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## Merchant Energy 

Merchant Energy manages the risks of procuring and delivering gas and electricity for AGL’s wholesale and retail portfolios. It also manages AGL’s compliance with mandatory renewable energy targets. 

Merchant Energy’s business groups are: 

> Energy Portfolio Management – which manages procurement of AGL’s wholesale electricity and gas requirements, including management of the commercial aspects of operating AGL’s own electricity generation assets and management of AGL’s green product obligations. 

> Power Development – which develops all AGL’s electricity generation projects. 

> Merchant Operations – which operates and maintains AGL’s portfolio of electricity generation assets including wind farms, hydro assets and gas-fired generation plants. 

> Energy Services – which provides customers with expert advice on a range of energy related matters, including energy efficiency, and project development and management. 

## Energy Portfolio Management 

Energy Portfolio Management (EPM) manages the price risk associated with procuring electricity and gas. It also manages AGL’s green product obligations such as those relating to the mandatory renewable energy target, and controls the dispatch of owned and contracted electricity generation assets which complement the portfolio of electricity hedge contracts. 

EPM’s operating EBIT increased by 0.9% to $430.1 million. A reduction of $9.4 million in contribution from wholesale electricity gross margin was offset by increases of $2.0 million from wholesale gas gross margin and $8.5 million from eco-markets gross margin.$^{26}$ 

