AGL Energy Ltd plans to spend A$10 billion ($9 billion) building renewable production capacity by 2020 in line with Australia's quest to source a fifth of its power needs from alternative sources.

AGL managing director Michael Fraser in an interview revealed this with Bloomberg in Melbourne.

The listed firm in the Australia's stock exchange also happens to be the largest electricity retailer in the country, noting that some 33 percent of AGL's power generation portfolio is from renewable sources, including wind, solar, and landfill gas.

He noted that they are now seeking approval for a gas-fired power plant in the southeastern state of New Zealand after committing to build a A$1 billion wind farm in Victoria with partner Meridian Energy.

AGL accelerated plans for renewable energy projects, one in particular is the 420-megawatt Macarthur wind farm. The Australian Senate approved revisions to laws aimed at spurring investments for these kinds of projects, it said in June.