On Wednesday AGL outlined plans for a $1 billion fund to invest in renewable energy projects while it has also obtained access to technology that will enable it to potentially tap into next-generation home battery systems to provide a "virtual power station".

These moves came as it disclosed a stronger than expected December half profit underlying net profit of 375 million, up from $302 million a year ago, which prompted it to signal a full-year underlying profit to be in the "upper half" of the $650-720 million figure flagged earlier.

Underlying earnings a share rose to 55.6¢ from 47.7¢ which paved the way for a rise in the interim dividend to 32¢ a share from 30¢.

Heavy provisions of $640 million as it moved to abandon gas exploration and development resulted in a statutory loss of $449 million for the half.

"We are a growth stock – and we continue to look for growth opportunities," the company's chief financial officer, Brett Redman told analysts when discussing the December half performance.

The coldest winter in many years in 2015 which was coupled with higher wholesale electricity prices, in part a result of supply interruptions such as the prolonged closure of the Basslink connection with Tasmania, helped to drive up profits from its power stations, in particular from Macquarie Generation in NSW.

AGL also operates the Loy Yang power station in Victoria, which is one of the heaviest carbon emitters in the country.

AGL has committed publicly to shuttering the Liddell power station in 2022, Bayswater in 2035 and Loy Yang in 2048, unless there are changes to government policy or electricity market dynamics to force the closure ahead of this timetable.

"The economic viability could change, depending on government policy or macro conditions could change," Andy Vesey, the chief executive said.

Ahead of that, AGL has invested $US20 million ($28 million) in US company Sunverge which has developed software which enables the control of large numbers of battery storage systems and potentially rooftop solar systems as a "virtual power station" by allowing thier control as a single entity to sell output into the electricity grid.

It is also investing $200 million in the renewable energy fund which it anticipates will develop 1000 megawatts of projects which would cost as much as $3 billion to develop, with initial output to be sold to AGL, which would also manage the fund.

But beyond that initial period, future sales would "depend heavily on government policy" which could change.

But until this fund is further progressed, it is difficult to assess the prospects for AGL, analysts said.

"It is early days yet, but it is an opportunity to sell it developed solar assets and have a minority equity," Shaw and Partners analyst David Fraser said.

AGL profited from the rise in wholesale power prices at a time when underlying demand remains flat.

"It is hard to predict what the power price will be but it's got a bunch of people who can manage their risk quite well," Mr Fraser said.