AGL is closing two of its coal-fired power stations earlier than expected as part of its business plan and strategy to reduce "climate related risks".
The Bayswater black coal-fired power station in New South Wales will now close "no later than" 2033 - two years ahead of schedule.
The brown coal-fired Loy Yang A plant in Victoria has a closure date of 2045 - three years earlier than the previous date.
The measures are part of AGL business restructure. The company plans to split into two listed entities - energy retailer AGL Australia and electricity generator Accel Energy - by 30 June.
The two entities have now been assigned emissions reductions targets, putting them on course to reach net zero in coming decades.
"As a result, emissions from Accel Energy's electricity generation assets will be reduced by a further 90 million tonnes over the period financial year 2023 to financial year 2050 compared to modelled outcomes of our previous commitments," AGL said.
The company decreased by 40.9 per cent to $194 million compared with the previous year.
Environmental advocates said the climate strategy is not ambitious enough. Greenpeace criticised AGL for what it described as a "token effort" in closing the power plants earlier than anticipated.
"AGL doesn’t even get a golf clap for its timid token effort in delaying the closure timeline for Loy Yang A, Australia’s worst-polluting coal-burning power station, to 2045," Greenpeace's senior campaigner Glenn Walker said
"In delaying Loy Yang A and Bayswater’s inevitable closure, AGL is putting worker and investor security, as well as the climate, at serious risk."
Dan Gocher, director of Climate & Environment at the Australasian Centre for Corporate Responsibility, said the closure dates have been brought forward by three years - a shift he has described as "next to meaningless".
“AGL proves its incompetence time and again by continuing to ignore the majority of its shareholders with its failure to align the closure of its coal-fired power stations with the Paris Agreement," he said.
Meanwhile, Energy and Emissions Reductions Minister, Angus Taylor, welcomed AGL's "long-term plans" for developing industrial energy hubs, and plans for investing in new dispatchable capacity (power sources that can be turned on or off according to demand.)
But he has expressed caution over the transition as nearly 5,000 megawatts will remain open in the National Electricity Market when the AGL power stations close.
"The exit of such a considerable amount of reliable generation is a concern for the continued reliability and affordability of the system," he said in a statement.
"The government will closely monitor and model the impact of these closures, to hold industry to account on the dispatchable capacity needed to ensure affordable, reliable power for consumers."
The update was announced in AGL's first half results release issued on Thursday.
AGL's bottom line first-half net profit is back in the black at $555 million, after last year's result was hit by significant and one-off items resulting in a more than $2 billion loss.
The net underlying result was down 40.9 per cent to $194 million, excluding the impact of hedging and other items.
Meanwhile, AGL says a rise in global energy demand will boost future earnings.
"With the rise in energy and commodity prices across the globe, AGL Energy is well positioned to benefit from improving wholesale electricity prices seen over the past six months," CEO Graeme Hunt said on Thursday.
"We expected to see this reflected in future earnings beyond financial year 2022."
With Rayane Tamer.
