Power provider Origin has outlined plans for “multi-gigawatt” growth in renewable energy this decade after last month announcing it would shutter the 2.88GW Eraring power plant in New South Wales (NSW) in 2025, seven years earlier than originally scheduled.
Origin Energy chief executive Frank Calabria this week said the rapid transition of Australia’s fossil fuel-dominated power grid towards renewable energy sources presented a “lot of growth opportunities for an organisation like Origin” which is seeking to become a net-zero business by 2050.
“We have a belief in decarbonisation that’s good for business and our shareholders, and good for the environment and customers,” he said. “We’ve made some meaningful decisions to move our portfolio in that direction.”
Calabria told investors on Wednesday the company is targeting a staged and disciplined investment as part of a strategy refresh in response to the continuing, rapid transition of the National Electricity Market (NEM).
Origin said during the investor briefing it is “strategically positioned to benefit from the energy transition through growth opportunities such as energy retailing, providing a diverse portfolio of energy supply in a low-carbon post-Eraring world, gas production and wholesaling, and its investment in British renewable energy group, Octopus Energy”.
The company said it is preparing to give financial approval for the first 460MW stage of a 700MW big battery to be built at the site of Eraring near Newcastle by the end of this year. That will be followed by the construction of the proposed 240MW second stage of the battery.
Origin also plans to grow its in-house virtual power plant (VPP) – comprising rooftop solar installs, electric vehicles and batteries linked to demand-management technology to control electricity flows – from about 200MW to 2GW.
Calabria said the growth could be achieved over the next four years with the VPP to deliver “very low cost” replacement capacity for the coal-fired Eraring plant near Newcastle.
Alongside the expansion of the VPP and an increase in battery storage, Origin also plans to target domestic green hydrogen supply from the mid-2020s and export supply from late 2020s. Origin predicts the hydrogen market to grow by 500% by 2050.
Origin said it will also partner with others and use third party capital to grow its renewables energy supply, including growing its solar business.
Origin is already one of Australia’s largest buyers of utility scale solar, with agreements to buy more than 680MW of solar energy signed since 2016. These include power purchase agreements with the 56MW Moree Solar Farm in northern NSW and the 100MW Clare Solar Farm in northern Queensland.
“The customer experience will change, our capabilities, the use of technology, the scale of our customer base, the products we offer,” Calabria said. “As Eraring comes out, we have a great opportunity to grow both renewable storage and other ability to manage energy supply.”
The announcement from Origin comes just weeks after it brought forward the closure of the largest single power station in Australia from 2032 to August 2025, declaring there is no longer business case for “baseload” fossil fuels.
Origin’s proposed exit from coal-fired generation reflects the continuing, rapid transition of the NEM as we move to cleaner sources of energy,” Calabria said at the time.
“The reality is the economics of coal-fired power stations are being put under increasing, unsustainable pressure by cleaner and lower-cost generation, including solar, wind and batteries.”
Origin said it is confident that building more on-demand energy assets like big batteries as well as new transmission lines to improve the flow of power would “more than compensate” for Eraring’s exit.
“The transition is already changing our customers’ energy needs,” the company said. “Customers are increasingly installing rooftop solar and purchasing less grid energy in the middle of the day.
“Grid-scale renewable energy is also increasing, further reducing the need for baseload power.”
Also this week, Origin said it would undertake an on-market share buy-back of $250 million, saying it was in a “strong financial position” with a robust outlook for the business and capital structure “comfortably” within its target range.
“This means we are now in a position to increase shareholder distributions with a share buyback of $250 million,” Calabria said.
“Going forward, we will continue to balance expected increased cash flow available for shareholder distributions with growth investments.”
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