Avernus is seen several times during the Soldier's Peak quest in flashbacks to the time of Grey Warden Commander Sophia Dryden's defeat at the hands of King Arland. He is a Blood Mage in the service of the Grey Wardens who summoned dozens of demons to aid in the defense of Soldier's Peak, but the demons he suffered were out of control and ultimately cost them the fight. Avernus retreated in that battle and left Sophia to fend for herself. It was assumed he later perished, but as it turns out, he has lived through the centuries, extending his life using the darkest secrets of blood magic that he uncovered through gruesome experiments on human test subjects.
 Taint Research
Avernus' morals and actions add a new twist to the Warden mantra of "whatever it takes" (Duncan himself mentions that Wardens do whatever it takes). During his time he experimented on other Grey Wardens to uncover the power of the taint and how it could be harnessed in ways that would unlock even greater power. According to his laboratory notes he had succeeded to some degree, but had run out of test subjects to continue his experiments. A vial sits outside his main laboratory, when ingested unlocks new abilities under the heading "The Power of Blood."
 Torn Veil
Avernus has stayed in his tower on Soldier's Peak for centuries, using all his power to maintain a mist that contains the torn Veil as much as possible, and preventing the demon possessing Sophia Dryden's body from leaving the compound.
When you speak to Avernus you have the option to spare his life, or kill him for his crimes. If you spare his life you may choose to let him continue his research as he wishes or use only humane methods. If you choose to attack him he will summon up demons and fight you. When defeated he drops Avernus' Robes, a set of robes that enhances Blood Magic (there is no specification of what it does).
If spared, Avernus can no longer be attacked, so most players will opt to kill him and get the robes. Also if spared, he does not appear to offer any other awards and never seems to complete his research. Some players speculate he may play a role later in the series if spared.