Hydrogen, EVs, and coal fire, oh my. Here’s how the energy transition might impact AGL (ASX:AGL) shares in 2022

a female superhero dressed in shiny green with a mask leaps in the sky with leg and arm outstretched in a leaping action.

Own AGL Energy Limited (ASX: AGL) shares? The company is seemingly working on a spin towards green energy in 2022.

It has announced several ‘green’ initiatives in recent weeks and is still working to ditch its increasingly contentious coal-fired assets.

Let’s take a look at what decarbonisation activities the company expects to get up to this year.

At the time of writing, the AGL share price is $6.37, up a modest 0.95% on the day.

Here’s what might drive AGL shares in 2022

AGL has been involved in hydrogen for years through its position in the Hydrogen Energy Supply Chain Project.

However, the company’s interest in hydrogen was recently amplified through an agreement with Fortescue Metals Group Limited‘s (ASX: FMG) Fortescue Future Industries (FFI).

The pair will be working to create an industrial energy hub where AGL’s Liddell and Bayswater power stations currently stand. The hub will be capable of producing green hydrogen.

AGL CEO and managing director Graeme Hunt said the company will be undertaking a feasibility study for the project over the next 12 months. It’s hoped this will pave the way for a production timeline.

FFI founder and chair Dr Andrew Forrest commented on the AGL deal:

[Green hydrogen] is a practical, implementable solution that can collapse emissions and create strong economies worldwide if leaders like Graeme are fully supported by global investors and local government alike.

On top of that, AGL shares might be impacted by their continuing foray into electric vehicle (EV) charging stations.

The company, using a grant from the South Australian government and working alongside Wilson Parking, will be installing 18 EV chargers in the Adelaide CBD. It believes doing so will help reduce barriers to EV uptake.

It is also part-way through a 3-year smart charging trial that will find how to best manage the electricity grid when demand for EVs increases.

On top of leaning into low-emissions technology, the company is distancing itself from its coal-fired assets. In fact, it’s planning to remove its coal-focused business entirely.

AGL is planning to split in two in 2022. After the demerger, the new Accel Energy will take over AGL’s electricity generation business. At the same time, its electricity retail and storage business will be renamed AGL Australia.

Thus, the company’s turn towards the energy transition may have an effect on the AGL share price in 2022.

Many eyes will likely be on the company in the coming months to gauge whether it continues its pivot to renewables such as EVs and hydrogen, and what impact splitting from coal might have.

The post Hydrogen, EVs, and coal fire, oh my. Here’s how the energy transition might impact AGL (ASX:AGL) shares in 2022 appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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