GW. Its FY2026 results also showed higher underlying EBITDA and improved generation availability, while national electricity forecasts point to substantial growth in data-centre power consumption over the coming decade.

Liddell Battery

The Liddell Battery commenced operations in July 2026 following construction and commissioning at the site of the former Liddell Power Station in New South Wales.

The battery has a capacity of 500 MW and a two-hour duration, equivalent to 1,000 MWh of energy storage.

It is a grid-forming battery, meaning it can provide services that contribute to power-system stability in addition to storing and dispatching electricity.

The project cost approximately AUD 750 million and was developed with support from an Australian Renewable Energy Agency grant and a Long-Term Energy Service Agreement under the NSW electricity framework.

The Liddell project joined AGL's existing large-scale storage assets, including the Torrens Island and Broken Hill batteries.

Tomago Development

AGL Energy is also progressing construction of the Tomago Battery in the Hunter region of New South Wales.

Tomago will have a capacity of 500 MW and a four-hour duration, providing 2,000 MWh of storage.

Construction began in December 2025, with operations targeted to commence during the second half of 2027.

The project's estimated construction cost is approximately AUD 800 million.

Tomago has also secured a Long-Term Energy Service Agreement under the NSW Electricity Infrastructure Roadmap.

Together, Liddell and Tomago represent 1 GW of large-scale battery capacity across AGL's Hunter-region development program.

FY2026 Results

AGL reported underlying EBITDA of AUD 2.10 billion for the year ended 30 June 2026, an increase of 2% from FY2025.

Underlying net profit after tax declined 2% to AUD 631 million.

Statutory profit after tax increased to AUD 756 million, up AUD 644 million from the previous financial year. The statutory result included gains associated with the divestment of AGL's interest in Tilt Renewables and movements in the Fair Value of financial instruments, partly offset by asset impairments and Retail Transformation costs.

Underlying Operating Cash Flow before significant items, interest and tax reached AUD 1.69 billion.

AGL ended the financial year with AUD 1.55 billion of cash and undrawn committed Debt facilities available.

Generation Portfolio

AGL's total generation Volume was 31.8 TWh in FY2026, down 3.4% from the prior year.

Fleet Equivalent Availability Factor improved by 4.3 percentage points to 83.4%.

The company said softer wholesale electricity prices and lower market Volatility were accompanied by improved fleet availability and flexibility.

AGL's flexible fleet capacity increased by 0.4 GW during the year to 8.7 GW.

The portfolio includes batteries, hydro generation and approximately 3.3 GW of flexibility associated with coal-fired generating units.

This capacity enables AGL to alter output in response to changing Supply and Demand conditions across the electricity market.

Data-Centre Demand

Electricity demand from data centres is becoming a larger consideration for Australia's power system.

The Australian Energy Market Operator's 2026 Electricity Statement of Opportunities forecasts data-centre electricity consumption in the National Electricity Market increasing from approximately 5 TWh in FY2026 to around 34 TWh by FY2036.

That would increase the sector's share of grid-supplied electricity from about 3% to approximately 13%.

The forecast methodology accounts for uncertainty around proposed developments, including projects that may not proceed and the gradual increase in electricity consumption after new facilities connect.

The expected increase forms part of the broader electricity-demand outlook facing generators, networks and storage providers across the National Electricity Market.

Renewable Contracts

AGL has also expanded its contracted renewable-energy portfolio through long-term power purchase agreements.

The company has signed a 15-year agreement with Tilt Renewables covering approximately 123 MW of expected generation from the Palmer Wind Farm in South Australia.

A separate 15-year agreement covers 105 MW of expected generation from the Waddi Wind Farm in Western Australia.

Palmer is targeting commercial operations from December 2028, while Waddi is targeting commencement during the second half of 2028.

The agreements form part of AGL's target to add 6 GW of renewable and firming capacity by 2030.

FY2027 Guidance

AGL expects FY2027 underlying EBITDA of between AUD 1.90 billion and AUD 2.20 billion.

Underlying net profit after tax is forecast at between AUD 470 million and AUD 670 million.

The outlook incorporates a full year of Earnings from the Liddell Battery and lower operating costs from AGL's cost-reduction program.

These factors are expected to be balanced by lower wholesale electricity prices flowing through contracted positions, higher gas costs as lower-priced legacy supply contracts roll off and increased Depreciation and amortisation.

AGL Energy (ASX:AGL) therefore enters FY2027 with an expanded flexible-generation portfolio, the Liddell Battery operational and further storage and renewable projects progressing through development.